A society without cash
Almost all developed countries are actively switching to a cashless payment system. France, Germany, Norway, Denmark - all these countries are among the ten most “non-cash” countries of the world according to data, 2018. Sweden is the most “non-cash” country in Europe: 13% of payments in this country are made using cash, although only 4 years ago the share of non-cash payments in Sweden was 59%. Denmark plans to completely abandon cash. Some countries have cash flow limits. So, in Belgium the maximum amount of cash payments for individuals for a transaction is 5,000 euros, in France -3,000 euros, in Italy and Spain -1,000 euros. One of the most common ways to stimulate non-cash payments in world practice is to return a certain amount (cashback) from the purchase of goods using bank cards, for example, in the form of discounts or as a percentage of VAT.
Improving economic transparency is an important reason for cash flow in developed and developing countries. Minimizing cash payments will help eliminate the phenomenon of “ shadow wages in envelopes” and reduce parallel trading (under the pressure of new financial technologies, this sector has become the main customer of crypto sales in recent years). Tax collection will increase, which is beneficial to the state. By the way, Sweden and Denmark have one of the highest levels of tax revenue. On the other hand, there are also negative aspects of the non-cash world: the disappearance of confidentiality, increased financial fraud in developing countries (in Russia, the volume of unauthorized transactions using payment cards in 2018 increased by 44% compared to 2017).
In Russia the share of non-cash funds in the money supply is growing every year, thereby crowding out cash. According to Sberbank, in the reporting period (2019), residents of 29 regions spent more on cashless transactions than cash itself. The leaders in this indicator are the Murmansk region, the Karelia and Komi Republics, where the share of non-cash payments amounted about 58%. Besides the share of card payments in the total amount of payment for goods and services varies from 85% (Moscow and Moscow) to 1.9% (Dagestan) and even 1.8% (Chechnya).
Nevertheless, Russia is not ready to completely refuse cash: 89% of the population regularly use cash, the rest: 58% pay with debit cards (salaries and pensions) and 15% with credit cards. The share of card transactions in total Russian spending increased in average from 9% in 2011 to 39% in 2018. At the same time, the volume of non-cash funds for goods and services in Russia, although growing, is still significantly less than the amount of cash. The share of cash in Russia’s GDP is up to 12%, while in Germany this share corresponds to 6.5%.
It is absolutely that Russia follows the vector of a cashless economy. But the population is not yet ready to completely abandon cash. This is mainly due to distrust of the banking sector and the entire state system. The experience of thirty years of history psychologically influenced the X-Y generations, and nothing can regain their trust. A modern citizen should rely only on self, since no banking structure or even the state can guarantee the safety of assets. Nevertheless, the topic of Russia’s transition to cashless payments is becoming increasingly relevant, especially because of the young users (generation Z) and the need for the state to fully control the movement of monetary funds of citizens. Personal life becomes more vulnerable. This will be another blow to the disclosure of personal information.
In this regard, new types of payment systems are actively developing. For example, in September 2017, Alipay introduced a new payment technology — a smile to pay in KFC restaurants. To pay the bill, customers simply smile at 3D camera. In Berlin, Adidas has released sneakers that also serve as a subway card. Against this background, “convenient” mobile applications for managing personal financial flows are being developed, as evidenced by the successful development of Revolut around the world. In the future, a new innovative payment system is expected to create instant electronic payment technologies, for example, using fingerprints to pay. It is also possible that banks will disappear as tangible institutional units that will be replaced by virtual platforms worldwide.