By Mira Korber, guest blogger.
They say “cash is king.” But these days, perhaps cash was king.
Sweden is becoming a “cashless society.” Commuters pay bus fees via credit card and text message. Religious institutions take electronically transmitted donations.
The positives? Certain crime statistics have decreased. In 2008, Sweden experienced 110 bank robberies. In 2011, that number had shrunk to 16.
The negatives? Cybercrime has increased. In 2000, computerized fraud cases totaled 3,304. In 2011: almost 20,000.
Being cash-free would certainly lead to a lighter pocketbook. Or might it lead to no pocketbook at all? What would happen to wallet sales? Money clips? Restaurant tips? Jewelry purchases (as in Italy, for example)?
Read here to learn the implications of a cash-free America.
The Economic Lesson
Paying with cash or credit/debit represents a tradeoff. While a cashless society would remedy tax evasion and counterfeiting, it would diminish cash-dependent transactions.
An Economic Question: When do you use cash and when do you use a credit/debit card? Why?