金融Essay模板：Pros and Cons of Cashless Economy
本文是金融專業的Essay范例，題目是“Pros and Cons of Cashless Economy（無現金經濟的利弊）”，眾所周知的短語“現金為王”可以解釋為，在購買方面，與其他任何商品相比，現金占最大比重，但近年來，這可能不再是真的。一個無現金社會，硬幣和紙幣被虛擬貨幣取代，似乎是世界的發展方向。
Introduction介紹
The commonly known phrase “Cash is King” can be interpreted to mean that cash holds the most weight in terms of purchasing compared to that of any other commodity, however in recent years this may not be true anymore. A cashless society in which coins and notes are replaced by virtual forms of money seems to be where the world is heading.
To analyse the potential future of cash we firstly must look at the development of payment systems. Bartering was the first medium of exchange recorded, this is where people would exchange goods and services for another good or service. The first example recorded is in Egypt c.9000BC where people would use grain or wheat. This was then developed into a physical coin that was first minted by King Alyattes in Lydia, now part of turkey c.600BC. It wasn’t until 1250AD that a common currency, the Florin gold coin was minted ad widely accepted in Europe. This would begin the development of the concept of a unified international currency, for example the euro; used by 37 countries in the eurozone. In Stockholm, Sweden c.1661 a banker by the name of Johan Palmstruch introduced the first paper currency. It was a piece of paper that could be redeemed for a certain amount of coins, this was a huge development for the way in which transactions were carried out. Paper currency could be easily mass produced, and it wasn’t highly dependent on certain valuable raw materials that possessed intrinsic value such as gold or silver. Paper currency reigned supreme as the method of choice for transactions until 1946 when John Biggins developed the first credit card, called “Charg-it.” Since then and up until this day the combination of cash and card has been the dominant medium of exchange. The modern principle of money is still the same, however where gold was once used as the medium of exchange it is now used by central banks to back and give value to the currency in their respective country. For example, one of the biggest repositories of gold is in the US Federal Reserve in New York. It is located 80 feet below the streets of Manhattan and contains around 550000 gold bars, with and estimated net worth $203.3 Billion. The gold there is 98% owned by central banks from 36 different countries. With the future uncertain, and cash being deemed to be a thing of the past there is a huge debate going on in the background on whether or not a cashless society is really the best step forward.
“Cashless society is an economic concept where financial transactions are executed in an electronic format rather using banknote. In a cashless society, each party will have an electronic card or device which will be used to execute the transaction. The cashless transaction may be executed in the form of Credit card, Debit card, Mobile wallet, Point of sales (POS), Internet banking, Mobile banking etc. Some real-world examples are PayPal, Google Wallet, MoneyBookers, Payoneer, Amazon Go and so on.”
“無現金社會是一個經濟概念，金融交易以電子形式進行，而不是使用紙幣。在無現金社會中，每一方都有一張電子卡或一臺設備，用來執行交易。無現金交易可以通過信用卡、借記卡、手機錢包、POS、網上銀行、手機銀行等方式進行。現實世界中的例子有PayPal、谷歌Wallet、MoneyBookers、Payoneer、Amazon Go等?！?/p>
Unbeknownst to people a lot of the transactions that we do on a daily basis, whether it is buying a coffee with a debit card or purchasing tickets to go see a music concert over the internet, these are all regarded as cashless transactions. Either side of the debate has good arguments. Some aspects of cash are not reproducible in cryptocurrencies, any transaction made through e-transactions leave a digital trace so obviously a cashless society would deprive people of their human right to privacy. Cryptocurrencies have developed a good base for privacy although they also have their respective drawbacks, such as its value being variable dependant on the market share price.
As technology advances and financial institutions continue to develop and implement debit/credit cards, internet banking and other means of making the lives of their client easier and the transition towards a cashless society is being blindly accepted it is good to have a thorough knowledge of the pros and cons of the inevitable cashless society vs the tried and trusted cash.
隨著技術的進步和金融機構不斷開發和實施借記卡/信用卡，網上銀行和其他方式使他們的客戶的生活更容易，向無現金社會的過渡正在被盲目地接受，這是很好的全面了解不可避免的無現金社會與可靠的和可信的現金的利弊。
In this essay I will be outlining the pros and cons of a potential cashless economy to hopefully conclude whether it would be beneficial to today’s society.
