The Advantage Of Cashless Transaction: Exploring The Benefits For

Individuals,Businesses And society

As of now, as technology continues to evolve and shape the way person live, the benefits of
going cashless are becoming increasingly apparent. This position aims to explore the
multitude of benefits that cashless transactions bring to individuals and society as a whole.

The ease that cashless transactions provide is one of its main advantages. Among the most
obvious advantages of cashless payments are convenience and simplicity of usage. Customers
may now make purchases without worrying about carrying a large wallet or not having
enough cash or change because of mobile wallets and EMV chip cards. (Demen, 2023)
People may conduct purchases easily and avoid the inconveniences of handling real currency
by utilizing digital payment methods like credit cards, mobile wallets, or internet banking.

Effective budgeting and financial planning are made possible by cashless transactions.
Customers can simply keep track of their spending, retrieve comprehensive transaction
histories, and learn more about their spending patterns using digital payment solutions. This
gives people the capacity to plan realistic budgets, make educated financial decisions, and
strive toward their long-term financial objectives. With a comprehensive picture of their
spending, customers are better able to make decisions and manage their money. (Top, 2023)

The security of cash has always been a concern, especially in instances of theft or loss.
Carrying cash does not offer the same level of security as cashless transactions. There is a far
lower chance of loss, theft, or fake money when touching cash. Customers may rest easy
knowing that sophisticated fraud detection techniques and secured channels are protecting
their transactions. Furthermore, a lot of digital payment methods let users watch and monitor
transactions, so they may quickly see any questionable activity. (Top, 2023)

Businesses gain from cashless payments because they eliminate the necessity for handling
currency by hand and lower the possibility of human mistake. As a result, companies may run
more effectively and devote resources to other functional areas. Furthermore, companies may
more successfully customize their marketing and sales efforts because to the useful data and
insights that digital payment systems offer about consumer purchasing patterns. (The Reasons
Why Restaurants Are Going Cashless, 2023)

Handling physical cash comes with numerous costs, including printing, transportation, and
storage fees. By transitioning to cashless transactions, these expenses can be significantly
reduced or even eliminated. Additionally, individuals can save money by avoiding ATM
withdrawal fees and reducing the risk of lost or stolen cash. Companies that adopt a cashless
system save the expenses and charges related to managing currency. For instance, banks may
charge fees for coin counting and deposit acceptance. Companies with large budgets
frequently have to pay for armored automobile services. . (The Reasons Why Restaurants Are
Going Cashless, 2023)

Cashless transactions have the potential to promote financial inclusion by providing access to
formal financial services for the unbanked or underbanked populations. Digital payment
systems help close the gap between the rich and the poor by enabling people to engage in the
formal economy, obtain loans, and create bank accounts from a distance. In India, digital
lending has also grown recently. Fintech businesses use algorithms and data analytics to
assess a borrower's creditworthiness and provide loans faster and at a lower cost than
traditional banks. These innovative platforms have helped close the gap between the formal
financial system and marginalized populations, such those with low or no income, by
enabling speedy access to financial services. (How Cashless Societies Can Boost Financial
Inclusion With the Right Safeguards | Blog | University of Essex, 2023)

In light of the ongoing COVID-19 pandemic, cashless transactions have gained even more
importance. Cashless payment is becoming more popular as a result of the coronavirus
epidemic since it is seen to be the safest and purest type of virus-free payment method. Users
are learning, working, and shopping from home with digital tools to lower the risk of
contracting or transmitting COVID-19. A.(2021)

Printing physical money contributes to deforestation, as banknotes are made from paper. The
advantages of utilizing cashless payments over cash: each cash transaction has an
environmental impact of 4.6 grams of CO2, whereas a cashless transaction has an equivalent
environmental impact of 3.8 grams of CO2. (Ignazzito, 2023)

Cash transactions have long been associated with corruption due to the difficulty in tracking
and tracing the flow of money. Cashless transactions, with their digital records, provide a
means to combat corruption and promote transparency in financial transactions, bolstering
efforts to eradicate corrupt practices. The amount of corruption will eventually decrease as
each transaction is tracked. (Uddin, 2023)

Cashless transactions are at the heart of the digital revolution. By embracing new payment
technologies, individuals and businesses encourage innovation and the development of
improved digital payment systems, leading to a more advanced and efficient financial
landscape. The government is taking the lead in promoting cashless transactions by using
innovative payment solutions that make online payments simple and safe. (Younus et al.,
2023)

The adoption of cashless transactions can significantly contribute to economic growth. As

more transactions move digitally, the ease and speed of conducting business increase. This, in
turn, stimulates economic activity, promotes consumer spending, and encourages
entrepreneurship. Cashless payments can help supervisors, central banks, and commercial
banks do better jobs.

Cashless transaction contribute to financial literacy of an individual. As individuals engage in

cashless transactions, they are exposed to various financial tools and technologies, promoting
financial literacy. By interacting with digital payments, individuals become more accustomed
to budgeting, tracking expenses, and understanding complex financial concepts, empowering
them to make better financial decisions.
Cashless transactions have been instrumental in the growth of e-commerce, allowing
businesses to expand their customer reach beyond geographic boundaries. Digital payment
methods provide several advantages for both consumers and business owners. (Casless
Transaction E Commerce - Google Search, 2024)With digital payments, individuals can
purchase goods and services from anywhere in the world, fostering global connectivity and
economic cooperation.

Governments can benefit greatly from cashless transactions. Digitizing public services and
welfare payments reduces administrative burdens, enhances efficiency, and minimizes
leakage and corruption. Governments can also gain valuable insights into spending patterns,
enabling them to make data-driven policy decisions.

As technology continues to advance, the advantages of cashless transactions become

increasingly evident. Convenience, safety, efficiency, financial inclusion, and numerous other
benefits push society towards a cashless future. Embracing cashless transactions will
undoubtedly help individuals, businesses, and governments thrive in an increasingly digital
world.

Damen. (2023, January 31). Cashless Payments: Pros, Cons, How to Accept Them, & 8
Types. MONEI. Retrieved January 20, 2024, from https://monei.com/blog/cashless-
payments/#:~:text=Convenience%20and%20ease%20of%20use,change%20to%20complete
%20a%20purchase.

Top, R. (2023, June 8). The Benefits of Cashless Payments for Consumers and Businesses.
https://www.linkedin.com/pulse/benefits-cashless-payments-consumers-businesses-rubik-top

The Reasons Why Restaurants Are Going Cashless. (2023, December 14). Lavu -.
https://lavu.com/why-restaurants-are-going-cashless/

A. (2021, March 29). Covid-19 Accelerating the Shift to Hygienic Payment. AlipayHK.
https://www.alipayhk.com/en/merchant/whatnews/covid-19-accelerating-the-shift-to-
hygienic-payment/

Uddin, M. J. (2023, July 30). Cashless Society Boosting Economic Growth & Diminishing
Corruption. https://www.linkedin.com/pulse/cashless-society-boosting-economic-growth-
diminishing-mohammad-jasim

Younus, M., Nurmandi, A., Suardi, W., & Gul, H. (2023, October 2). Government Initiative
to Promote Cashless Transaction through Innovative Payment Solutions to provide ease and
Safety to Pay Online. Formosa Journal of Applied Sciences.
https://doi.org/10.55927/fjas.v2i9.4897
 Position Paper In
English For Academic
And Professional
Purposes

Submitted By: Jay-Ar M. Ladiero

Grade 12 ABM Cruz