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There is just one shopping week left until Christmas and chances are you’ll be flashing the plastic instead of splashing the cash as you pick up last-minute gifts. This is because we are becoming an increasingly cashless world – but what does that really mean, and what will the convenience of a cashless society really cost?

2017 may yet go down in history as the year cash died. India removed high value bills from circulation; France limited cash transactions to €1,000 and countries around the world pushed ever further towards the use of digital transactions. World Finance reports that cashless payments have overtaken the use of notes and coins in many advanced economies and developing countries such as Kenya are not far behind. The M-PESA, a service that allows users to store and transact money via their mobile, has proved a huge success in Kenya and several other African nations where people don’t always have ready access to banking institutions.

There are countless benefits to going cash-free. Firstly, it’s safer. Venues and offices that hold little or no cash on site have a greatly reduced risk of being robbed. Customers have the reassurance that their money has consumer protection during digital transactions. Governments can track digital payments, and anything that can be tracked can be taxed. It is a crucial step in tackling tax evasion and fraud.

Cash is also costly. According to World Finance, the US economy is rife with high denomination notes and there is ‘20 times more cash floating around than just 40 years ago’.

READ: Spring budget 2017: the heavy cost for the self-employed

Big bills enable criminals to hide large sums, which perpetuates crimes including drugs, trafficking and counterfeit goods and funds terrorism. India’s scheme was intended to clamp down on crime and tax evasion – yet such a radical approach was not without its problems.

Rupee notes became worthless overnight. Huge queues formed at banks and the market was knocked as workers abandoned their jobs in a desperate attempt to salvage their savings. Small businesses were amongst the worst hit and many folded.

The case against going cashless

Whilst digital payment does offer some protection for both seller and buyer, it is not immune to criminals and fraudsters who can hack accounts and launch cyber-attacks. Nor will it stop the proliferation of black markets. The Dark Web has become a haven for entrepreneurial criminals who use untraceable payment systems and digital currencies such as Bitcoin.

Governments’ capacity to monitor transactions has major implications for privacy. Your purchases, movements and behaviour can all be traced every time you use your card and the data sold on. The same argument that has been made over the decades in relation to intelligence services, surveillance and the Internet now applies to what we spend – a sobering thought as we approach the Christmas rush.

The drive towards a cashless society is fuelled by convenience. How much easier for consumers to simply tap their card than to hunt through wallets for cash, or even to remember and enter a pin code? Conversely, companies rely on this ‘mindless’ approach to spending. As money becomes conceptual rather than physical, consumers are lulled into a sense that their funds aren’t being relinquished. Brick and mortar shops, as well as an increasing amount of websites, are accepting low-value payments to be made on cards, and subscription services depend on customers’ taking a laissez-faire approach to their finance management.

The future of money

The future looks set to not only replace cash but debit and credit cards too. Mobile phone payment systems such as Apple Pay and Android Pay continue to rise in popularity for vendors and consumers alike. Apps allow us to pay through our phones without leaving the comfort of our homes.

However, it is unlikely that notes and coins will disappear for good. Some of the world’s largest economies, including Germany, remain largely driven by cash. Reports estimate that 2 billion people around the world do not have a bank account, prohibiting them from joining the online banking revolution.

We also attach sentimental value to money, treating it as we would old photos and films. For millions of us, money still represents solidity and security, and many of us are still stashing our cash, waiting for that rainy day.