A cashless society tends to negatively affect the economically disadvantaged by increasing financial exclusion and widening inequality. Vulnerable groups such as the unbanked, underbanked, elderly, those in rural areas, and low-income individuals often lack access to the necessary digital technology, banking services, and internet connectivity to fully participate in cashless transactions. Because cashless systems usually require a bank account and digital devices like smartphones, these populations face barriers to accessing goods and services if cash is eliminated. This can lead to social exclusion and further marginalization of already disadvantaged groups. Key impacts include:
- Financial exclusion : Many low-income or marginalized individuals do not have bank accounts or digital payment means, blocking them from transactions in a cashless economy.
- Digital divide : Lack of digital literacy, technology, and internet access disproportionately affects vulnerable groups.
- Increased inequality : Cashless systems can exacerbate wealth gaps as those without digital access are left out of economic participation.
- Loss of anonymity and privacy : Cash offers anonymity; its removal raises privacy concerns, especially for vulnerable populations.
- Risk of overspending : Cashless payments may lead to less budget control as physical cash is not used.
- Dependence on technology : System failures or cyber threats could disproportionately harm disadvantaged users who rely on digital payments without strong protections.
Despite potential benefits of digital payments, inclusive policies that keep cash options available are essential to avoid excluding the disadvantaged financially and socially.