U.S. one dollar bills are arranged for a photograph in London, U.K., on Wednesday, Feb. 23, 2011. (Chris Ratcliffe/BLOOMBERG)

So, will this new era of digital money lead to a rising tide that lifts the boats of America’s “99 percent” — or will it lead to a further chasm in the digital divide?

On the surface, of course, the idea of people swapping payments via little devices attached to their tablets, exchanging money via apps on their smart phones — or by merely waving them around — conjures up an image of a techno-elitist society where digital money is merely another perk of being in the “1 percent.” After all, tablet devices and smart phones aren’t cheap, especially if you’re struggling to make ends meet. However, this ignores one important fact: “unbanked” Americans — those who don’t use banks and can’t open traditional bank accounts — do, however, send text messages to each other and download apps from the Internet.


A man sends money through a pioneering mobile phone service called M-Pesa, in Kenya's capital, Nairobi. (TONY KARUMBA/AFP/GETTY IMAGES)

In countries that have been early to embrace the cashless society, such as the emerging nations of sub-Saharan Africa, the movement has unlocked the extraordinary economic potential of their citizens. This is borne out not just anecdotally, but also through reports from international aid organizations. As the Financial Times points out, innovations such as Kenya’s M-Pesa have actually led to the empowerment of society’s poorest members for one simple reason: In today’s mobile world, it’s much easier to get someone to use a cellphone than it is to get someone to open a bank account. The Financial Times goes on to report that, in Kenya, 15 million people use M-Pesa, resulting in over $8 billion in transactions that never would have occurred otherwise.

In addition to this economic effect, there are other positive social consequences to moving to a cashless society. Sweden’s proponents for the cashless society, for example, highlight the potential for lower crime rates and fewer cases of fraud and corruption. Intuitively, this makes sense. If fewer people are carrying around cash, it’s just not as easy to pull off robberies or make under-the-table cash payments. In 2011, there were only 16 bank robberies in all of Sweden — down from 110 just a few years ago.

Not all is rosy, however. A cashless society is also a society where there is no longer any anonymity. (Have you ever tried to give someone some “unmarked” 1’s and 0’s when you’re making payments online?) There are understandably concerns about privacy, especially when payments are made through social networks. At the end of the day, however, there is a direct correlation between becoming a cashless society and becoming a digitally innovative society. The end of money may just mean the beginning of prosperity.

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