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There are a significant number of people around the world, even in highly developed societies, who do not have a bank account or a bankcard. In 2015, the Financial Inclusion Commission estimated nearly two million adults did not have a bank account in the United Kingdom. In the United States in 2017, 14.7 million adults (6.5 percent of the population) did not have a bank account. Some people with poor credit histories are unable to acquire a bankcard.

Recent studies have indicated that the subset of people within advanced economies who would find it difficult to cope with the removal of cash was much larger than popularly thought. A report into the likely effects of a cashless society in the United Kingdom released in 2018 found 17 percent of adults or 8 million people would struggle. The report argued that the trend toward becoming a cashless society was being promoted without proper consideration for the situation of those who would find it very difficult to adapt to this change. This included the poor, those without easy access to ATMs, those who were isolated by language or culture, those with particular disabilities, and those without technological competence.  

The report stated, 'For many people in the UK, using cash is not a matter of choice, but of necessity. Digital payment options just don't yet work for everyone...There is a risk that digital payments innovation could continue to focus predominantly on the 80 percent who are mainstream adopters, not the 20 percent with more challenging needs.' The report referred specifically to the situation in Sweden (which has moved faster toward becoming cashless than any other European economy). It stated, 'The Swedish government has recently agreed to "put the brakes on" their shift to cashlessness because they are leaving people behind and need time to plan how to include everyone.'

Niklas Arvidsson, an associate professor at Sweden's Royal Institute of Technology, noted that Sweden has found that some people have become economically disenfranchised because for whatever reason they have been unable to use the electronic systems and have had their situation compounded by banks removing ATMs and refusing to supply cash and retailers refusing to take cash.  A National Australia Bank (NAB) commentary published in July 2021 similarly noted the negative impact that a rapid move to a virtually cashless economy had had on different sections of Swedish society. The commentary notes, 'Communities with limited access to digital technologies or a reluctance to give up cash entirely, in particular the elderly, the disabled and those on low incomes, in rural areas or those experiencing domestic violence, were hard hit by the switch.' The consequences for those unable to adopt the new practices led to a significant Swedish about-face. At the start of 2021, the Swedish Government introduced legislation requiring banks to provide a minimal level of cash services, including access to ATMs - something that had become increasingly rare outside the country's major cities.

Critics maintain that Australia needs to be cautious in its adoption of cashless services and should continue to make provision for those not ready or able to take up cashless payment provisions. Research from the Reserve Bank of Australia (RBA) shows that a quarter of Australian consumers would face 'major inconvenience' if they could no longer use cash - and that frequent cash users were more likely to be older, have lower household income, live in regional areas and have limited internet access. Drawing on overseas experience, Dean Pearson, Head of Industry Analysis at NAB has warned, 'Customers have an expectation they'll be able to transact with you in multiple ways. So, for the time being, it makes sense to have the infrastructure in place to enable you to take both cash and cashless payments...For the foreseeable future, prudent business owners will continue to offer customers a choice of how to pay.'

2. A cashless society could encourage consumers to overspend and cause serious economic and psychological problems
Those who are critical of increasing our reliance on cash-free transactions claim that digital spending leads to reckless and excessive purchases. The result is often an increased level of personal and family debt, leading to major financial stress and increased psychological problems.

It is claimed that when people make electronic purchases, they have less sense of the reality of the outlay they are making. It is further claimed that without the exchange of physical cash for goods people tend to underestimate what they are spending. The tendency to spend more when making digital purchases is describes as the 'cashless effect'. The Decision Lab as explained this phenomenon: 'This effect occurs in any scenario where we use digital forms of payment instead of cash, which these days makes up most of our transactions. Unfortunately, whether it's a big or small purchase, we are likely to spend more money when we don't physically have to give it up.' An example is used to explain why cashless transactions lead to greater expenditure. The Decision Lab article states, 'Imagine you are at Best Buy, looking at an $899 TV. It is very unlikely that you would decide to buy the TV if you had to pay for it in cash. For one, you would have to carry around a lot of money, which can be unsafe, and secondly, it would feel a lot harder to part ways with a wad of cash than to give someone your credit card. Secondly, you may not actually have $899 saved up to use. But, if you can use a credit card, you don't need to have that money immediately. So, you go ahead with the purchase.'

