Cashless society
A cashless society is an economic environment in which financial transactions occur exclusively through electronic means, such as debit and credit cards, mobile wallets, and digital transfers, obviating the need for physical currency like coins or banknotes.[1][2] No nation has fully transitioned to this model as of 2025, but countries including Sweden, Norway, and China demonstrate advanced adoption, with Sweden's cash usage comprising under 1% of GDP due to pervasive mobile payment systems like Swish.[3][4][5] This shift promises operational efficiencies for businesses, reduced costs from cash logistics, and lower incidences of theft or counterfeiting, as evidenced by empirical analyses showing accelerated economic growth in regions with high digital payment penetration.[6][7] Conversely, it introduces vulnerabilities including systemic reliance on internet connectivity and power grids, potential exclusion of unbanked or elderly populations unable to access digital tools, and heightened risks of cyber breaches exposing transaction data.[7][8] A primary controversy centers on privacy erosion, as digital trails enable comprehensive surveillance of individual spending patterns by governments and corporations, diminishing the anonymity inherent in cash transactions and raising fourth amendment concerns over warrantless financial data access.[9][10][11] In practice, Sweden's near-cashless framework has prompted legislative pushes to mandate cash acceptance to mitigate these issues, underscoring tensions between technological convenience and societal resilience.[4]Fundamentals
Definition and Scope
A cashless society denotes an economic arrangement in which physical currency—comprising banknotes and coins—is supplanted by electronic payment mechanisms for the preponderance of transactions. These mechanisms encompass debit and credit cards, electronic funds transfers, mobile applications, and digital wallets, enabling instantaneous value exchanges without tangible media.[1][12] The conceptual scope extends beyond mere transactional substitution to encompass systemic reliance on digital infrastructure, including robust telecommunications networks, secure data protocols, and regulatory frameworks governing electronic money. It pertains to diverse transaction types, such as point-of-sale retail, online commerce, bill settlements, and interpersonal remittances, while excluding non-monetary exchanges like barter. Empirical assessments delineate progress via metrics like the proportion of non-cash payments to total volume, with global point-of-sale non-cash transactions attaining 85% in 2024, though cash endures for low-value dealings and as a contingency amid infrastructural disruptions.[13][14][15] No polity has realized a fully cashless state as of October 2025, as residual cash utilization persists universally for reasons including financial exclusion of unbanked populations, preferences for anonymity, and vulnerabilities in digital systems. Projections suggesting imminent achievement in select nations, such as Sweden by late 2025, confront countervailing trends of sustained or resurgent cash demand, underscoring that complete obsolescence remains theoretical rather than actualized.[3][16]Enabling Technologies and Systems
The transition to a cashless society relies on technologies facilitating electronic transactions without physical currency, including near-field communication (NFC) for contactless payments and mobile wallets integrated with smartphones. NFC, standardized by the NFC Forum in 2004, enables short-range wireless data exchange between devices, allowing payments via tap-to-pay methods on cards or phones.[17] The first contactless payment occurred in South Korea in 1995 using a prepaid transit card, marking early adoption in limited sectors before broader rollout in the 2010s.[18] By 2015, the U.S. EMV migration prompted merchants to adopt NFC-capable terminals, accelerating contactless infrastructure.[19] Mobile wallets, such as Apple Pay launched in 2014 and Google Pay, digitize payment instruments by tokenizing card data for secure transmission, reducing fraud risks through device-bound encryption rather than exposing full card details.[20] These applications leverage smartphone ubiquity— with over 6.8 billion global users by 2023— to consolidate multiple payment methods into a single interface, enabling quick peer-to-peer transfers and merchant payments via QR codes or NFC.[21] Adoption surged during the COVID-19 pandemic, with U.S. mobile wallet transactions increasing substantially due to contactless preferences.