"IT STARTED as a piece of economic science fiction. The cashless society, a society in which all bills and debits are paid through electronic media, is now more than ever a looming possibility; some say it can be realized as early as the year 2012.
Imagine working in one of the busiest districts of Tokyo. The fight for the last maki during the peak hours of your favorite sushi bar will have had you settling for the next best thing. Yet, the reassuring thought of not having to fall too far behind a long line of hungry customers counting the coins in their purses has somewhat made the extra time you spent waiting for your much coveted sushi all the more worthwhile.
That is the typical lunch break of Toru Nashimito as narrated by an international journal. Mr. Nashimito is a Japanese 40-year-old who, like much of Japan today, finds payment to the last centavo a convenient swipe-of-the-card (or cellphone) away. In but a few seconds, Nashimoto had paid for his $45 lunch tab. No change from the cash register. No waiting for confirmation. No pin code to enter.
A Global Trend
In Japan especially, cashless transactions are fast becoming the norm of everyday life. The Japanese are flashing their smart cards and their mobile phones on virtually all of their purchases, from magazines to fast food to public transport, even vendo machines.
Japan, however, is not alone. Joining the ranks of those countries converting to electronic cash is New Zealand. In fact, a recent report by her Retirement Commission reveals that electronic funds transfer (Eftpos) had already displaced cash as the most common method of payment for such things as groceries, power bills, and mortgages. According to the same study, the number using Eftpos had remained stable at 83%, while those using cash had fallen from 84% in 2005 to 77%, a whopping 6% shy of the now most widely used means of transaction.
The concept has become far from arcane, even to countries with relatively backward technologies such as the Philippines. The smart cards and mobile phones are embedded with unique antennas and integrated circuit chips that allow the devices to receive and emit electronic signals, which in turn, translate to electronic money. This is the same technology employed in Hong Kong’s widely used Octopus card. Launched in 1997, the card is now enjoyed by more than 13 million users.
Europe and the United States are expected to follow suit, albeit not as seamlessly as the transition of their eastern counterparts. Branded as the credit card nation, the U.S. is probably the best example of a country that has done away with cash. In 2005, only 31% and 15% of the public used cash and checks, respectively, while users of credit and debit cards ballooned to 51%. Slowly but surely, Americans are holding onto their cards rather than their currency, and analysts say that eventually e-cash will penetrate the iPod nation, if only for speedier transactions." ...more
