Name: Nguyen Ngoc Phuong trang

Class: 17G1BM02 _ 179011035

MONEY AND BANKING

ARE WE HEADED FOR A CASHLESS SOCIETY?

Non-cash payment is a growing payment method in the world and it was predicted that a
cashless society has been around for decades. However, according to reports in many
countries in recent years, it has not come to fruition whole the world because of the
difference between the economic development of the countries. At the countries have a
developed economy such as America, Korea, non-cash payment is very popular and accounts
for more than 70% of each country’s transactions. In a survey in Los Angeles (America), it
was reported that 78% of citizens carry less than $50, 50% of them carry less than $20 and
9% of them don’t carry cash. Similarly at Seoul (Korea), according to the Bank of Korea, only
20% of transactions are made in cash, and most young people have switched to mobile or T-
Money. While at the countries have a developing economy as Vietnam, non-cash payment is
not really popular and growing, it only accounts for more than 20% of each country’s
transaction. Over the past eight years, Vietnam has reduced its cash-only ratio by 2% and in
fact, from 2010 up to now, the proportion of cash flow on the total means of payment has
not changed significantly. Especially in many countries have an undeveloped economy as
many countries in Africa, non-cash payment is almost unknown. The evidence is that nearly
326 million people represent 80% of the population in Africa have not a bank account.

Why is non-cash payment unpopular in many countries? It is easy to see that although e-
money might be more convenient and efficient than a payments system based on paper,
several factors work against the disappearance of the paper system. The first impacted
factor is the income gap among the population. It is clear that there is a strong divide
between income levels, especially between developed countries and undeveloped countries.
The next factor is the intellectual level. In low-income countries, people have not had much
access to modern forms of payment at banks and they feel difficult to adapt them. The
payment environment is also a factor to consider. Because in many countries, people often
encounter difficult conditions that are inappropriate and inconsistent. The last factor is legal
environment. Laws in many countries have not yet been fully finalized and are not yet
effective enough to ensure safety in payment process. All of them effect to being popular of
non-cash payment whole the world.

However, after all of them, the use of E-Money will likely still increase in the future
because of its effectiveness in the national economic growth of each country. Non-cash
payment not only reduces costs, increases labor productivity, but also increases
transparency of business operations. It also reduces the need to keep cash, reduces the
amount of cash in circulation, and reduces the need for cash and money. Using these means
solves the inconvenience of using cash such as unhygienic, unsafe, and unfavorable. Access
to e-commerce or the flow of technology and the universal Internet, and the explosion of
mobile as today, we can believe that the non-cash payment will be inevitable trend in the
near future.