4 myths about the danger of non-cash payment and their debunking

In recent years, the world has been rapidly moving toward getting rid of cash. All developed countries support the transition to cashless-world and popularize it among their citizens. Ukraine is no exception: in addition to the implemented regulator’s strategy, we can admit how the audience’s habits have changed over the past 3–4 years: a card and a telephone have become the basic method of paying for goods and services for many people. The transition to cashless payments was further accelerated by the coronavirus: the fear to use cash brings about the growth of card payments. Nevertheless, some people are still concerned with certain threats and lack trust. I have listed the four most common myths about cashless payments.

1. The state will receive another tool for tracking my every move

Many people perceive the propaganda of the transition to a cashless payment system as a state plan to wean away citizens from anonymous offline payments and gain control over the information “who, where, when and what for”. Sometimes the policy of some states regarding the implementation of cashless-tools seems compulsory. But it is not based on the attempt to get citizens personal data, but on the simple implementation of the plan.

The implementation of strategies for cashless payments popularization includes many positive changes. We will discuss at least three

improving security, overcoming the underground economy, and usability.

Touching upon the topic of security, I can’t fail to use Sweden as an example. In the country, less than 20% of stores accept cash, and 98–99% of all payments are cashless. As a result, the crime rate has significantly decreased. The country has almost forgotten what are the robberies of shops, bank branches or public transport drivers. As relevant as ever.

Decreasing the share of the underground sector in GDP is a complex and lengthy process. It consists of many processes including the amount of cash circulation. Cash outside the banking system charges the functioning of the underground economy. So far, the regulator is already pursuing a policy aimed at the cash turnover reduction. So, for example, the measures dedicated to the reduction of the allowed amount of cash payment were taken.

What about convenience. It’s not even worth discussing for a long time, everything is clear. We can instantaneously pay both at the checkout and in the online store with a phone, card or e-wallet. As I have already mentioned, contactless payments became especially relevant and necessary during the Covid

19 pandemic, and this habit is unlikely to disappear after quarantine.

2. Funds in my account are under the threat of credit fraud and theft

No one is safe from a theft. But it is worth noting that people with cash are an easier and more attractive profit object for criminals. It is often impossible to find robbers and return funds. As for the cards, at least two factors protect our funds

authentication and the bank antifraud system. In addition, you can block the account at any time. With bank applications it can be done in a matter of minutes.

Currently financial institutions carry out complex manipulations daily and spend huge budgets to combat credit fraud and cyber attacks..

3. Banks will take control of my finances

Yes, banks gain access to customer information. But here is a surprise

they always have it. Such a system is aimed not at controlling and monitoring citizens, but at detecting illegal operations and establishing a healthy economy in the country. In addition, there are legal instruments that regulate legal relations in the field of banking secrecy.

4. I spend more with a card, as I don’t pay with “real” money

Perhaps in the early years of active cards use, many people experienced such a problem. However, the functionality offered by banks and the variety of functions in their applications are so expanded nowadays that they, on the contrary, can help you to amass and save money. Cashbacks help to “beat off” the part of expenses, advanced analytics of expenses by categories allows to understand where the biggest amount of money is spent on and what you can refuse of if necessary. And even the traditional notifications that come after a payment will repeatedly remind you of the amount spent.

The non-cash payment method has many positive aspects. However, despite its popularity, so far no state in the world has completely refused to use cash, because non-cash payments still have their own risks, and some people don’t want to forget about usual cash.

CEO of the international payment system LEO, the shareholder of IBOX Bank