August 2023

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 are 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, with concerns ranging from data privacy and the heightened risk exposure of digital banking resting with one institution present the case for caution.

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 Part 1 of our Cashless Economies series, we consider the risks and opportunities of transitioning onto a digital platform, drawing on current examples from around the world as well as looking at what the future may hold.


  • 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.
  • Falling market confidence in crypto following a series of market meltdowns, and a $2.2 trillion wipe-out and market value tumbling by 73% in 2022, and reduced appeal for fintech platforms, are opening the door for alternate platform innovation.
  • 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.

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CONDITIONS AND LIMITATIONS Gallagher's global operations, including a network of correspondent brokers and consultants, offers client-service capabilities in more than 130 countries around the world. This report and supporting information is not intended to provide legal or financial advice and reflects our understanding as of July 2023. It should not be regarded as a comprehensive statement of the law and/or market practice in the regions covered. You should not act upon information in this publication nor determine not to act, without first seeking specific legal and/or specialist insurance and risk management expertise. Should you require advice about your specific insurance arrangements or claim circumstances, please contact your Gallagher account representative.

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