How Does a Cashless Society Affect Your Privacy?

It might not have happened overnight but you might have noticed that you’re not carrying cash as often as you once did. Gone are the days of hunting the couch cushions for lost change and even fiddling through your car’s dashboard for the parking meter.

 It’s undeniable, we’re heading quickly towards being a fully cashless society, which begs the question: how does a cashless society affect our privacy? While the convenience is undeniable it does leave room to wonder what the switch is having us sacrifice when it comes to privacy. Fewer people are carrying wallets and you’re more likely to see people tap their phones when buying a coffee or even shopping at a farmer’s market.

No Cover with Cash

Paying with cash means life without a digital trail. No tabs on where you spent it, what you purchased, the time of day, or any other factors. It’s naturally anonymous and private. Conversely, digital payments—regardless as to whether they’re through your credit card, Apple wallet, or other contactless payments—are automatically considered “data.”

Every transaction is tracked and, consequently, can be shared with your financial institution, advertisers, and the government. 

Consider your cashless payments a trail of breadcrumbs. Every item you buy, no matter how benign, contributes to building a profile of your spending habits. Companies are then able to harness this data to create targeted ads, suggested purchases, and even assess your credit. Naturally, some people wouldn’t love the idea of appearing in a database that tracks your pharmacy visits or weekends at the bar. 

Digital Erasure and Emergencies

With the loss of cash comes a loss of control. A financial provider or private platform could cut access to your funds unexpectedly. It could be due to fraud alerts, a basic algorithmic error, or a policy violation. Regardless as to why you get locked out, it can be next to impossible to reverse and leave you without alternative funds.  

If your phone dies or a payment system is down, what’s the alternative? Relying on digital infrastructure can leave you vulnerable, even if it’s just a technical issue. 

In an era when political tensions are high, cashless payments make it easy for your purchases to be tracked. So, how does a cashless society affect your privacy if you’re protesting, travelling, or attending political events? Unfortunately, you are likely sacrificing any anonymity and, potentially, your personal safety.  

Protecting your Privacy

Entirely doing away with your digital payment methods completely isn’t really a practical option for most of us. However, here are a few steps we can follow to  protect our privacy:

• When possible, use prepaid cards or digital wallets that require minimal personal details
• Limit unnecessary access to financial data (gaming apps, etc.)
• Turn off location sharing for payment apps