Benefits of Cashless Economy: 7 Things You Need To Know
All things being equal, there are several benefits or advantages associated with operation or adoption of cashless economy as means of transactions.
These are things you need to know as regards to benefits of Cashless economy or society:
-Effective in Financial Risk Management:
it reduces the risks in businesses.
Making payments electronically(without cash) eliminate the possibility of accepting counterfeited money.
Also, business establishments are not exposed to theft, burglary or robbery of cash.
The costs of processing and securing cash will be reduced as the number of cashless payments increase.
Consider a situation where you ordered some goods from Lagos, Nigeria(while in another state) or from China(while in another country), and make payments digitally or electronically.
Obviously, that must have saved you stress and transportation fare of traveling to buy those goods with physical cash.
Transactions time can be reduced through electronic money transfers.
Just imagine selling a #5m plot of land to somebody and being paid with cash, and you are meant to count the money for confirmation.
How long do you think it will take you to finish counting the money or cash?
Days I think? Lool
That's ugly mehn!
That is, it makes transactions more simple and clean.
According to a report, study conducted by the Restaurant chain Sweetgreen, a cashless transaction can be completed on average 15% faster than a cash transaction.
It reduces problem associated with distance in a business transactions through mobile or electronic money transfers.
Like the above example I gave, somebody in Nigeria can buy things in USA without traveling to the country, by ordering the goods and transfering money for the goods electronically.
Funding illegal activities, conducting illegal transactions, tax frauds as well as money laundering are more difficult to execute in a cashless economy.
Elimination of high-denomination bills has been linked to reduction in criminal activities around the world.
For instance, government crime fighters such as FBI(in USA), EFCC(in Nigeria), etc easily dictate financial crimes committed when money are being transferred electronically.
If I give you cash inside my house and we conceal it, there is no how anybody would know.
But once it is done electronically, it can be easily traced by these crime fighters.
Criminals are forced to carry larger amounts of cash, making it harder to transport and easier to detect.
In addition, large bills are the most counterfeited bills due to its value.
According to report, "following this belief, in 1969 the federal government of the United States decided that the highest banknote that would continue to be printed was the $100".
"Although, higher valued notes would remained in circulation, any of these notes that reached the government hands would be eliminated".
"In the effort to reduce criminal activities, many countries in different parts of the world have adopted similar laws".
Also, business establishments are not exposed to theft, burglary or robbery of cash.
-Effective in Business Cost Reduction:
Electronic transactions with the use of credit cards, debit cards or monetary transfers tend to reduce cost of business.The costs of processing and securing cash will be reduced as the number of cashless payments increase.
Consider a situation where you ordered some goods from Lagos, Nigeria(while in another state) or from China(while in another country), and make payments digitally or electronically.
Obviously, that must have saved you stress and transportation fare of traveling to buy those goods with physical cash.
-Effective in Transaction Time Reduction:
Transactions time can be reduced through electronic money transfers.
Just imagine selling a #5m plot of land to somebody and being paid with cash, and you are meant to count the money for confirmation.
How long do you think it will take you to finish counting the money or cash?
Days I think? Lool
That's ugly mehn!
That is, it makes transactions more simple and clean.
According to a report, study conducted by the Restaurant chain Sweetgreen, a cashless transaction can be completed on average 15% faster than a cash transaction.
-Enhances or Promotes Proximity in Business:
It reduces problem associated with distance in a business transactions through mobile or electronic money transfers.
Like the above example I gave, somebody in Nigeria can buy things in USA without traveling to the country, by ordering the goods and transfering money for the goods electronically.
-Effective in Fighting Financial Crime:
Reduction in criminal activities by the elimination of high-denomination bills.Funding illegal activities, conducting illegal transactions, tax frauds as well as money laundering are more difficult to execute in a cashless economy.
Elimination of high-denomination bills has been linked to reduction in criminal activities around the world.
For instance, government crime fighters such as FBI(in USA), EFCC(in Nigeria), etc easily dictate financial crimes committed when money are being transferred electronically.
If I give you cash inside my house and we conceal it, there is no how anybody would know.
But once it is done electronically, it can be easily traced by these crime fighters.
Criminals are forced to carry larger amounts of cash, making it harder to transport and easier to detect.
In addition, large bills are the most counterfeited bills due to its value.
According to report, "following this belief, in 1969 the federal government of the United States decided that the highest banknote that would continue to be printed was the $100".
"Although, higher valued notes would remained in circulation, any of these notes that reached the government hands would be eliminated".
"In the effort to reduce criminal activities, many countries in different parts of the world have adopted similar laws".
-Effective in microeconomic Budget Planning:
A cashless society contributes to simpler consumer budgeting. All transactions completed in the form of digital payments are saved in records, and they are easily accessible to any customer. This information can be used to assist anyone in readjust his or her budget in a more efficient way.-Effective or very Useful in Transaction Clearity:
Ceteris paribus, using digital or electronic means for payments tend to eliminate or at least reduce doubts in business transactionsForinstance, there maybe doubts on the actual amount paid in or, whether or not payment is made at all,
The parties involved can always seek the help of their financial institutions(banks) for clarification through Bank Statement of Account.
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