The Risks of Institutional Failure Within a Cashless Society (Advances in Economics Management and Political Sciences)

Summary

• Digital payment adoption reduces transaction costs and administrative duties, but introduces risks of resource centralization without institutional checks [p.1].p.1
• The complete removal of physical cash strips away transaction anonymity, enabling panoptic surveillance and predatory data collection by corporations [p.3].p.3
• Concentration of payment data creates platform monopolies that shrink survival space for SMEs and generate deadweight losses in the economy [p.3].p.3
• Regulatory failures and digital exclusion force governments to incur extra public expenses for fraud compensation and cybersecurity infrastructure [p.4].p.4
• Policy solutions include preserving physical cash access, enforcing strict anti-monopoly laws, and ensuring digital finance progress is measured by inclusiveness [p.4].p.4

Key insights

1. A fully cashless social model risks creating excessive centralization of resources if proper institutional balances are not established.p.1
2. Digital payment records increase transparency, reducing social governance costs for detecting tax evasion and money laundering.p.2
3. Smartphone device unaffordability remains a major driver keeping mobile internet penetration low in developing regions.p.2
4. Commercial tech platforms leverage transaction data to conduct predictive behavioral modeling, compromising individual consumer autonomy.p.3
5. Regulatory actions in South Korea against Kakao demonstrate the growing risks of market dominance and data abuses by tech conglomerates.p.3
6. Data monopolies by dominant digital platforms create economic deadweight loss by producing market outcomes away from the social optimum.p.3
7. Information asymmetry between consumers, digital platforms, and regulators serves as a root cause of systemic financial exclusion.p.4
8. Maintaining physical cash options is vital to prevent vulnerable populations, such as the elderly and low-income groups, from economic marginalization.p.4