Parents have expressed a particular concern that digital spending makes it very difficult for younger people to appreciate the real cost of their purchases. MyState Bank's General Manager for Digital and Marketing, Heather McGovern, has stated, 'In Australia, we have had an extremely fast adoption of online technologies. However, the overwhelming feeling from parents is that as money becomes less tangible, there is a need to help children understand the value of money and spend responsibly.' MyState's research has indicated that 83 percent of parents are concerned their children are spending too easily. 65 percent are worried about easy access to buy now, pay later (BNPL) services being provided for young people, while 54 percent of parents believe their children are vulnerable to financial scams.

The overspending that often accompanies the use of debit cards can lead to significant debt problems. The Decision Lab states, 'The cashless effect becomes a real problem when the individuals that are tempted to overspend do not have money. When individuals spend more because transactions are digital, they sometimes are unable to pay that money back. In America alone, consumer debt was close to 14-trillion in 2019.'  Critics of over-reliance on digital transactions have noted that Australia already has extremely high levels of household debt. A report published in The Guardian on January 2, 2021, stated, 'The ratio of Australian household debt to net disposable income stands at 217 percent - meaning the average household owes twice what it makes in the year. Measured relative to GDP, the Bank of International Settlements puts Australian household debt at 119 percent - second only to the Swiss.'

Studies in Australia and overseas have found that indebtedness can have serious effects on people's emotional and physical wellbeing. A study by the United Kingdom Royal College of Psychiatrists has found that worry over debt can lead to sleeplessness, anxiety, depression, and drug abuse, and can damage education and work prospects and family and other personal relationships. In some cases, indebtedness can be a significant factor prompting people to commit suicide. Sabrina Romanoff, a clinical psychologist, and professor at Yeshiva University in New York City, has noted, 'Financial stress is a significant risk factor for suicide, particularly among people who are tasked with the role of "provider" or those who are responsible for preserving the lifestyle of those who depend upon them.' A 2020 study published in The American Journal of Epidemiology showed financial hardship can make people up to 20 times more likely to attempt or complete an act of suicide.

3. A cashless society would erode consumer and citizen privacy
Those who are opposed to a cashless society argue that it is a threat to the privacy of consumers and citizens. They argue that cashless transactions currently enable sellers to track consumer behaviour making the consumer vulnerable to promotional schemes designed to shape what people buy. Opponents also argue that governments in the future may access this consumer information in ways that threaten citizens' freedom.

Digital transactions undermine consumer privacy because all digital transactions are recorded and traceable. As explained by investment reporter Tim Shufelt in March 2019, 'Every non-cash transaction leaves a digital trail. Each tap or swipe of a credit card reveals, at a minimum, one's identity, basic financial account information, purchase amount, as well as location and time. Credit cards attached to loyalty programs additionally track shopping habits. Online purchases can also reveal one's IP address and details on browsing history. And some phone payment apps may track their user's movements.'

This type of data can be used for targeted advertising and personalised promotions based on the consumers' already-tracked shopping habits. For example, in 2012, a New York Times article detailed how statisticians working for Target in the United States came up with a way to predict which of its shoppers were pregnant, by analysing purchases of products such as supplements and lotions and generating a 'pregnancy prediction' score. This type of data can then be used to direct promotions to consumers based on their assumed needs. For example, the above group of women could receive tailored advertisement for baby products. A 2017 Austrian report titled 'How Companies Use Personal Data Against People' noted that this type of consumer manipulation was already available via the data on consumer behaviour gathered by companies such a Facebook and Google. The report states, '[A corporation promoting gambling] may target persons with a high predicted "customer lifetime value" who are interested in gambling and have recently been searching online for credit-related topics.' Critics note that the sort of personal data Facebook and Geigle currently supply to advertisers and promoters could equally be made available through consumers' digital purchases history.

