The Cashless Effect; Influencing One's Behavioral Tendencies?
The "Techy" Aspect
Realistically, I've come to find out that the technology behind cashlessness has an adverse effect on spending behavior. One of the major positive effects is the security and speed of moving money without having to experience weight. When I was growing up, people were used to seeing the Money they owned, the banks were infamous and untrusted and there was a massive skepticism about their intents and how they function.
This literally meant that people stored money In piggy banks, saved it through proxy and also stored them in sacks and only brought out these sacks when they had to make a huge purchase. One thing with having cash is that it brings a feeling of wealth or plenty, even if someone is far from it.
The mind often rewires people to think they have money when there's cash and hence they're very protective of these cash especially because cash at hand signifies value, apart from the purchasing power it wielded, having, owning and storing it, was a sort of status marker in the society.
The cashless effects make people psychologically unsecured with the way they'll behave towards money inasmuch it brings external security. A lot of people feel that when they can't see or touch their Money, then it becomes difficult to actually spend it. But this isn't true. With the internet, it is actually smarter and easier to buy, hence increasing one's chances of even wanting to buy. Take a look at Facebook.
Whenever you do a search on Google, probably for an item you'd like to buy, it reflects on your Facebook account with millions of ads relating to the specific search you've made on Google. This means that you're now spoiled with choices. Amazon gives you the opportunity to make these purchases and have them delivered to you.
So since your state of finance maligns with cashlessness, there's a susceptibility that you'll be willing to spend because there's literally no effort required, other than paying through a card system. This is how the cashless effects technologically inclines us to spending more and directly influencing our behavior.
The cashless effect that comes Into play can be defined as the use of digital processes to actually make real-time payment rather than having hard cash/currency on hand.
The effect of cashless hasn't reached its peak in states like Nigeria and this is because people aren't given credit opportunities, where they can get to buy but then, pay later when they have the money. In the Nigerian banking system, you do not have access to spend money you have not originally saved or owned, unless it's a loan granted based on the weight of the collateral you have to offer. So technically, if you have a collateral and used it to get a loan, definitely you'd treasure that loan because a misuse of it will make it easier to lose your collateral.
this is why people don't loan money to feed because there's no reproductive use case for money if it's only used to feed. However, even if people don't own loaned money, they treasure it because, losing it would mean losing their properties. But in countries like South Africa, citizens are granted credit opportunities where they can buy and pay later, these money are of course viable to be used through a cashless process, making it impossible for people to value money.
Value: Income & Expenditure
For money to be spent wisely, it needs to be firstly valued. We must attach an intrinsic and extrinsic value to it as a result of the things we have had to sacrifice to actually own it. The cashless effect makes this rather impossible. When people can actually own credit opportunities provided by their government to pay when they're comfortable.
They're not only enslaved and indebted to the government, they're being monitored and control, here, people would think that they're having the liberty or the liquidity that comes with a credit opportunity, meanwhile their behavioral tendencies towards government will actually change. The cashless effect is much more dangerous than we actually envisage it, and this could have been the easiest way for the Nigerian government to control its citizens rather than using police brutality and the ban on crypto.
Because the majority of the people are poor, giving them a credit opportunity will make it difficult for them to pay back, due to how valueless the money would seem because it wasn't exactly worked for in the first place.
The Real Accessibility To Liquidity
However, owning our money and going for cash transactions majorly wouldn't solve the situation as well. Due to cashlessness, accessibility to liquidity has been made easier. One can transact with others without the involvement of any third party, blockchain system has totally made this better, to totally eradicating government from how people own, use, transfer and transact money.
In contrast, cashlessness makes people underrate how invaluable money can be. This is why people make irrational decisions with the money they have. Now, a lot of people work hard for the money they earn. But cashlessness makes people forget or measure the extent of their expenditures. For example, the first time I bought a flagship phone, I paid in hard currency and I couldn't sleep for days knowing how much I had spent.
Subsequently, I bought even more expensive devices later, but the means of payment was cashless and this never even felt like I spent any money. This is a practical example of how cashlessness can influence our choices. However, cashlessness is inevitable and one way to curtail its effect, is to make rigid plans backed up by extensive planning, when this happens, it'll be difficult for means of payment to influence our behavioral tendencies.
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My name is @Josediccus, a young Nigerian entrepreneur who is a Vlogger, A Psychologist, Poet, Sports Writer/Analyst & Personal Finance Coach. I'm using my contents as a process to create shared meaning as well as create expressions through which people on/off hive can relate. I believe content is a process to be enjoyed and relished and I'm up for any collaborations in my field stated above. Cheers
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Main reason too many people can't maintain large some of money that don't work for is because the money given to them is not valued. They don't know what it takes to manage money given to them because they don't undergo the process of having it.
Cashless is good but challenging for some people because they might have no idea of how they are spending.
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Definitely, thanks for actually making more emphasis. Sometimes these aspects of our Finances are often overlooked, but they help us a lot when we pay cognizance to them.
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agree
I think the cashless effect really does affect me but I still think it's far more convenient for things to be cashless. I carry around a small amount of cash but most of the time, I just pay with my card but I try to plan out what I plan to buy before shopping. Anything else usually goes through my mind an extra time or two before I buy it.
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Its definitely convinient, nevertheless it's makes people spend more because value for money isn't really telling, especially when it's cashless. Most people specifically felt this during the pandemic because of how transactions became cashless.
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Had to learn to pull myself out of the cashless mentality, I was spending so much on unnecessary things and I would often wonder if I would buy the things I did during the times I had to wait in an ATM queue.
Hahah thats totally right, sometimes when we imagine the time we might spend at the ATM stand, we often change our mind sometimes on some of the purchases we actually make.
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Sadly now POS makes everything look silly.
Even people are still wary of POS because it's an avenue for scam and exploitation. Especially people like me, unless it's urgent.
In my state, I don't think people are though, there are about 5 in my street that I can count and they aren't running out of business.
This is an interesting take. I can remember back in the 70s my Father would say "you need to learn the value of a dollar" In accounting, it is said that one needs to learn the potential of a dollar.
Whether it is hard cash or electronic funds being transferred from one account to another, the ledger of credits and debits will illustrate the flow of money.
Tracking every penny earned and spent is essential.
When I was younger it was always easier for me to spend money when I was using a credit card versus cash in my wallet. My husband and I use one credit card to pay some of our bills and get groceries because we get points. However, we use the money in our checking account to pay that bill off every month. We never carry a balance on our cards so we are well aware of the money going out and coming in. The thing with cash is that it is not as secure as using a credit card. If someone gets your cash it's gone forever. If someone gets your credit card you can call and have it "shut off". I am always aware of what our balances are.
Yeah, it's great to have that check on your credit card, in some countries, it's often difficult to have these checks, they charge you on almost everything you do, except you don't pay for breathing. However it depends on the conditions that's necessarily there for either using cash or card.
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I now have my Dad's account set up online too so that I can monitor his card activity. He is 90 and doesn't want to be bothered. Have a great day!
!ALIVE
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