The future of finance is digital and a growing number of countries are at the forefront of the transition to a cashless society. Driven by convenience, security and efficiency, these countries are rapidly adopting digital payment methods, paving the way for a world where physical currency becomes obsolete. This shift toward digital transactions aligns with increasingly strict regulations surrounding the movement of physical money.

Several factors contribute to this global trend. Digital payments offer unparalleled convenience and speed, eliminating the need for physical currency. Security issues associated with cash, such as theft and fraud, are minimized through digital transactions.

Efficiency is another key factor, as businesses benefit from streamlined accounting and reduced cash handling costs. Additionally, technological advances such as contactless cards and mobile payment apps make cashless transactions more accessible than ever.

Dubai is actively pursuing a cashless future with the launch of its ‘Dubai Cashless Strategy’ in 2024. This ambitious initiative aims for 90% of all transactions to be digital by 2026. The strategy focuses on improving secure digital payment solutions in the public and private sectors. , with the aim of positioning Dubai as a global digital capital. With strong government support and a thriving fintech ecosystem, Dubai is poised to become a leading example of a cashless society in the Middle East.

Pioneering Sweden has seen cash use fall, with cards and mobile payments dominating transactions. Even street vendors prefer the ease of digital transactions. Although there are no specific “cashless regulations”, the Swedish journey began in the 1960s with the introduction of bank cards and has progressed steadily through innovations such as Swish, a popular mobile payment app . This gradual change, coupled with a decrease in the use of cash, places Sweden at the forefront of the cashless movement.

In China, Alipay and WeChat Pay have revolutionized transactions, making QR code payments ubiquitous. From street artists to multinational corporations, everyone appreciates the convenience and speed of mobile payments. Even though the government has not imposed a cashless society, the widespread adoption of mobile payments, fueled by their convenience and accessibility, has organically led China towards a cashless future.

Tech powerhouse South Korea benefits from high credit card penetration and fast-growing mobile payment systems like Samsung Pay and Kakao Pay. The “Non-Cash Payments Promotion Law”, implemented in 2014, aims to reduce dependence on cash and promote digital transactions through tax benefits and incentives, thereby accelerating the South Korea’s transition to a cashless society.

Singapore, a global financial hub, has been actively promoting electronic payments since the 1980s with initiatives such as GIRO and NETS. Although not explicitly aiming for a completely cashless society, the government has fostered an enabling environment for the adoption of digital payment through various initiatives such as the “Smart Nation” program, which encourages the use of electronic payments for greater efficiency and convenience. This, coupled with the wide availability of various cashless options, has positioned Singapore as a leader in the digital finance space.

The move toward a cashless society is not just about convenience and technology; it also aligns with increasingly strict regulations on cash transactions. In the eurozone, for example, moving €10,000 or more in cash requires explicit approval from banks, which in turn adhere to regulations set by the European Central Bank (ECB). This is part of a broader effort to combat money laundering and terrorist financing, as outlined in guidelines such as the Anti-Money Laundering Directive (AMLD).

The growing prevalence of digital payments provides a complete record of transactions, making it easier for authorities to track and monitor money flows. This increased transparency can help prevent illicit activities and strengthen financial security, thereby supporting the global transition to a cashless society.

Despite the potential benefits, the transition to a cashless society raises important questions around privacy, financial inclusion and risks of abuse of power. As we move towards a future where digital transactions dominate, striking a balance between security and individual freedoms will be crucial.

Stefano Virgilli

The author is a member of the International Press Association