Visa, Roubini ThoughtLab Reveal Economic Bonuses Seen by “Cashless Cities”
A new report from Roubini ThoughtLab, commissioned by Visa and titled “Cashless Cities: Realizing the Benefits of Digital Payments,” has recently emerged and brought with it a note of controversy. It illustrates what may potentially result from such switches, especially if those switches take place on more of a grassroots level, starting at the city rather than the country.
The report suggests that, for 100 cities studied, the end result could be a combined net benefit—in cost savings and new revenue—of $470 billion per year. That’s said to be about three percent of those cities’ average gross domestic product (GDP), so it’s potentially a pretty big step forward.
What’s more, this doesn’t even consider a completely cashless operation—why they call it a “cashless city” in that case is unclear—but rather an “achievable level of cashlessness,” where an entire city adopts cashlessness at the same rate as the upper 10 percent of cashless users in said city.
Consumers save time with mobile banking and mobile payments transactions, and save cash by not having it infrequently stolen. Why criminals wouldn’t instead steal smartphones is, again, unclear, but the study suggests cashlessness can save consumers almost $28 billion per year. Governments can save almost four times that amount—almost $130 billion—with increased tax revenues and cost savings by letting people pay bills from mobile devices instead of staffing offices.
Businesses stand the best chance at savings, with almost $312 billion at stake thanks to increased sales revenues and the complete removal of costs associated with cash. Cash and checks, the report notes, cost businesses 7.1 cents of every dollar to process, but mobile payments cost just five cents.
It’s easy to dispute some of these figures, but functioning within the bounds the study establishes, it’s easy to see why some people are seriously thinking about cashless societies as a way to go. If just 100 cities acting in concert could save that kind of money, well, what would an entire country save? Probably not much more than that given how urbanized the entire planet’s getting, but potentially quite a slug of cash.
If nothing else, it’s food for thought; if we get things running a little less dependent on cash, we may well come out ahead in the long run.