Executive summary
The transition towards a globally cashless economy continues, with the rapid pace of digitization proving to be a pervasive force of change across industry, commerce and communities as the Internet of Things (IoT) drives increased convergence between financial institutions and consumers.
While the promise of increased efficiency, convenience and simplified payments is attracting a growing audience to become digital natives, concerns about social inequality, financial crime and cybersecurity risks remain high on the agenda.
Shifting perspectives on whether the gradual implementation of central bank digital currencies (CBDCs) and centralized digital banking is ultimately a good thing remains open to question. There are still concerns, ranging from data privacy to the heightened risk exposure of digital banking resting with a single institution.
On the flip side, increased financial inclusion, a reduction in financial crime and tax avoidance, and ease of cross-border international trading are some of the potential positives associated with a transition to a fully cashless economy globally.
Is a truly cashless society achievable? In this article, we consider the risks and opportunities of transitioning to a digital platform, drawing on current examples from around the world as well as looking at what the future may hold.
Insights on cashless economy
- Social inequality and slow adoption of digital payment platforms remain challenges in the transition to cashless economies. Higher interest rates, decreasing volumes of physical currency in circulation and increasing use of open payments (Account-to-Account) may accelerate the adoption of cashless transactions as restricted capital shifts investment focus from innovation to infrastructure.
- Financial education and digital literacy will be key to building confidence in cashless payments, with sections of the banked demographic holding on to physical currency and international travelers using foreign currency preferring to transact in cash.
- Emerging markets have joined the race to develop open payments systems. As such, developed economies may end up adopting systems developed by emerging economies.
- Geopolitical tensions and the desire to control international payment markets could power the race to develop payment platforms with major powers introducing multilateral payment platforms, instant payment services and alternatives to traditional bank/card transactions.
Frequently asked questions about cashless economies
- What are the risks of a cashless economy?
A cashless economy risks excluding unbanked populations, increases dependence on technology and raises concerns about privacy, data security and potential system outages that could disrupt digital payment infrastructure. - How does a cashless economy increase cyber risk?
A cashless economy heightens cyber risks by centralizing sensitive financial data, making systems vulnerable to hacking, phishing, ransomware and fraud targeting digital payment platforms and user accounts. - What are the benefits of a cashless economy?
Benefits of a cashless society include increased transparency, reduced financial crime, improved tax compliance, greater convenience, lower transaction costs and enhanced efficiency in managing payments.
Published August 2023
Updated June 2026