Moving towards a cashless society Essay Example for Free

Moving towards a capit entirelyess society EssayIn history there was no m acey plainly people used to evaluate commodities in monetary terms. People used to shake dole prohibited of goods for goods that could be estimated to collect same monetary value as waved. The person who wanted to procure some commodity could make estimates of the commodity the seller has and comp be its value in terms of righteousness to the commodity of exchange. Money was later invented as a tangible form that includes paper and coin. Transactions were tout ensemble hand take in monetary value and diverse currencies were likewise put in place for different nations. contrasting rates were as well as preparation up to be able trade efficiently on different currencies.Cash became the day to day ways of trading 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 payment is easier and simple because no so much transactions are made. Counterfeit money is also easily to detect and systemic risks are hardly a problem. There is no paper trail and is a peer to peer mode of payment. It also introduced lots of problem like theft and counterfeiting of paper cash.This led to the revolutionary of cashless society by introduction of cheques where people no longer carry cash but writes cheques that authorizes withdrawals and payments in terms of cash. (Thorndal, 1994) Traditionally deposits have been used for payments at a distance. Deposits can be transferred in a number of ways payer initiated transfer, direct debit, standing order, check, credit card. With distance to distance payments or mode of trade the demand for are more fast and effective ways of communication and trade came into place. The introduction of ATM card was introduced by the banks to enhance trade.People no longe r had to carry cash but could make withdrawals through these separate. The electronic cash system came into place where people can bargain things over the internet using cards as a form of electronic commerce. This electronic cash system involves use of cards that have been categorized as credit cards, electronic cash and offend 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 handbag then sends as payment to merchant.Examples are DigiCash and CyberCash. Smart cards include contact less and shift cards like MasterCard, Visa, Quicklink, VisaCash, Protonn and Danmont. The growth of payment cards reflects their attractiveness to consumers over other forms of payment and credit. compensation cards offer consumers numerous benefits, including split up management of ones expenses, improved recordkee pivot mang, greater obtain convenience, reduction of the risk of theft, float for those who do not revolve balances, rewards from use of cards that are ready(prenominal) for additional buys, and, especially for debit cards, convenience in obtaining cash.I first discuss these benefits and then canvass the benefits of payment cards when used to obtain credit. (Wallace, 1983) Payment cards allow consumers to manage their money better by making it possible to anticipate, plan, and match their obligations to their available funds. The payment cards allow consumers to smooth out unexpected expenditures such as car repairs or family emergencies . Payment cards also reduce the be of record keeping and retaining individual receipts.Checks also offer this advantage but payment cards do not require the additional inconvenience of recording in and then rebalance a checkbook. Payment cards can also reduce the time and transaction prices associated with shopping. Advances in technology have dramatically incre ased the speed of processing card transactions which are now substantially faster than piece of writing checks. If the ATM is outside of the consumers net call on the consumer must pay a fee to withdraw the money. In contrast transactional users of payment cards pay nothing to use their card.Transaction errors, such as receiving similarly little or too much change, are also probably higher with cash than with electronic payment card transactions. Another advantage of payment cards is that payment cards can be used in a wide variety of outlets thus helping both consumers and merchants. (Krueger, 1999) Some calculate 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 finance loans are high-priced with much higher initiation fees than credit cards.Credit cards are attractive for consumers for both salute and convenience. General purpose credit cards have also substantially displaced retail store credit. We have also so many disadvantage of using payment cards. One of this disadvantage in that they are risky for customers because they cay be incur fraud easily. People can use your card and pin number once known to withdraw or use your money. Credit 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 alter fee and cost while transacting using this payment cards. (Prinz, 1999) Specific regulations need to make a cashless society of cards work smoothly. Regulation in the payment card need to be set due to the claim of interchange fees are too high and as a result reduces consumers to overuse payment card. Interchange fees arose from the mental synthesis of the Visa and MasterCard networks. Visa adopted a fixed interchange fee which was not linked to the merchant discount charged by individual acquirers. A uniform fee reduced the transaction be of negotiating separate interchange fees between acquirers and issuers and eliminated the difficulties that issuers faced 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 governance 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. Even though there are fraudsters, the users are not exposed to so much risk of theft. Card users can effectively purchase things online disregardless 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. at long last 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) New developments in monetary economics Economic journal, Vol. cxv Thorndal, J. (1994) Prepaid cards and monetary Review Danmarks Publishers Krueger, M. (1999) Towards a Moneyless world Dept of Economics and finance University of shorthorn Press Prinz, A (1999) Money in the real and Virtual World Netnomics journal. Wallace, N (1983) A intimation for oversimplifying the theory of money Economic journal