[1] Backend systems underpin these front-end technologies, including payment gateways that authorize transactions and processors handling fund transfers between banks.[22] Major card networks like Visa and Mastercard provide the global infrastructure for routing and settling electronic payments, processing billions of transactions annually and supporting tokenization to enhance security in cashless ecosystems.[23] High-speed internet and robust telecommunications networks are essential enablers, ensuring real-time processing; for instance, digital payment growth correlates with expanded broadband access in regions pursuing cashless models.[6] Emerging elements include blockchain for decentralized ledgers in cryptocurrencies and potential central bank digital currencies (CBDCs), which could integrate with existing mobile systems for programmable money, though widespread implementation remains limited as of 2025.[24] Fintech innovations, such as application programming interfaces (APIs) for seamless interoperability, further bridge traditional banking with digital wallets, but dependency on reliable power grids and cybersecurity measures highlights vulnerabilities in fully cashless infrastructures.[25]Historical Development
Early Theoretical Foundations
The concept of a cashless society traces its earliest theoretical roots to utopian literature, where thinkers envisioned economies free from physical currency to eliminate perceived inefficiencies and social ills associated with money. In Thomas More's Utopia (1516), private property and money are abolished in favor of communal resource allocation, with goods exchanged directly and precious metals repurposed for utilitarian or punitive uses, arguing that money obstructs the procurement of necessities.[26] Similarly, Edward Bellamy's Looking Backward (1887) proposed a state-managed system issuing annual "credit cards" representing fixed shares of the national product, rendering traditional money obsolete by centralizing production and distribution under public control.[26] Nineteenth-century reformers extended these ideas toward practical alternatives to cash, often linking cashlessness to labor-based valuation and communal exchange. Robert Owen, in works from 1821 to 1849, advocated replacing gold and silver with expandable media like labor notes, proposing communal bazaars for direct barter of goods at fixed prices to stabilize exchange and mitigate monetary fluctuations.[26] William Morris's News from Nowhere (1890) depicted a post-capitalist world where money vanishes alongside profit motives, with voluntary labor and shared goods eliminating the need for payment, viewing remuneration as an archaic notion.[26] Samuel Butler's Erewhon (1872) satirized monetary systems through "musical banks" issuing symbolic, non-commercial tokens, highlighting cash's arbitrary value while critiquing its societal dominance.[26] These visions commonly intertwined cash elimination with socialist principles, aiming to foster equality via communal ownership, though they presupposed radical institutional changes rather than technological innovation.[26] The modern theoretical framework for a cashless society emerged in the mid-20th century, particularly in the United States during the 1950s and 1960s, as business futurists and industry analysts projected electronic systems supplanting cash amid rising automation. John Diebold's 1967 article "When Money Grows in Computers" in the Columbia Journal of World Business articulated a vision of computerized funds transfer rendering physical cash redundant, emphasizing efficiency gains in retail finance.[27] The Diebold Group's 1966 survey and the American Management Association's An Electronic Cash and Credit System (1966) promoted a "cashless/checkless" paradigm, forecasting inevitable adoption through shared electronic terminals and institutional momentum.[27] Popular media amplified this narrative, as in Time magazine's November 5, 1965, feature "Credit: Toward a Cashless Society," which highlighted banking experiments in automated payments.[27] These early modern theories shifted focus from ideological restructuring to technological determinism, positing electronic networks as causal drivers of dematerialized exchange, though realization depended on unresolved infrastructural challenges.[27]Modern Implementation Milestones (2000s–Present)