Lower Transaction Cost低交易成本
A huge benefit of the idea of a completely cashless society is the fact that there would be a lower transaction cost. In a real life scenario, if a consumer wishes to make a payment in cash, they must first procure the physical money which more than likely have come from an ATM which has to be maintained, stocked and serviced by the bank which charges you for this in the form of monthly charges. If you look in depth even further, the paper money has to be designed with a high degree of security (e.g. Watermarks, security threads and colour-shifting ink) and then mass produced. To demonstrate the cost of making notes I will use the American $100 bill as an example. It costs 12.3cents to fully make one $100 bill, that means for every $1 million in $100 bill’s it costs the American government $10000. To put this into perspective the Bureau of Engraving and Printing reportedly produces around 38 million notes every single day, with a face-value estimate of $541 million. In the EU the cost of money is said to be around 0.45% of the GDP.
完全無現金社會的一個巨大好處是交易成本更低。在真實的生活場景中,如果一個消費者愿意支付的現金,他們必須首先獲得物理錢更有可能來自一個ATM維護,庫存和服務的銀行費用你每月收費的形式。如果你更深入地觀察，你會發現紙幣的設計必須具有高度的安全性(例如水印、防偽線和變色油墨)，然后才能大規模生產。為了說明做筆記的成本，我將以百元美鈔為例。一張百元美鈔的制作成本是12.3美分，這意味著每100萬美元的百元美鈔，美國政府要花費1萬美元。據報道，美國鑄印局(Bureau of Engraving and Printing)每天發行約3800萬張紙幣，面值估計為5.41億美元。在歐盟，資金成本據說約占GDP的0.45%。
“In 2018, there was $1.7 trillion of these notes in circulation. The Fed spends almost $700 million a year to manage the currency. It pays for printing, transportation, and destruction of the mutilated currency.”
To bring this argument a bit closer to home and a lot more relatable, the “rounding” initiative that was introduced in Ireland back in 2015 reportedly took €126 million worth of coins out of circulation. As well as this it would have saved the government a lot of money in coin minting costs.
With the obvious alternative to a transaction involving cash being a form of e-transactions, whether it being in the form of a debit or credit card. One major benefit for these forms of payment being it is so convenient, fast and easy to perform electronic transactions, also that the business can be thousands of miles away. Of course, there is a cost for using a card for a purchase, however when the cost of cash is taken into consideration, there is no competition for the winner, in terms of costs to the consumer; electronic payments.
End of Tax Evasion and Money Laundering終結逃稅和洗錢
For a long time, it has been a well-known fact that tax evasion and money laundering is a major threat to a nation’s economy. Amongst economists it is a common belief that a cashless society would bring about the end of such illicit affairs. It is obvious that there is a strong positive correlation between the use of cash and tax evasion due to the benefits of cash being very nearly untraceable, this is why most criminal organisations are run on cash and then the money is laundered through business ‘fronts.’ For the purpose of having a relatable example to relate to these points I have chosen to use the Indian economy as a case study to describe the effects tax evasion has on an economy. In November 2016 the Indian government passed a bill which resulted in most high valued bank notes withdrawn from circulation overnight. The bills that were removed from the ‘legal tender’ status were the 500 and 1000 Indian rupees; the value of these notes roughly equates to €6.30 and €12.60 respectively which may not be a lot however the two notes made up 86% of the legal tender in circulation. A major factor for passing this bill into law was to try and put a stop to the widespread tax evasion in India. The ‘black-market’ in which people would evade paying their tax bills is said to be worth 20% of the country’s GDP as well as the fact that 93% of the country at the time were working ‘off the books’ for cash in hand. As a solution the Indian government implemented a biometric payment system to keep track of all transactions.
