China leads race to become world"s top cashless society, says British expert (2024)

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China leads race to become world"s top cashless society, says British expert? ›

In less than 20 years, China has, with impressive speed, closed the gap with Britain in terms of a cashless society, Matthews noted. This has shown how fast the technology of cash-free transactions and payment has moved in China and how quickly the Chinese society has accepted it, he said.

“Elderly Chinese still often prefer to pay with cash and some struggle with using mobile payments.” Less than a year ago, state media was lauding China's trajectory towards becoming the world's top country for cashless transactions. Xinhua reported cash had dropped to just 3.7% of the total money in circulation.

The country that is likely to be the first nation in the modern world to go cashless is Sweden. Sweden has been at the forefront of the digital payment revolution and has made significant progress in reducing cash usage.

The US is moving toward cashless payments, with a substantial increase in the use of mobile wallet apps and contactless cards. A report from the Federal Reserve Bank of San Francisco found that payments made using cash accounted for just 18% of all US payments in 2022.

Finland and the UK are top–ranked to become cashless societies as well. Poland, on the other hand, has scrapped plans to limit cash payments to ensure freedom of choice. In the Asia–Pacific region, Australia, China, Hong Kong, India, Japan, Korea and Singapore are identified as frontrunners in digital payments.

Norways is the most cashless country, with only around 2% of payments being made by cash, and 100% of the population having a bank account.

The correct answer is Sweden. Sweden is World's first country to have a cashless economy. In 2023, Sweden is proudly becoming the first cashless nation in the world, with an economy that goes 100 percent digital.

The downsides of going cashless include less privacy, greater exposure to hacking, technological dependency, magnifying economic inequality, and more. Credit and debit cards, electronic payment apps, mobile payment services, and virtual currencies in use today could pave the way to a fully cashless society.

Britain is moving in a decidedly cashless direction. In the decade between 2012 and 2022, cash payments fell from 54 per cent to 14 per cent according to UK Finance.

Cashless society: advantages

One major advantage of going cashless is a significant reduction in crime. When people are handling less cash, bank robberies, burglaries and corruption drop.

Why shouldn t the US go cashless? ›

Decreased Monetary Security

When you have cash in hand, you know it's safe from everything except direct robbery or physical destruction. But when your money is in digital form, it's vulnerable to hackers and system malfunctions.

More than half of all bank branches no longer handle cash. Seven out of ten consumers say they can manage without cash, while half of all merchants expect to stop accepting cash by 2025 (Arvidsson, Hedman, and Segendorf 2018).

The elderly members of society are at particular risk, as they are often not confident using digital payment methods or online banking services.

All of the Big Four banks - Commonwealth Bank, Westpac, ANZ and NAB - have ruled out going cashless.

When Will Society Become Cashless? While it's impossible to accurately predict when the US will move to a fully cashless society, a Gallup survey reveals that 64% of Americans believe that all payments will become electronic at some point in their lifetime, with the figure jumping to 70% for those under 50.

As of June 2023, about 943 million people in mainland China used mobile payments, bolstering the country's status as the world's largest cashless society. Under the new guidelines published by Chinese authorities, domestic establishments must also expedite the use of cash and currency exchanges.

Traditional Payment Methods

While digital payments are the norm in China, traditional methods like cash and cards are still accepted. However, cash is quickly becoming a thing of the past, and foreign cards often come with high inter-bank and overseas fees.

China is moving toward a cashless society

According to the article's forecast, around 60 percent of China's 1.3 billion population will have made a purchase via mobile payment by 2023. As the trend continues, China may soon become a cashless economy, where digital payment methods totally replace cash.

China's two dominant mobile payment services providers, Alipay owner Ant Group and WeChat Pay operator Tencent Holdings, are enhancing operations to make it easier for foreign travellers to pay for goods and services on the mainland, the world's largest cashless society.

Is the cashless society really coming? Despite the rapid development of convenient, seamless digital payment methods, the 100 per cent cashless society remains a distant prospect. Cash is a trusted, reliable and essentially secure way to spend, and still adds up when it comes to straightforward everyday budgeting.