Critics claim that China demonstrates the extent to which governments could potentially use the information gained from cashless transactions to regulate their citizens and shape their behaviour. China is trialing a digital currency, the digital yuan, which the government will generate, and which will allow the Chinese Communist Party (CCP) to monitor and potentially control the spending behaviour of Chinese citizens. Critics have warned that in a digital-yuan-consumer society, the government could deny dissidents and human rights activists, for example, access to their digital funds. They have further warned that those doing business in China may be  required to use the digital yuan, giving the CCP access to records of their financial transactions. American commentators have speculated about the implications of such developments for their own society, suggesting that governments in the future could track consumer digital transactions and actively discourage consumers from making certain purchases. This could be justified on social or economic grounds, as with inhibiting citizens' purchase of cigarettes, alcohol or what are deemed unhealthy foods. However, critics are concerned about the potential for an accelerating loss of personal freedoms.  in October 2018, Global News reported that Statistics Canada ( a government agency) had requested from banks the transaction and personal information of 500,000 customers. This was purportedly to track household and consumer trends, and without the consent or knowledge of subjects.

4. A cashless society makes some forms of crime easier
Critics of Australia becoming a cashless society argue that digital fund transfer makes some crimes far easier. They claim that rather than reducing crime, a cashless society could simply facility different types of crime. Dr Richard Harmon, managing director of financial services at data cloud firm Cloudera, has stated, 'As payments move online, there would be an increased risk of crimes such as identity theft, account takeover, fraudulent transactions and data breaches, due to the higher volume of cashless transactions and more points of exposure for the average consumer.'

Identity theft and account takeover are growing problems worldwide which would be worsened by a complete reliance on digital transactions. An overview of these problems was given by Queensland in a warning published on October 14, 2021. Their warning states, 'As we evolve into a cashless society with more and more businesses and individuals using credit cards and electronic banking, the likelihood of becoming a victim of fraud increases. Criminals have embraced modern technology to pursue their dishonest activities. Methods used include credit card skimming, false and stolen identities and taking advantage of ineffective security systems to obtain Internet banking passwords and account particulars.' The extent of this criminal activity is increasing. In an article published on February 1, 2021, Sarah Sharples, writing for news.com.au noted, 'One in four Aussies have fallen victim to identity fraud, with the misuse of their personal information costing them $300 on average. Victims also spend $80 and 34 hours [a year] dealing with the fallout of the fraud, research...[has]found.

The types of personal information most at risk include someone's name, credit card details, bank account information, address and date of birth.' The cost of identity crime in Australia was $3.1 billion in 2019 according to the Australian Institute of Criminology. This is a 17 percent increase from 2016. In August 2019, the Australian Consumer and Competition Commission reported identity theft was up 55 percent since the beginning of the pandemic. Commentators note online shopping, digital banking and cashless payments are increasing the opportunities for identity theft, as 81 percent of Australians now shop online and a third have their bank details connected to their phone or smartwatch. Australian security researcher Troy Hunt has given a further outline of the types of crime facilitated by digital transactions. Hunt states, 'We're seeing things like the rise of crypto cards ... bitcoin wallets for example stolen in various cases. We've seen attacks against point of sale terminals - Kmart in the US had a big attack a few years ago. We've also seen attacks against physical [credit and debit] cards, using things such as RFID [radio-frequency identification] readers.'  

Another area of criminality fostered by digital transactions is financial abuse of the elderly and of spouses. Lachlan Maddock, a reporter for Fintech Business, has stated, 'Elderly people, who might lack understanding of digital technology, would be particularly vulnerable. Couples with joint bank accounts are also at risk - money can be tracked and controlled by one person. These issues are already of great concern, but they'd be even worse in a cashless society.' Better Health While Aging describes this crime against the elderly as 'financial exploitation... a subset of elder abuse... [which] basically means inappropriately using an older person's financial resources, for the benefit of someone other than the older person. Such exploitation is often - but not always - facilitated by the perpetrator using "undue influence," in which they create some kind of manipulative dynamic that allows them to take advantage of the older person.' Critics of exclusive reliance on digital funds transfer claim such transactions facilitate this form of abuse.