長期以來，逃稅和洗錢是一個國家經濟的主要威脅，這是眾所周知的事實。經濟學家普遍認為，無現金社會將終結此類非法行為。很明顯，使用現金和逃稅之間存在很強的正相關關系，因為現金的好處幾乎是無法追蹤的，這就是為什么大多數犯罪組織都是靠現金運營，然后通過商業幌子洗錢。為了找到一個與這些觀點相關的例子，我選擇了印度經濟作為案例研究，以描述逃稅對經濟的影響。2016年11月，印度政府通過了一項法案，導致最高價值的紙幣在一夜之間退出流通。從“法定貨幣”地位上移除的紙幣是500盧比和1000盧比;這兩種紙幣的價值分別約等于6.30歐元和12.60歐元，這可能不是很多，但這兩種紙幣占流通法定貨幣的86%。該法案通過成為法律的一個主要因素是試圖阻止印度普遍存在的逃稅現象。據說，人們逃避納稅的“黑市”價值相當于該國GDP的20%，而且該國93%的人在“賬外”工作，以獲取手中的現金。作為解決方案，印度政府實施了生物識別支付系統，以跟蹤所有交易。
‘AEPS (Aadhar Enabled Payment System) is a new payment service offered bythe National Payments Corporation of India to banks, financial institutions using ‘Aadhaar’ number andonline UIDAI authentication through their respective Business correspondent service centres.’
The system allows a transaction to be carried out at any POS (Point of Sale) by any bank using the Aadhaar authentication software. An estimate given before the new biometric system came into place said that 95% of transactions were paid in cash and that 90% of businesses didn’t have any electronic means of accepting payments meaning it would have been very easy to be dishonest when it came to do your taxes. This is a major step towards a cashless society in a huge country such as India; with a population of 1.34 Billion people, that suffers greatly from illicit activities such as tax evasion.
Money laundering is defined as the conversion of money obtained illegally, to make it seem as if it was obtained from a legitimate source. It was a term coined in America during a period where the mafia were rampant. Domestically reports of money laundering have doubled in the last five years. In accordance with the law, any suspicious activity must be reported the Garda Financial Intelligence Unit, in 2018 there were 23422 cases reported. The process of money laundering involves 3 stages:
洗錢的定義是將非法獲得的錢進行兌換，使之看起來像是從合法來源獲得的。這個詞是在美國黑手黨猖獗的時期創造出來的。過去五年，中國國內關于洗錢的報告翻了一番。根據法律規定，任何可疑活動都必須向警方財務情報組報告，2018年共報告23422起案件。洗錢的過程包括三個階段:
Placement - ‘Dirty’ money enters the financial system.
Layering - The money travels around the world, using multiple transactions to distance itself from the original source.
Integration – The money is returned to the original source with the deception of looking as if it is from a legitimate source.
According to the United Nations Office of Drugs and Crime it is estimated that the amount of money laundered each year is 2%-5% of global GDP each year. This is the equivalent of $800 Billion-$2 trillion. To put this into perspective Irelands GDP for the 2018 fiscal year was €347.636 Billion. If cash was to be eradicated it would obviously hinder the running of criminal enterprises and as a result of this an economy and the habitants of the country would see the benefits through increased public revenue.
Privacy
One of the major drawbacks to a proposed cashless society is that a consumer would lose their right to privacy. Any purchase made using electronic means would be able to be tracked. In most cases people should only be worried about financial institutions being able to see what they are spending their money on if they have something to hide however to others it is the fact that they no longer have privacy. Until a middle ground is found consumers will always ask: what is my financial data used for by those who collect it? Also, who has access to view my personal data.? The ramifications of such data being collected could be tremendous. Hypothetically, if this data is accessible by big corporations, we could see a world in which the cost of your dental insurance could increase due to the number of fast food restaurant transactions you have on your account in a period of time. This may seem slightly far-fetched however China’s social credit system actually punishes people for behaviour that is deemed unhealthy, this is possible as the people’s payment systems are monitored by the government. Another major cause for concern of a cashless society would be the sheer amount of personal data collected. Governments and other enterprises would have an unprecedented amount of information; such as habits, preferences and routines on each individual because of the data that they would have access to. As with anything that is on the internet, it may be accessible to hackers, sensitive information could possibly be leaked to the public in a data breach which could have devastating consequences. The extent to which data can be interpreted is astonishing, for example the way Netflix collects your information and can make assumptions upon what type of movie you would like or what time you’d be most likely to watch something using Netflix. If you can imagine this being used when it comes to your bank account, the information that could be derived from your spending patterns could be vast. Jerry Brito, an executive director of Coin Canter stated that “a cashless society is a surveillance economy” and that “the death of cash is the birth of perfect financial control.” The thought of this may seem daunting to many people nevertheless there is always a price to pay for the technological advancements that have moulded the world in which we live in.
