Is it really good to be a cashless society?

Muzaffar-Syah-Mallow-cashless-student-debit-1By Dr Muzaffar Syah Mallow

Recently, our education minister proposed a plan to implement a debit card system for our students in school. This means our school students in the distant future will no longer need to carry cash in their pockets. Instead, they will be prepared at an early age to become part of the government’s long-term plan of making our society a cashless society.

However, an important question needs to be asked: Is it really good to be a cashless society?

Of course, it’s fun to imagine a world without cash. Liberated from the burden of physical currency, we could make purchases from the convenience of a mobile device or simply by using credit or debit cards.

A few countries in the world have started adopting this new way of life, mostly European countries. In our country, some of our daily financial transactions are also beginning to conform to the new way of doing business, similar to a cashless society, such as the use of credit cards, e-banking, online payments and others.

However, in moving towards being a cashless society, we need to be cautious as such transactions have flaws as well.

Many people might think that using conventional cash attracts criminals. However, we should remember that electronic transactions could also expose the user to the activities of criminals – such as identity fraud, data theft, scamming, spoofing and others.

We have been exposed to many stories on these issues, and the authorities, including the banks and financial institutions, have repeatedly reminded consumers of the need to be extra cautious when dealing with cashless transactions.

It is also crucial for us to note that becoming a cashless society runs the potential risk of increasing individual expenditure and putting the individual in debt, as the use of cashless methods for daily financial transactions will require high discipline and self-control.

As such, there is a concern that individuals will be unable to control their spending habits once their daily financial transactions are made easy for them.

All the issues mentioned above need to be considered deeply by the relevant parties in our country before they start to implement any policies on becoming a cashless society.

Dr Muzaffar Syah Mallow is a senior lecturer at the Faculty of Syariah and Law, Universiti Sains Islam Malaysia.

The views expressed are those of the author and do not necessarily reflect those of FMT.