A cashless society particularly benefits the poor as itenhances financial inclusion, where individuals can consistently pay billswithout the use of a bank account. Consumers in developing countries arefinancially marginalised as there’s a lack of affordable and adequate financialservices available to allow the poorest in society to access banking systems.Digital services and mobile systems have made financial services moreaccessible enhancing our banking systems and it will automatically help reducepoverty in areas that do not fall in a banking network. In Somalia, 51 of outevery 100 have a mobile phone subscription (Rowley 2016). The country’s bankingsystem has nearly dissolved therefore Hormuud Telecommunication Company havedeveloped a money transfer system have allowed Somalians to up to $3000 a dayin the country, as for many citizens holding cash would them vulnerable.
But inthe developing economy many heavily rely on cash as becoming cashless can crushthe costs and risks of holding cash, for instance, in the event of a naturaldisasters can obliterate a large quantity of cash holdings. (Singletary 2012).From a government viewpoint there are numerous benefit. Thegovernment can impose full transparency in transaction which will decrease gapsbetween firm’s actual and stated outcomes and incomes.
Accounting systems willbecome more accurate as transaction histories and figures are maintained with acomplete record of activity. It has been claimed that tax evasion strips up to70% of a countries tax income (Farrell 2016) and cash is a severe implicationwhen evading tax. Going cashless increases money trails and digital footprintscreating difficulty when hiding money as it is easier to locate and catch taxevaders, increasing tax revenue gained by the government. With a possibility oftax revenue increase this could also offset a fall in income tax or nationaldebt being reduced.
Calls for the eradication of cash have strengthened bysubstantial evidence that high-value paper notes increase the scope and havebeen prevalent in other illegal or fraudulent activities such as moneylaundering, black money or undeclaring assets. The former chief of StandardChartered Peter Sands, claimed criminals move more than £1.4tn around the worldeach year (Farrell, 2016).