The advent of cashless policy has brought a lot of ease. However, it has a lot of downsides attached to it. Listed below are some of the downsides of cashless policy
- Online Fraud; The increase in fraudulent activities over the years has raised major concern for the usage of cashless policy. Cyber threat and theft has made majority feel very unsafe carrying out transactions through cashless policy channels. Online platforms are viewed unsafe because when password or pins gets into the hands of scammers, the can withdraw all your earnings within minutes. Also, there are websites (Phishing websites) that seem like the original website of maybe a store or a bank or a restaurant, whose main aim is to either get people details or receive payments. Therefore, one has to be extra careful when transacting to ensure that you don’t fall into the hand of scammers.
- Usage problem; some of these cashless policy mediums are technical to use. The lack of proper sensitization has made it unacceptable among some of the African countries. However, some cashless policy mediums have not eradicated the problem of long queue. For example, some ATM still have long queue. This has affected the general acceptability of cashless policy mediums.
- Machine Malfunctions; Since cashless transactions occur electronically, there are complaints that some of the machines don’t work properly. For example, an ATM can display an error code, and transactions will be halted for that moment unless given technical attention. Needing cash urgently and waiting for a machine to come up can be very frustrating at times. Some of these common malfunctions include getting debited and not receiving cash and sometimes been debited twice. These errors, however, take days and sometimes weeks to get resolved.
- High transaction Charges; the cost that accompanies some of the cashless policy mediums are alarming. Some get charged daily while some monthly. This can sometimes be discouraging, especially when the charges are on the high side.
Cashless policy is an initiative introduced to help reduce the amount of physical cash in circulation, thereby encouraging the use of electronic platforms for settlements or payments for goods and services. The cashless policy seeks to curb some of the negative consequences of high usage of physical cash in the economy, including the high cost of cash, inefficiency, and corruption.
Going cashless does not only ease business transactions but also helps to authenticate and formalize the transactions. When a country is taking a step towards a cashless policy, a boost in economic growth is expected. Study has shown that the advent of cashless policy has also helped increase convenience, reduce cash-related crimes, reduce the cost of cash handling, etc.
The concept of electronic banking system began when the first automated teller machine was installed in 1970. The ATM allows deposits and withdrawal from remote locations to afford convenience. The advantages offered by ATM quickly spill over to encompass other areas of banking services, computerizing manual systems which brought about greater efficiency and time-saving.
The concept of ATM gave rise to smart cards, intranets and internet banking, electronic funds transfer, point of sales services (POS), and other electronic devices. Technological advancement has made cashless policy very relatable and part of our everyday life.
What seems as the white man tradition is starting to be the norm in most African countries. However, it has not fully been in operation due to some issues like high level of illiteracy among those that should effect the improvement or changes that are planned to be achieved by the introduction of cashless policy (Small and medium scale enterprises SME’s), inadequate infrastructures such as the provision of internet connection in commercial areas and the increase in internet fraud which has led to fear in the usage of cashless policy mediums.
Some of the advantages of cashless policy
- Saves money and time; one of the major advantages of cashless policy is that it brings about convenience. The time spent on long queues to make payment or withdraw cash is avoided. People can make payments for goods and services, settle debts, send money to their loved ones at the comfort of their homes. It eradicates the problem of counting and sorting of cash. This has been one of the greatest advantages the introduction of cashless policy has brought about.
- It is a good tool in tracking corruption and money laundering also several internet frauds. This is because majority of the transactions are automated. Therefore, tracing them and recovering is always easy in most cases.
- Reduces risk of carrying physical cash; cashless policy has eradicated the danger in carrying around physical cash. Carrying a huge amount of money around over time has made people target for robbers. However, this has been controlled by the cashless policy. You can make huge payments with a POS machine or make a direct bank transfer.
- Speed of transaction; the advent of cashless policy has made transactions easy and fast. You can make transactions worth millions in less than a minute! Transactions are now faster, and long queues are now in extinct.
- Economic growth; cashless policy and the ease it introduces in carrying out transactions has been a big advantage. Business deals are now easy and fast to execute. This has led to a boost in economic performance over the years.