Will China be the world's first cashless society? (2024)

FAQs

Is China going to a cashless society? ›

“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 shift towards a cashless society has been gaining ground for some time now. Sweden, the first European country to introduce banknotes in 1661, became the world's first cashless society on 24 March 2023. Finland and the UK are top–ranked to become cashless societies as well.

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.

Explanation: 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 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 high rate of internet usage, a supportive regulatory framework and the government's push for a cashless society – with COVID-19 as the impetus to introduce the digital yuan to replace physical bank notes – all contributed to the success of mobile payments in China.

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.

Sweden's move to a cashless society is encouraged by law and in Sweden, a merchant can legally refuse cash payments. Most Swedish banks don't handle cash transactions in-branch and ATMs are not particularly common (with only 32 per 100,000 people, which is low compared to other countries.

Westpac, ANZ, CommBank and NAB have ruled out going cashless, but the banks have shuttered branches across regional Australia, leaving some customers without the option to bank with cash.

Physical currency isn't becoming obsolete any time soon, so it's important to weigh up your options before deciding to go fully cashless in 2024. Ensuring you can accept some cashless payments though, is essential to keeping with today's trends and customer expectations.

Who suffers in a cashless society? ›

But there are potential drawbacks to a cashless society. First, it would largely exclude “unbanked” (mostly poor) persons, who do not use or cannot obtain a bank account. Second, it could invite serious breaches of privacy, because few purchases and sales would be anonymous.

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 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.

Nope. We might use less cash, but our society still has a long way to go before it's totally and completely cashless. And just because some stores didn't want to accept dollar bills for a while (and maybe still don't), that doesn't mean a cashless society is here to stay.

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.

The Drawbacks of a Cashless Society

Without cash, we would be forced to leave a record of everything we buy. While this may not bother some, there are many who worry that governments and/or corporations could use our purchasing histories as a way to track us, monitor us, and even intimidate us.

The main findings are: China's new payment system is here to stay. It will continue to grow domestically and globally, following Chinese travelers and consumers abroad. New technology makes possible the movement of the payment system away from banking and into technology and social networking.

China is primarily a cashless and cardless economy, with the vast majority of shoppers using their phones (digital wallets) to pay for items in person and online. Digital wallets WeChat Pay and Alipay are China's two most popular payment methods, accounting for more than 90 per cent of the mobile payments market.