Cashless Society Essay, Research Paper

Cashless Society

One article that caught my attention recently was one presented in the November 21, 1998 issue of The Economist. The article was about a cashless society and how well alternative forms of tender were catching on. According to the article, some forms of the “smart card” haven’t caught on as well as expected.

Smart cards have information embedded in them, essentially allowing a consumer to purchase things quickly and conveniently. It was the hope that these cards would supplant paper and coin money forever. However, that has not been the case.

Smart cards do exits, however. In the article, it is mentioned that smart cards with chips embedded in them allowed a customer to quickly swipe the card through the reader. Thirty-two cents is then deducted. Simple and easy, right? Well, it hasn’t caught on. One of the main reasons that smart cards have struggled a bit is that it has competition in the form of current debit cards. People can purchase anything they desire with these cards already. Therefore, there wouldn’t be any added value of having a debit card. A survey of 2,400 North Americans by Smart Card Forum gives some interesting results. According to the survey, more than three-quarters would have liked to have a card that stored vital medical and car-related information. Less than half wanted a card that they could use to purchase things with.

Another problem facing smart cards is compatibility. Current smart cards utilize only on a small range of readers. For example, a smart card for parking meters in Boston would not work for ones in New York. And since local governments control those areas of jurisdiction, it has to take a national effort to make it work. This means that the U.S. government must implement and lead the way. When this happens, then we will truly see the fall of paper and coin money.