5. Natural disasters, technological malfunctions and sabotage can leave people without access to their money
Those who oppose to an exclusive reliance on cashless transactions argue that they are not sufficiently reliable. It is noted that there are many ways in which the technology supporting a cashless system can become unavailable to people. Natural disasters, for examples fires and floods, power outages, and the deliberate sabotaging of systems can close off electronic access to funds.

On October 29, 2021, Justin Pritchard, writing for The Balance, noted, 'Glitches, outages, and innocent mistakes can...cause problems, leaving you without the ability to buy things when you need to. Likewise, merchants have no way to accept payments when systems malfunction. Even something as simple as a dead phone battery could leave you "penniless," in a sense.'  On June 19, 2019, The Conversation published an article by Jay Zagorsky, a professor at Boston University, in which he stated, 'A cashless society makes a country's entire economy more vulnerable to disruptions. That's because a cash-free economy depends on several things always working: a stable supply of electricity, constant communications networks and robust security.' Countries are becoming increasingly aware of the range of factors that could disrupt their economic systems. These factors are intensified in economies where consumers rely heavily on cashless transactions.

Australia is a country that is particularly prone to natural disasters and is likely to become more so. The report of the Royal Commission on Australia's natural disaster preparedness was tabled in federal parliament in October 2020. It explained Australia's high level of natural disaster risk and suggested that global warming would increase this risk. It stated, 'Australia has a long history of natural disasters. The causes of natural disasters have been shown to be many and complex. Australia's weather and climate agencies have told us that changes to the climate are projected to increase the frequency and intensity of natural disasters in Australia. Further warming over the next 20 years appears to be inevitable. Sea-levels are projected to continue to rise. Tropical cyclones are projected to decrease in number but increase in intensity. Floods and bushfires are expected to become more frequent and more intense.'

The Royal Commission's report noted that individuals' access to immediate funds and their capacity to purchase necessities were undermined by the power outages caused by the 2019/20 bushfires. It stated, 'These disruptions...meant that people could not...purchase essential goods due to either supply chain issues or the inability to use EFTPOS... At best, these difficulties add to the stress of an already stressful situation, and at worst, they place the lives and safety of individuals, households and communities at risk.'

An ABC report published on December 26, 2021, interviewed Michael Keys, the owner of a service station in the New South Wales beachside town of Batemans Bay, an area which was directly affected by the 2020/21 bushfires. Mr Keys noted that businesses and customers had had to rely heavily on physical money during the bushfires as the electricity and internet infrastructure had been knocked out. He stated, 'From a business perspective, unless you've got infrastructure in place that's very reliable, you can't get rid of cash.'

Electronic banking services can also fail users because of faults in their systems. On June 17, 2021, it was reported that the mobile apps and websites of several Australian banks including Westpac, St George, ANZ and the Commonwealth Bank went down following technical issues with a global service provider. Most major banking websites came back online around 5pm, after having been down for around two hours. Several other websites, including Virgin Australia, Allianz Insurance and CMC Markets also went down. Critics claim that failures such as these highlight the danger of relying exclusively on digital transactions.

Another of the threats created by widespread reliance on digital funds is foreign interference deliberately designed to stymie another nation's economy by disabling electronic funds transfer. The United States. government recently acknowledged that it is deploying malware and viruses inside Russia's electrical grid that could cripple it. That is because the United States believes Russia has already infiltrated America's power grid. Australia has also determined that its essential services (including electricity transmission and economic funds transfers) are threatened by the actions of numerous hostile governments. Reporting on probable digital interference in Australia by other nations in 2020, the global cyber security firm Crowdstrike found China was behind 67 percent of state-sponsored attacks. Iran was responsible for 7 percent, North Korea 5 percent, Russia 1 percent, while another 20 percent were suspected state-sponsored attacks, but their source was unknown.