In 2004, Alipay was launched by Alibaba in China as an online escrow payment platform, facilitating secure e-commerce transactions and laying groundwork for widespread digital payments in the region.[28] The service initially supported partnerships with over 200 financial institutions, enabling users to pay without physical cash or cards for online purchases.[28] The year 2007 marked significant advancements in mobile money with the launch of M-Pesa by Safaricom in Kenya on March 6, allowing SMS-based transfers, deposits, and withdrawals through agent networks, which proved transformative for unbanked populations by processing billions in transactions annually.[29] Concurrently, Barclays introduced the world's first contactless credit card in the United Kingdom, using radio-frequency identification for quick taps at terminals.[30] By 2008, major card networks including Visa, Mastercard, and American Express began issuing contactless cards globally, standardizing near-field communication (NFC) technology for low-value transactions and reducing reliance on physical cash handling.[19] In 2011, Google Wallet debuted in the United States as an early NFC-enabled mobile wallet app, permitting storage of payment cards on Android devices for tap-to-pay functionality, though initial adoption was limited by device compatibility.[31] Sweden's banking sector advanced cashless infrastructure in 2012 with the launch of Swish, a real-time peer-to-peer and merchant payment app developed collaboratively by six major banks, which by mid-decade handled over half of the nation's mobile transactions.[32] In 2013, WeChat Pay integrated into Tencent's WeChat messaging app in China, leveraging its vast user base to enable seamless in-app and QR code-based payments, contributing to a surge in everyday cashless usage.[33] Apple Pay launched on October 20, 2014, introducing tokenization and device-bound authentication via Touch ID for iPhone users, which accelerated NFC adoption in retail by prioritizing security through one-time dynamic codes rather than static card data.[34] India's Unified Payments Interface (UPI), introduced in April 2016 by the National Payments Corporation of India, unified multiple bank accounts into a single mobile app for instant, 24/7 transfers, fostering explosive growth post-demonetization and handling over 10 billion transactions monthly by the early 2020s.[35] These developments, underpinned by maturing NFC standards and smartphone penetration, propelled global shifts toward cashless ecosystems, with accelerated implementation during the COVID-19 pandemic from 2020 onward enhancing contactless preferences for hygiene and convenience.[19]Measurement and Empirical Trends
Key Metrics for Assessing Progress
The proportion of non-cash transactions in total payment volume, measured both by number of transactions and by value, serves as a primary indicator of progress toward a cashless society, with declines in cash's share signaling reduced reliance on physical currency. By transaction count, cash accounted for 46% of global payments as of 2024, down from 50% in 2023, reflecting accelerated digital adoption post-pandemic.[36] By value, cash's share is typically lower due to its concentration in low-value micropayments, though comprehensive global data remains fragmented; in advanced economies like Sweden, non-cash payments exceeded 98% of transaction volume by 2023.[37] Per capita non-cash transaction volumes provide another benchmark, capturing infrastructure penetration and user habits; globally, these rose from 91 in 2017 to 135 in 2020, driven by expansions in card, mobile, and real-time systems, though growth slowed in some regions amid economic disruptions.[38] Cash-in-circulation metrics, such as currency demand relative to GDP or broad money supply (M1), track hoarding and transactional use; persistent declines in this ratio, as observed in eurozone countries where cash holdings stabilized below 10% of GDP by 2022, indicate structural shifts away from cash, though rebounds during crises like COVID-19 highlight its residual role as a hedge.[39] Merchant cash acceptance rates and ATM withdrawal frequencies offer granular proxies for everyday usability; in the UK, cash acceptance fell to under 20% of merchants by 2023, correlating with a 30% drop in ATM usage since 2019.[40] Account ownership and digital wallet penetration rates gauge foundational access, with the unbanked population—estimated at 1.4 billion adults globally in 2021—serving as a barrier; progress is evident in regions like Sub-Saharan Africa, where mobile money accounts reached 21% of adults by 2021, enabling non-cash micropayments.[41]| Metric | Description | Global/Regional Example (Recent Data) |
