A Cashless Economy




evil root (3) in particular
cash evasion transaction
illegal smuggle corruption
repeat replace elimination
trace facilitate advantage
follow estimate underground (2)
curb penalize change hands
retailer let go (2) point of view
fraud so far (2) banknote
insist reluctant voluntary
aspect advocate for instance
hacker trail (2) business (2)
risk proof (3) authority
secure concern ease of use
wallet lose (2) stand to gain
fail keep up charge (2)
fee consumer alternative
gain maintain generate
torn replace counterfeit
initiate wrinkled counterfeit-proof
debate issue (3) pass on (2)
reward monetary fundamental
deposit incentive proportion
current stimulate situation
effect safe bet encourage






Money, so they say, is the root of all evil.

Cash money in particular, facilitates illegal activities like tax evasion, smuggling, corruption and cash-in-hand employment.

More and more German economists are calling for the elimination of cash — and its replacement worldwide with electronic payment systems.

Then every transaction would leave a digital trail that could be followed.

Heike Joebges, a macroeconomics professor in Berlin, has discussed the idea repeatedly with her students.

She sees clear advantages.

Heike Joebges, Berlin University of Applied Sciences: “Even in industrialized countries, it’s estimated that fourteen to sixteen percent of GDP changes hands in the underground economy.

That’s quite a large proportion doesn’t get taxed. And it’s mostly from illegal or criminal activities.

If we curbed that, it would be very helpful — from the state’s point of view.”

But German consumers are reluctant to let go of their cash: more than half still prefer to pay with banknotes and coins.

Industry would to see things change faster than they have so far.

In some 500 businesses in Berlin, customers can now pay using a mobile phone. It’s a model project initiated by mobile network operators and retailers.

But could it really completely, replace cash?

Consumer advocate Klaus Muller insists electronic payment systems have to remain voluntary.

Klaus Muller, German Consumer Federation Organization: “There’s a social aspect: some people don’t have bank accounts — homeless people for instance. And that has to change.

But it’s also about the data trails. Not everyone has to know about everything I buy. That’s nobody else’s business.

So cash is still a very important instrument.”

If money only existed in digital form, every transaction could be electronically traced.

The question is, by whom?

Only by the tax authorities?

By secret service agencies?

Or hackers and fraudsters?

What if the wrong people gained access to the data?

Or the system failed?

Among German consumers, at least, data protection seems to be less of a concern, than factors like possible risks and ease of use.

Person One: “If Paypal, mobile or credit cards will eventually be safe and secure; I have no problem with it.”

Person Two: “Cash is something that you can see, but you have no same control over a plastic card.

I don’t like that.”

Person One: “If you lose your wallet, it’s gone. But if you lose your card, you report it and the money’s still there.

So I don’t see it as this gentleman here.”

But who stands to gain?

Consumer advocates are worried that if cash were eliminated, banks could start charging more fees.

Klaus Muller, German Consumer Federation Organization: “Any form of payment, whether credit card or mobile phones generate fees. Why should I pay that when there’s a good alternative?”

That’s oversimplified though: cash also generates costs.

Heike Joebges, Berlin University of Applied Sciences: “Remember, we’re already paying to maintain cash — it’s very expensive. We have to keep up the quality of the banknotes. The Central Banks have to replace wrinkled and torn banknotes. And spend quite a lot making them counterfeit proof.

So we’re all paying indirectly.

Those costs would disappear with a cashless economy.

So paying electronically might actually be cheaper.”

But would banks pass those savings on in the form of lower fees?

There are other larger issues involved in the debate over a cashless economy.

How would it affect the European Central Bank’s monetary policies?

A fundamental question is, should savers be rewarded with interest on their deposits? Or penalized with negative interest rates, giving them an incentive to spend their money?

In the current situation, it would be easier for the European Central Bank to try to keep the money in savings accounts from growing, letting it lose value instead. Then people would have an incentive to consume and spend more, which would then stimulate the economy.

Klaus Muller: “Some economists say we should be encouraged to consume more and save less with negative interest rates.

And if there were no more cash money, that plan could easily be put into effect.

Yet another reason to maintain cash currency.”

Cash has been king for over 2,000 years of human history. So it’s a safe bet that it will be around for some time to come.

*     *     *     *     *     *     *


“Money is the root of all evil.” What were the examples mentioned in the video?

The black, grey or shadow economy is confined to developing nations only. Is this correct or wrong?

Bills, Banknotes.
Do the government, businesses and private citizens have the same attitude about cash and a cashless economy?

Credit Cards, Plastic.
Are there disadvantages to a cashless economy, according to the consumer advocate?

Bank Card, Debit Card.
Ordinary citizens are divided about digital money. True or false?

Smartphone Payment App.
What are the advantages of a cashless economy?

Online Shopping, e-Commerce.
What do the experts say about the European Central Bank and interest rates?

e-Payments, Digital Payments.
Cash will probably be eliminated in a few years. Yes or no?


Bank Deposit.
Paying by credit card, debit card and mobile phone is becoming more common. What do you think? How has it been changing?

ATM, Withdrawal.
How much or how often do people in your city use credit cards, debit cards or smart phone payments? Do you and your friends use electronic payments? When do you use them? How often do you use e-payments? Always, usually, frequently, often, sometimes, seldom, rarely or never?

Savings, Bank Balance.
Do you prefer using cash, credit cards, debit cards or smartphones or it depends? Do people use plastic for certain purchases and cash for others?

Loan, Borrow.
I know some people who never use cash. True or false? Who are they? Do you know anyone who only pay and deal with cash? Why do they only deal with cash?

Electronic Money Transfer.
How do you and others feel about cash being eliminated? Would you and your friends — and people in your country — like to see a cashless society or would you miss cash?

Is there a difference in purchasing methods between villages, towns and cities; and different regions of your country?

Online Banking.
Do payment methods differ among age groups, income groups and socio-economic classes?

Processing Fee, Transfer Fee.
Are there any disadvantages of forgoing cash?

Credit Card Debt.
What will happen in the future?

Comments are closed.