Top 5 cashless countries in the World
In the early phase of civilization, a cashless system was prevalent. People used to exchange things as per their necessities – this system is called the Barter system. Now, the world is going to be cashless. Is the world is moving toward this type of cashless economy?
Big No…with the advancement of technology and automation, the concept of exchanging money is changing. Digital currencies are becoming the household term day by day. Carrying less amount of printed notes or coins and use of digital currencies and transaction through online means – called cashless economy.
Let’s discuss which countries are going to be cashless the earliest and their present status of digital transactions.
World’s top 5 cashless countries
Sweden the largest country in northern Europe, bordered by Norway to the west and north, Finland to the east, is one of the technologically advanced countries. In 1990 Sweden faced a financial crisis caused by an uncontrolled real estate bubble, international recession switching from anti-unemployment policy to anti-inflationary policy. Following which Sweden GDP declined by 5%, to tackle this the central bank of Sweden increased interest rates to 500%.
Sweden is an export-oriented mixed economy and lands as the sixteenth richest country in terms of GDP per capita. Sweden is considered one of the most expensive countries coupled with the highest telephone and internet penetration.
In 1661, Sweden was the first country in Europe to introduce banknotes. Currently, 58% of payments in Sweden are being made by card, and only six percent are made in cash. Swedish banks have issud debit cards to citizens aged seven years or older, which is 97% of the population.
About 80% of swedes use cards for shopping in restaurants and to make and withdraw cash if required need to use atm
Sweden’s federal bank introduced a digital currency named –“e-Krona” – to accelerate cashless transactions. It is estimated that by 2013, Sweden will be the first country to go for 100% cashless.
Canada, the second-largest country by total area, is a North American Country. It shares the world’s largest land border with the United States.
Canada was a founding member of the UN and has membership in the World Trade Organization, G20, and Organization of Economic Operation and Development (OECD).
It has a mixed economy with a nominal GDP of 1.73 trillion Canada stands at 10th place in terms of the largest economy and one of the least corrupt countries.
According to OECD reports Canada is one of the most educated countries in the world. It spends 5.3 percent of GDP in the education sector, resulting in 99% adult literacy. Canadian people lead the most quality life and in terms of social purpose, it is ahead of all countries- USA News.
According to data, 83% population have credit cards having, with the highest limit of contactless payment of $250.
Payments Canada Data report, 62% of Canadians reported using less cash and 42% have avoided shopping places that do not accept contactless payments.
At the end of 2019, 73% of total transactions were electronically and the use of cash has declined about 40% in the last 5 years. Due to Covid-19, the online transaction has raised, still, 54% of people use cash for transactions at shopping places.
3. China (going to be cashless Asian country)
China, the most populous country with a population of more than 1.4 billion, situated in East Asia, has been characterized as a potential superpower due to its large economy and powerful military. Since the covid-19 outbreak, China has been in news almost every moment.
China is the largest trading partner with the Asian nation, with a total trade value of $345.8 billion accounting for 15.2% of Asia’s total trade. In 2020 it has become the largest trading partner of the European Union for goods.
Since, 2010 China is the world’s second-largest economy in terms of nominal GDP, totaling about $ 15.66 trillion.
In 2018, IMF forecasted China will overtake the US in terms of nominal GDP by 2030. Chinas cashless society is growing most rapidly fueled by fintech platforms like Tencent’s WeChat Pay ad Alibaba’s Alipay.
After the Covid-19 pandemic, Chia launched its digital currency – digital Yuan or RMB. The aim is to increase contactless payment and the first country to be cashless in the world.
A report claimed, almost 60% of china’s population will make payments via mobile payment apps by 2023. A facial recognition Payment system enables you to pay for purchases without carrying money, card – just smile to pay. This facility has been built in more than 100 cities.
4. South Korea
South Korea, a developed country, located in South Asia. In terms of nominal GDP, it ranked 10th largest in the world. People of South Korea experience the fastest internet connection and densest high-speed railway network.
South Korea, which has a mixed economy, is the most industrialized country according to OECD. South Korea was among the few countries which were able to avoid recession in 2007-2008. It is the third-largest in Network Readiness Index – among Asian countries -indicates high development in countries’ information and communication technology.
More than half of Korea’s bank branches no longer accept cash deposits ad withdrawals. Almost every South Korean people have smartphone 100% smartphone adoption rate.
Bank of Korea said lack of demand for cash has led to a drop of counterfeit money and also added a record low of only 272 forged bills were found in 2020.
In Korea most, the popular cryptocurrency used is “Pay Coin” run by Danal Fintech. According to Korean bank data, in 2022 average amount of payments made electronically hit a new value. The daily average value of the electronic financial transaction amounted to 705.5 billion own ($633.7 million).
5. United Kingdom
United, kingdom, surrounded by the Atlantic Ocean, with the North Sea to the east, the English Channel to the South, and the Celtic Sea to the South-West, was the world’s first industrial country and world’s foremost power in the 19th and 20th century.
UK has the membership of G20, G7, NATO, OECD, WTO, and European Union. The UK is the world’s fifth-largest economy and the second largest in Europe.
The Guardian Report: the UK has moved a big step closer to becoming a cashless society as the use of notes and coins fells by 35% in 2020.
Since 2017, the use of cash has been declining by 15% each year and in 2020 it reached 35%. About 83% of people in the UK now use contactless during 2020. 13.5 million consumers either did not use notes and coins at all or only once a month.
2021 Global Payment report projects the UK will be cashless by 2024. According to research by OnBuy.Com, 75% of people in the UK choose not to pay with cash. Around 78 of people now own a smartphone, expected to ump the number to 95% in the aged group 16-328 years.
The other countries soon going to be cashless are:
- Hong Cong
What are the potential advantages and disadvantages of a cashless economy in a country?
Advantages of Cashless Economy in a country
- Advantage of Cashless Economy
- Easier currency ex-change while traveling internationally
- Quicker transaction
- Less tax evasion
- Less crime and theft (not the existence of physical currency)
- Not risk of handling and storing notes and coin
- Better compilation of economic data
- Elimination of middleman
The disadvantage of Cashless Economy in a country
- Privacy Issue
- Malware, Virus, attack
- Mobile thief
- Connectivity issue due to not sufficient internet penetration
- A hurdle for senior citizen
What are contactless payments?
A contactless payment, as the name suggests, doesn’t require any physical contact between the buyer’s smartphone or credit card, or debit card and the POS or receiving point. services using a debit, credit, smartcard, or another payment device by using radio frequency identification (RFID) technology and near-field communication (NFC) – all are contactless payments.
Example of Contactless payment mobile apps:
- Apply Pay
- Google Pay
- Alibaba Pay
- Samsung Pay
- PhonePe etc.
What are e-wallets?
An e-wallet definition is exactly what it sounds like: an electronic wallet. It is a type of electronic card which is used for transactions made online through a computer or a smartphone. Its utility is the same as a credit or debit card. An E-wallet needs to be linked with the individual’s bank account to make payments.
Hope you enjoy reading the list of the top 5 cashless countries in the world. Do comment below, in which country do you want to visit and pay contactless.
Quick summary of the top 5 cashless countries in the world:
- South Korea
- United Kingdom