|---|---|---|
| Non-cash transaction share (volume) | % of payments by count excluding cash | 54% globally (2024)[36] |
| Non-cash transaction share (value) | % of payment value via digital means | Varies; ~80% in Nordic countries (2023)[42] |
| Cashless transactions per capita | Annual digital payments per person | 135 (2020, up from 91 in 2017)[38] |
| Currency in circulation / GDP | Ratio indicating cash demand | Declining in advanced economies; euro area ~9% (2022)[39] |
Global and National Usage Statistics
Globally, digital payments have seen rapid adoption, with approximately two-thirds of adults worldwide utilizing them as of recent surveys.[43] The volume of digital payment transactions reached 1.2 trillion in 2024, marking a 12% increase from the prior year.[44] Projections indicate that 3.2 billion people will use mobile payment apps by the end of 2025, driven primarily by growth in the Asia-Pacific region.[45] Cashless transactions are forecasted to nearly double in number between 2024 and 2028 as real-time payment systems expand.[46] Despite this, cash retains a projected 11% share of global transaction volume by 2030, reflecting persistent usage in certain demographics and regions.[47] National usage varies widely, with Nordic and East Asian countries leading in cash displacement while Southern Europe and parts of Africa lag. In Sweden, cash accounts for only 6% of point-of-sale payments as of 2024, with digital wallets comprising 30% and cards the remainder.[48] China exhibits near-universal adoption, with mobile payments reaching a 96% penetration rate among users and digital wallets holding 72.72% of the payments market share in 2024.[49][50] In India, the Unified Payments Interface (UPI) processed over 18 billion transactions monthly by mid-2025, contributing to digital payments representing 99.8% of transaction volume (though 97.7% of value) in the first half of the year.[51][52]| Country/Region | Cash Share of Transactions (Latest Available) | Key Digital Metric |
|---|---|---|
| Sweden | 6% (POS, 2024) | Digital wallets: 30% of POS[48] |
| China | <4% (implied by 96% mobile adoption, 2024) | Digital wallets: 72.72% market share[49][50] |
| India | <0.2% volume (2025 H1) | UPI: 18B+ monthly transactions[52] |
| United States | ~16% (2024) | Contactless: 25% of card transactions (2023)[53][54] |
| Italy | 61% (2023-2025 est.) | High cash reliance in Mediterranean[55] |
Trends in Cash Circulation and Withdrawal
In many economies, the volume of cash in circulation has continued to rise in absolute terms, even as its role in transactional payments diminishes amid the expansion of digital alternatives. For instance, global cash holdings often serve as a store of value, particularly in periods of economic uncertainty, leading to increased demand for high-denomination notes. A study of 22 economies from 2000 to 2018 found factors like inflation and financial development influencing circulation, with persistent growth in cash demand despite digitalization efforts.[56] More recent data from the Bank for International Settlements (BIS) indicate that while cash in circulation has experienced a further decline relative to broader payment digitalization, absolute levels remain substantial, reflecting hoarding and informal economy uses.[42] Transactional cash usage shows a clearer downward trend in advanced economies. In the euro area, cash accounted for 52% of point-of-sale transactions by number in recent surveys, down from 59% in 2022, though it still dominates low-value payments.[57] The European Central Bank (ECB) reported an 8% drop in overall cash use across the region over two years ending in 2024, with steeper declines in countries like the Netherlands and Sweden.[58] In the United States, cash comprised 14% of consumer payments by number in 2024, with individuals averaging seven cash payments per month—stable since 2020 but overshadowed by cards at 65% combined share.[59][60] These shifts correlate with smartphone penetration exceeding 80% globally by 2025, facilitating contactless and mobile payments.[61] Cash withdrawal patterns exhibit slower declines than payment volumes, underscoring cash's enduring role as a liquidity buffer. BIS Red Book statistics for 2021 showed withdrawal volumes and values dropping less sharply than overall cash payments, a trend persisting into 2023 as digital options like instant transfers reduce routine ATM visits.[39][42] In the euro area, younger cohorts (ages 18-27) displayed steady withdrawal reductions from 2022 to 2024, while older groups maintained higher reliance.[62] Globally, cash withdrawals support informal sectors and privacy preferences, with no uniform collapse despite projections of further erosion by 2025 in high-digitalization regions.[63] This resilience challenges narratives of inevitable obsolescence, as central banks note cash's complementarity to digital systems rather than outright replacement.[42]Global Case Studies
