A Millennial Viewpoint: Is The World Ready To Become A Cashless Society?

Andre Pfohlmann

There is a lot of talk about the world becoming a cashless society.

For instance, the editorial board from Bloomberg View posted an article supporting this theory, saying that cash had a pretty good run for 4,000 plus years, but now “notes and coins increasingly seem déclassé. They’re dirty and dangerous, unwieldy and expensive, antiquated, and so very analog.”

As a millennial, I’m intrigued with the idea that my generation is perpetuating the cashless society movement. There is research suggesting that 25% of millennials carry less than $5 in cash with them. Supposedly, more than a third of my generation envision a society where no physical currency is used in any transactions.

But I have to ask – what about the other 75%? Do they rely more on cash? And what about the other two-thirds – can they see themselves in a society that is totally cashless?

Perhaps not all millennials are ready…

As a millennial that is on the upper side of the generation’s age bracket, I can’t yet imagine a cashless world. It’s hard for me to envision that I would pay for everything, whether it’s an expensive dinner at a restaurant or simply a nice bouquet of flowers for my wife, with only an app. Not only do I see few businesses offering options like e-wallets or mobile payments, but I have security concerns with these approaches. I believe they are still prone to hacking.

The reality is that I still prefer to use cash. Paying with cash helps me make cautious and more thoughtful purchases, as what I can afford is evident by what’s in my wallet.

Do I carry less cash than before? Yes, I do, and I have banked almost exclusively for over 10 years. Because of this, banking for me has become less personalized. I go to an ATM for cash, and I have several banking apps. If I need services or help, I use online chat or send an email.

However, there are still many of my peers, especially here in Germany, that would prefer to go into a bank and have a personal interaction. My wife is one; she does no online banking at all, which makes me question if a cashless society with less personalized banking services could truly evolve in the near future.

A new vision: less cash versus cashless?

Perhaps a better approach would be a less-cash society, as Kenneth S. Rogoff, a former chief economist at the International Monetary Fund, suggests. He believes that getting rid of big bills could potentially help reduce crime and tax evasion and even help countries rebound from financial collapse. His theories, which are outlined in his book The Curse of Cash, are certainly interesting and give us plenty to think about.

This kind of approach would also serve people in other generations, like my grandmother, who would be greatly challenged by living in a cashless society. She prefers personal banking at a retail location, but the one in our village just closed and left an ATM in its place. She’s never used one, and has no plans to start using one now. So to do her banking, she needs to get on a bus and go into town. I can’t imagine what she would do in a totally cashless society.

The world is shifting…

While I believe Germany is a bit conservative when it comes to moving towards a 100% cashless society, there are other countries in Europe and around the world that are not. Sweden is certainly at the forefront in this movement, and it may be one of the first countries in the world to become a cashless society. On the Sweden.de website, a headline says, “Cash is no longer king in Sweden.” Swedes now pay for 80% of all transactions digitally, with options such as a new mobile payment app called Swish, which claims more than half of the country as users. Sweden’s website says that, besides simplicity and lower costs, digital payments add transparency to the country’s payment system, with several banks already 100% digitized and not accepting any cash.

India is also on the path to becoming a cashless society. Indian Prime Minister Narendra Modi is asking his country to take advantage of digital payment channels in light of a recent government ban on high-value rupee notes. The country initiated the ban in November 2016 in an effort to crack down on corruption, unaccounted wealth, and counterfeit notes. Unlike Sweden, however, the country still has a 90% usage of cash for consumer purchases, so its hope of becoming a less-cash society remains premature.

Where are we headed? 

From my perspective as a digitally driven millennial consumer, I believe that it is possible to one day become a less-cash, or even cashless, society. However, I don’t believe it will happen tomorrow, especially in countries like mine that are taking a more wait-and-see approach.

Security, more universal standards, and merchant adoption are just a few of the things that I see standing in the way of this movement. And until those are all sorted out, I will be quite content with the convenience of my online banking and mobile app options. And who knows, maybe my grandmother will let me teach her how to use an ATM.

For more on how banks are embracing digitalization, read Not Your Grandfather’s Bank: How Banks Can Enter The Digital World.


Andre Pfohlmann

About Andre Pfohlmann

André Pfohlmann is an associate for the Banking Industry Business Unit at SAP. He is responsible for the unit's social media strategies and training.