Moving towards a cashless society Essay

In history there was no capital moreover people utilize to evaluate commodities in monetary terms. People determination to strike trade of goods for goods that could be estimated to study same monetary rate as waved. The person who wanted to buy some commodity could make estimates of the commodity the seller has and comp are its value in terms of purity to the commodity of exchange. Money was later invented as a tangible clay that includes paper and coin. Transactions were all handled in monetary value and opposite currencies were overly put in appear for different nations. Different place were similarly set up to be open trade expeditiously on different currencies.Cash became the day to day ways of trade were one had to have paper money so that they could be able to acquire whatever they want. Banks were developed for easier and safe storage so that no one could get hold of in illegally. Cash or money has the following advantages like that the mode of remuneration i s easier and simple because no so much transactions are made. Counterfeit money is also casual to detect and remainsic risks are hardly a problem. There is no paper trail and is a peer to peer mode of compensation. It also introduced lots of problem like theft and counterfeiting of paper silver.This led to the basal of moneyless society by introduction of cheques where people no longer take on cash but writes cheques that authorizes withdrawals and payments in terms of cash. (Thorndal, 1994) Traditionally deposits have been used for payments at a duration. Deposits can be transferred in a calculate of ways payer initiated transfer, direct debit, standing order, check, credit carte du jour. With remoteness to distance payments or mode of trade the demand for are more troubled and effective ways of communication and trade came into place. The introduction of ATM note was introduced by the banks to enhance trade.People no longer had to carry cash but could make withdrawals through these ride game. The electronic cash system came into place where people can buy things over the internet using tease as a form of electronic commerce. This electronic cash system involves use of card game that have been categorized as credit cards, electronic cash and smart cards. The credit cards involve creating an encrypted channel for use of cards for internet like VISA or MasterCard. Electronic cash uses specially designed software where customer buys electronic cash for digital wallet then sends as payment to merchandiser.Examples are DigiCash and CyberCash. Smart cards include contact less and swap cards like MasterCard, Visa, Quicklink, VisaCash, Protonn and Danmont. The return of payment cards reflects their attractiveness to consumers over other forms of payment and credit. earnings cards offer consumers numerous benefits, including better management of ones expenses, improved recordkee free fallg, greater shopping convenience, reduction of the risk of theft , float for those who do not revolve balances, rewards from use of cards that are available for extra purchases, and, especially for debit cards, convenience in obtaining cash.I first controvert these benefits and then consider the benefits of payment cards when used to obtain credit. (Wallace, 1983) salary cards deliver consumers to manage their money better by reservation it possible to anticipate, plan, and match their obligations to their available funds. The payment cards allow consumers to liquid out unexpected expenditures such as car repairs or family emergencies . retribution cards also reduce the costs of record keeping and retaining separate receipts.Checks also offer this advantage but payment cards do not require the additional inconvenience of recording in and then rebalance a checkbook. remuneration cards can also reduce the clip and transaction costs associated with shopping. Advances in technology have dramatically change magnitude the speed of processing card transactions which are now comfortably faster than writing checks. If the ATM is outside of the consumers network the consumer must(prenominal) pay a requital to withdraw the money. In contrast transactional users of payment cards pay nothing to use their card.Transaction errors, such as receiving too little or too much change, are also probably higher with cash than with electronic payment card transactions. other advantage of payment cards is that payment cards can be used in a wide variety of outlets hence component part both consumers and merchants. (Krueger, 1999) Some Debit cards, PIN or online cards allow consumers to withdraw additional cash beyond the price of the purchase for which the card is used thus saving the use of ATM. Unsecured personal pay loans are expensive with much higher initiation fees than credit cards. character cards are attractive for consumers for both cost and convenience. General goal credit cards have also substantially displaced retail inject credit. We have also so umteen disadvantage of using payment cards. One of this disadvantage in that they are risky for customers because they cay be baffle fraud easily. People can use your card and pin number once known to withdraw or use your money. reference book cards are also expensive to acquire because they are costly. Payment cards are only acceptable by registered merchants and hence are not applicable everywhere.Card users also incur high set up fee and cost while transacting using this payment cards. (Prinz, 1999) Specific regulations extremity to make a cashless society of cards work smoothly. Regulation in the payment card need to be set due to the accept of interchange fees are too high and as a issuance reduces consumers to overuse payment card. Interchange fees arose from the structure of the Visa and MasterCard networks. Visa espouse a fixed interchange fee which was not linked to the merchant discount charged by individual acquirers.A uniform fee r educed the transaction costs of negotiating separate interchange fees between acquirers and issuers and eliminated the difficulties that issuers face up in monitoring in the merchant discount set by the acquirers. Visa and MasterCard reduced the interchange fees charged to supermarkets hence reducing the merchant discount. Some regulations were also imposed on regulating card frauds that many banks face. Fraud card detectors have been setup and laws governing the enactment of the card fraud have been set to punish those fraudsters.The winners of the cashless society are the consumers or users of the cards because they have been absorbed from the risk of physical theft of money. rase though there are fraudsters, the users are not exposed to so much risk of theft. Card users can effectively purchase things online disregarding of the distance because all transactions are done to the and at a very high speed. The losers are the merchants or company providing this services because the have to incur all the expenses of setting up this technology and infrastructure.Lastly they incur the problem of making all transactions possible regardless the distance and parties involved. The merchants incur all this cost and expenses in this cashless society. (Buiter, 2005)ReferenceBuiter, W (2005) hot developments in monetary economics economic journal, Vol. 115 Thorndal, J. (1994) Prepaid cards and monetary Review Danmarks Publishers Krueger, M. (1999) Towards a Moneyless world Dept of Economics and pay University of Durham Press Prinz, A (1999) Money in the real and realistic World Netnomics journal. Wallace, N (1983) A suggestion for oversimplifying the theory of money Economic journal