Sweden: Near-Cashless Experiment and Backlash
Sweden has pioneered a shift toward digital payments, with widespread adoption of mobile apps like Swish—used by over 80% of the population—and contactless cards, resulting in cash comprising less than 1% of GDP in circulation by the late 2010s.[64][65] By 2022, only 8% of Swedes reported using cash regularly, and the value of physical kronor in circulation had halved since 2007, driven by efficient infrastructure and consumer preference for speed and convenience.[66] In-store cash payments hovered around 10% in 2023, a slight uptick from prior years but still marking a steep decline from 2010 levels, as digital transactions dominated 90% of the economy.[67][68] This experiment has elicited backlash over exclusionary effects, particularly for vulnerable populations such as the elderly, low-income individuals, and recent immigrants who rely on cash due to limited digital access or distrust of banks. Research indicates that cash dependence correlates with poverty, leaving these groups unable to participate in routine transactions as merchants increasingly refuse cash—permitted under Swedish law if notices are posted—exacerbating social isolation and reliance on intermediaries.[64][69] Privacy concerns have also mounted, as pervasive digital tracking enables surveillance, while system outages, such as those from cyber incidents, render entire communities payment-incapable without cash backups.[70] Geopolitical tensions have intensified scrutiny, with Sweden's central bank, the Riksbank, warning in 2024–2025 reports that heavy digital reliance heightens vulnerability to hybrid warfare, including Russian-linked cyber-attacks disrupting banking infrastructure.[68][69] Financial crimes, including fraud via digital means, have surged alongside the cash decline, prompting police alerts that eliminating cash could obscure money laundering detection.[71] In response, the Riksbank has advocated for resilience measures, including mandatory cash acceptance infrastructure and offline payment options, while a 2024 government inquiry proposed securing cash supply chains by 2026, signaling a policy pivot to preserve cash as a societal safeguard amid these risks.[72][73][74]China: State-Driven Digital Dominance
China's transition to a cashless economy has been accelerated by the dominance of mobile payment platforms, with over 943 million individuals actively using digital payments as of June 2023, representing a penetration rate exceeding 70% of the population.[75] Alipay, operated by Ant Group (an Alibaba affiliate), and WeChat Pay, integrated into Tencent's messaging app, control over 90% of the digital transaction volume, processing combined quarterly volumes of approximately RMB 186 trillion in Q3 2023 alone.[75][50] This shift has rendered cash usage marginal, accounting for only 3.7% of the total money in circulation by 2023, with urban areas seeing over 90% of transactions conducted digitally.[76][77] The Chinese government's promotion of digital payments has intertwined private innovation with state objectives, fostering widespread adoption through regulatory support for fintech while maintaining oversight to align with national priorities. Policies since the mid-2010s have encouraged the integration of payments into everyday life, including subsidies for QR code infrastructure and mandates for merchants to accept digital methods, which propelled transaction volumes to surpass $80 trillion annually by 2024.[78] However, as private firms like Alibaba and Tencent amassed control—handling $17 trillion in transactions by 2017—the state intervened to reassert authority, viewing unchecked private dominance as a risk to financial sovereignty and monetary policy.[79] This reflects a causal dynamic where initial market-driven growth enabled scale, but state directives ensured alignment with broader control mechanisms, including data collection for economic monitoring. Central to state-driven dominance is the e-CNY, China's central bank digital currency (CBDC), developed by the People's Bank of China since 2014 to counter private payment oligopolies and foreign digital threats like cryptocurrencies. Pilots began in select cities in 2020, expanding to over 29 cities by 2025, with cumulative transaction volumes reaching 7 trillion e-CNY (about $986 billion) by June 2024 across 17 provinces.