Inequality
With the amount of non-cash transactions on the rise, what does this mean for the unfortunate people on the edge of economic stability? In a 2019 report released by Capgemini SE:
“the transaction volume of non-cash payments is growing rapidly, particularly in developing markets within Asia (32% growth) and CEMEA: Central Europe, Middle East and Africa (19% growth). It is projected to top 1,046 billion non-cash transactions globally by 2022, which equates to a compounded annual growth rate of 14%.”
In America it is estimated that 7% of households don’t have access to a bank account, taken in conjunction with the fact that the levels of homelessness are on the rise, the outlook of these people’s lives with the decline of cash doesn’t leave much to be desired. A country that is spearheading the drive towards a cashless society is Sweden. With less than 1% of transactions paid in cash and an aim to be cash free by 2023 the country is leaps and bounds ahead of everyone else in this area. Sweden recognised the increase of inequality this would have on the poorer people in their country, for example a charity-oriented magazine called ‘Situation Stockholm’ has equipped its homeless seller’s with digital electric card readers in an attempt to increase their sales in an electronic payment dominated
在美國，據估計，7%的家庭沒有銀行賬戶，再加上無家可歸的人數在上升，這些人的生活前景隨著現金的減少也不太令人滿意。瑞典是率先實現無現金社會的國家。由于只有不到1%的交易是用現金支付的，而且該國的目標是到2023年實現無現金，因此在這一領域遙遙領先于其他所有國家。瑞典意識到這將給該國窮人帶來更大的不平等，例如，一份名為《斯德哥爾摩形勢》(Situation Stockholm)的慈善雜志為無家可歸的賣家配備了數字電子讀卡器，試圖在電子支付占主導地位的情況下增加銷量
World. This is an amazing way to incorporate the lower class however it is not representative of the world as a whole. It is unknown what would happen to the people you see on the streets every day such as the buskers playing music and the increasingly common homeless. Many economists believe that the inevitable switch to a cashless society would force a split in society as those dependant on traditional forms of currency would become disjointed from the mainstream society. To a normal middle-class person that has access to all of today’s modern technologies such as smart phones and watches it is easy to transition to a cash free economy, however for those that don’t it puts enormous pressure on them to have such commodities. With the ever-increasing price of such items it would be easier for them to withdraw themselves from such advancements. Another huge hinderance with the concept of having a cashless society would be the over reliance on technology. It would be unfair to the elderly population who may not be as tech-savvy as the millennials who are over-reliant on modern technology. No matter what the future holds for cash as a currency, it is imperative that a provision is made for the classes of people who may not be ready for the huge transition.
Monetary Policy貨幣政策
A useful benefit associated with a cashless society would be increased control of monetary policies for governments. Typically, during an economic downturn interest rates from banks are very low, a situation happens called a liquidity trap in which society prefers to amass cash due to fear of “adverse event such as deflation, insufficient aggregate demand, or war.” This in turns minimizes the level of economic growth that a central bank can achieve. In a cashless society this would no longer be a problem as everything would be done digitally so people would no longer have the option to hoard mass amounts of cash. Governments and banks could use this to gain even more control of the country’s monetary policy. In this scenario a technique called ‘negative interest rates’ could be implemented to spur on economic growth. This unconventional economic growth tool works by charging investors to store their money in the bank, while paying borrowers to borrow money. It was designed to increase the amount of loans given out by a bank, increase investments by businesses and to drive up the demand for customer spending. In 2014, the European Central Bank introduced a negative interest rate policy to certain bank accounts in an attempt to prevent the Eurozone from falling into a deflationary period.