[80][81][82] The e-CNY enables programmable features for targeted stimulus and offline transactions via SIM cards, but its design facilitates enhanced transaction traceability, allowing the government to monitor flows in real-time—capabilities absent in private apps—thus augmenting surveillance over financial activities previously siloed in corporate ecosystems.[83][84] Adoption remains limited relative to private platforms, with 120 million wallets and 16.5 billion yuan in circulation as of June 2023, comprising just 0.16% of broad money supply, indicating a strategic layering atop existing systems rather than wholesale replacement.[85] Despite this dominance, vulnerabilities persist, including exclusion of rural and elderly populations—estimated at 196 million non-mobile payment users in 2024—and recent policy adjustments to preserve cash access for tourists and seniors amid economic recovery efforts.[87] The state's approach exemplifies a hybrid model: leveraging private-sector efficiency for mass adoption while deploying sovereign tools like the e-CNY to enforce causal levers of control, from economic policy transmission to behavioral oversight, positioning China as a testing ground for digitally mediated governance.[88]India: Post-Demonetization Shift via UPI
On November 8, 2016, the Indian government demonetized ₹500 and ₹1,000 banknotes, which constituted approximately 86% of the currency in circulation by value, aiming to combat black money, corruption, and counterfeit currency. This policy triggered an acute cash shortage, disrupting daily transactions and compelling millions to pivot toward digital alternatives amid long queues at banks and ATMs. In the immediate aftermath, point-of-sale (POS) transactions surged nearly threefold from October 2016 levels, while ATM withdrawals declined by about one-fifth, reflecting a forced acceleration in digital payment adoption.[89][90] The Unified Payments Interface (UPI), a real-time gross settlement system developed by the National Payments Corporation of India (NPCI) and launched in April 2016, emerged as the cornerstone of this shift. Prior to demonetization, UPI volumes were negligible, with monthly transactions hovering around 0.1 million in late 2016. Post-demonetization, government incentives, interoperability features, and QR code-based simplicity drove exponential growth, as cash scarcity made digital options indispensable for peer-to-peer and merchant payments. By 2017, UPI transaction volumes had climbed to 17.9 million annually, marking the onset of widespread usage.[91][92][93] UPI's expansion continued unabated, fueled by apps like BHIM, PhonePe, and Google Pay, which integrated seamlessly with the platform. Annual transaction volumes escalated from 83.7 billion in 2023 to projections exceeding 131 billion in 2024, culminating in monthly peaks such as 18.39 billion transactions worth ₹24.03 lakh crore in June 2025. By September 2025, UPI facilitated 19.63 billion transactions valued at ₹24.90 lakh crore, accounting for over 50% of global digital payment volumes and positioning India as a leader in real-time payments. This growth outpaced traditional methods, with UPI's average transaction size dropping from ₹3,149 in 2016 to ₹1,717 in 2017, broadening access for micro-payments in retail and informal sectors.[91][51][94] Key enablers included NPCI's low-cost infrastructure, zero fees for most personal transactions, and regulatory support from the Reserve Bank of India, which enhanced trust through features like two-factor authentication. Demonetization acted as a catalyst by normalizing digital habits, evidenced by a 50% rise in e-wallet and POS usage among merchants within months. However, cash circulation recovered post-2017, reaching new highs by 2023, indicating UPI's dominance in urban and semi-urban areas but persistent reliance on cash in rural regions due to uneven internet penetration and banking access. Despite these limitations, UPI has significantly reduced cash dependency for everyday transactions, with over 260 million active users by 2023, though full cashless transition remains constrained by infrastructural gaps.[91][95][96]Other Examples: United States, Nigeria, and Emerging Markets
In the United States, cash remains a primary payment method despite growth in digital alternatives, with consumers making an average of seven cash payments per month in 2024, accounting for 14% of all payments.[60] More U.S. consumers reported using cash than any other payment instrument in recent surveys, with 83% of respondents indicating recent cash use, though this marked a slight decline from 87% in 2023.[97] Low-income households, earning under $25,000 annually, relied on cash for 24% of payments in 2024, highlighting persistent dependence among vulnerable groups amid uneven digital adoption.[98] Overall, the U.S. shows no trajectory toward a fully cashless society, as cash usage has stabilized rather than declined sharply, supported by its role in small transactions and privacy preferences. Nigeria has experienced one of the fastest shifts away from cash globally, with cash transactions declining 59% between 2014 and 2024, the steepest drop among major economies tracked by WorldPay.[99] Electronic payment transactions reached N1.07 quadrillion ($640 billion) in 2024, up from prior years, driven by platforms like NIBSS Instant Payments, which handled 11.2 billion transactions—a 15.5% increase from 2023.[100] At point-of-sale terminals, cash comprised only 40% of transactions in 2024, down from 91% in 2019, reflecting rapid mobile wallet and card adoption amid smartphone penetration nearing 60%.[101] However, cash persists for its perceived low error risk and ease in merchant refunds, and projections indicate cash could still account for 32% of transactions by 2030, underscoring incomplete transition.[102] In broader emerging markets, digital payments are advancing through mobile money leapfrogging traditional banking, particularly in regions with high unbanked populations, though cash retains dominance for informal economies and reliability. Latin America anticipates a 17.3% compound annual growth rate in digital transaction volume through 2024, fueled by real-time systems and e-commerce.[103] Asia-Pacific leads globally in cashless transaction volume, surpassing Europe and North America combined, with projections for digital payments reaching $11.55 trillion worldwide in 2024 at a 9.52% annual growth.[104] Nigeria's progress exemplifies African trends, where instant payments like NIP comprised 82% of cashless volume in 2023, but challenges including infrastructure gaps and cybersecurity risks slow full cashless adoption across these markets.[105] Cash decline remains uneven, with persistent use in rural and low-trust areas despite policy pushes for digital infrastructure.[106]Purported Benefits
Economic Efficiency and Reduced Costs
A shift toward cashless payments can lower central bank expenditures on currency production and distribution, as physical cash requires ongoing manufacturing, secure transport, and replacement of worn notes. In the United States, the Federal Reserve's 2024 currency operating budget totals $1.104 billion, covering printing and logistics for notes that could diminish with reduced demand.[107] Similarly, in the United Kingdom, the Bank of England spent £119 million on note production and distribution in 2019-20, alongside Treasury costs for coins, illustrating baseline expenses that scale with circulation volume.[108] Empirical estimates suggest that eliminating cash reliance could redirect these funds, though fixed infrastructure costs persist even as usage falls. For merchants and businesses, cashless systems reduce handling, storage, and security outlays, which constitute significant operational burdens. Cash acceptance incurs costs of 4.7% to 15.3% per $100 in sales for retailers, encompassing counting, reconciliation, armored transport, and theft prevention.[109] In the US, businesses bear approximately $55 billion annually in cash-related expenses, including $40 billion in theft losses, which digital alternatives mitigate by minimizing on-site cash holdings and enabling instantaneous settlements.[110] Mobile payments further cut merchants' cash-handling overheads while alleviating consumers' carrying and safekeeping costs, as documented in analyses of platforms like those in Kenya's M-Pesa ecosystem.[111] Per-transaction economics favor digital methods at scale, enhancing overall efficiency. Sweden's Riksbank estimates cash payments at SEK 13.4 per transaction in 2021 social costs, versus SEK 4.4 for debit cards and Swish transfers, reflecting lower manual processing and error rates in digital channels.[112]| Payment Method | Total Social Cost (SEK billion, 2021) | Cost per Transaction (SEK) |
|---|---|---|
| Cash | 4.21 | 13.4 |
| Cards | 17.08 | 4.4 |
| Swish/Credit Transfers | 26.06 (combined) | 4.4 (Swish) |