無現金社會的一個有益好處是，政府對貨幣政策的控制將有所加強。通常情況下，在經濟低迷時期，銀行的利率非常低，出現了一種被稱為流動性陷阱的情況。在這種情況下，由于擔心“通貨緊縮、總需求不足或戰爭等不利事件”，社會傾向于囤積現金。這反過來又降低了央行能夠實現的經濟增長水平。在無現金社會，這將不再是一個問題，因為一切都將數字化，所以人們將不再有囤積大量現金的選擇。政府和銀行可以利用這一點來獲得更多的國家貨幣政策的控制權。在這種情況下，可以采用一種名為“負利率”的技術來刺激經濟增長。這種非常規的經濟增長工具通過向投資者收取將資金存在銀行的費用，同時向借款者支付貸款費用來發揮作用。它的目的是增加銀行發放的貸款數量，增加企業的投資，并推高客戶支出的需求。2014年，歐洲央行對某些銀行賬戶實施負利率政策，以防止歐元區陷入通縮期。
Future equivalents
In the world we live in today there are numerous ways to make a purchase without using notes or coins that there is less and less of a need for people to visit an ATM or get cashback. With fiat currencies future being heavily questioned as not having a future, and economists believing that we are near the end of the current financial system the burning question probably the most important one is; What will replace our currency? If a big financial crash was to hypothetically happen again, such as the one in 2008, it is commonly believed that cryptocurrencies would be the only survivors. With this in mind it would make sense to pursue these as a viable option as a medium of exchange for the future. Cryptocurrencies would have multiple advantages over a conventional card or cash if they were to be adopted internationally as the main form of payment accepted by retailers. They possess a level of anonymity that is unparalleled to other forms of payment. Banks would no longer be able to track your spending. Transferring money internationally would no longer take multiple days or cost a hefty fee and also it would be impossible to lose or have stolen seen as its all on the internet and not a physical asset that you carry around with you. Nevertheless, there is always a negative side to things. A major problem with this form of electronic currency is that governments would never accept a cryptocurrency that they have no control over such as Bitcoin, which operates on a decentralized network meaning its users are in control of what happens. For some cryptocurrency to be adopted by government’s and used as a reserve currency it would more than likely need to be controlled by the government. However due to the fact that it is decentralized and in a digital from, is one of its most appealing qualities. It can be transacted peer-to-peer, without permission and has a decent level of privacy. There are many different alternatives to cash that would be sustainable in the current economic climate. Card sales on the internet account for 6% of the worlds GDP, these being a tried and tested method for the past number of years it’s hard to look past them. Mobile wallets have also become increasingly popular in recent years, by removing the need for cash or a physical card and just relying on a phone and a card machine for purchases up to €30. It is technological advancements such as the mobile wallet that are pushing people away from using cash on a daily basis, with such ease, convenience and less time to buy goods in comparison with using notes or coins.
Conclusion結論
As you can see above there are compelling arguments for and against a cashless society. While the question of whether or not society should go cashless is a difficult question to answer definitively, without disgruntling either side of the debate. If it was up to me, I would prefer to live in a cashless society, in my own circumstances I am paid directly into my bank account and therefore rarely have cash on my person as it is so easy to pay via my card or my phone. In saying that I am very privileged that I have access to a bank account unlike the 1.7 Billion adults who don’t and therefore a cashless society would be more of a hindrance for them. In my opinion a cashless society is where the majority of the world is heading, with Sweden and Canada showing that it is very achievable I believe that many countries will soon also make the transition. As I set out to do I have outlined both the pros and cons of each side of the argument.
正如你在上面看到的，支持和反對無現金社會都有令人信服的論據。而社會是否應該無現金化的問題是一個很難給出明確答案的問題，爭論的任何一方都不會感到不滿。如果由我決定，我更愿意生活在一個無現金的社會，在我自己的情況下，我的錢直接進入我的銀行賬戶，因此很少帶現金在我的身上，因為很容易通過我的信用卡或手機支付。我說我很榮幸能使用銀行賬戶，不像17億成年人那樣，因此無現金社會對他們來說將是一個更大的障礙。在我看來，一個無現金社會是世界上大多數國家正在走向的方向，瑞典和加拿大表明這是可以實現的，我相信許多國家也將很快實現這一轉變。當我開始做的時候，我已經概述了雙方的論點的利弊。
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