Cashless
The development of financial technology (fintech) in recent years has led to the emergence of a cashless society. A cashless society is a group of people who use cashless payments as a form of adaptation to digital technology. Both developed and developing countries are competing to develop fast, secure, and practical digital payment systems. Gen Z, as a generation that grew up and was born in the digital age, making them known as digital natives, are the most dominant users of this system. These changes not only alter the way they make payments, but also influence their consumption and lifestyle habits.
Historically, cashless society began with the use of credit and debit cards in developed countries in the 20th century. As technology advanced, digital payment systems continued to evolve, from mobile banking and contactless cards to digital wallet applications. In China, Alipay and WeChat Pay have become part of everyday life, even for small transactions. In Sweden, cashless payments are so dominant that cash is hardly used anymore. In Indonesia, the cashless society has grown rapidly since the launch of QRIS by Bank Indonesia in 2019, which has made digital transactions more practical and inclusive. For Gen Z, this system makes it easier for them to shop online, order food through apps, and rely on digital wallet promotions for their daily expenses. However, the convenience offered also poses challenges in the form of increased consumerism among young people.
Cashless societies have a positive impact. First, transactions become faster, safer, and more efficient. Gen Z can easily pay for daily needs, shop online, or buy food without carrying cash. Second, cashless societies promote financial inclusion. Many Gen Z who did not have a bank account can still make transactions using digital wallets. This supports financial independence from a young age. In addition, cashless systems also encourage Generation Z to adapt quickly to technological changes in the financial sector. They are more open to innovations, such as using investment apps, digital wallets, and other digital financial services that help improve their financial literacy. Additionally, the use of promotions such as cashback, discounts, and reward points not only makes them more enthusiastic about using cashless payments but also motivates them to manage their finances more effectively. In the long term, this habit shapes Generation Z into a more flexible, independent generation that is ready to face challenges in the digital economy era.
However, a cashless society also has negative impacts that cannot be ignored. The ease of transactions can trigger more impulsive shopping behavior and weaken, especially among Gen Z, who often prefer speed and convenience over careful planning. Dependence on technology also creates vulnerability when the system experiences disruptions or when the risk of cybercrime threatens the security of personal data. In addition, not everyone has equal access to digital infrastructure, which can widen the financial gap. Finally, the loss of privacy in every transaction raises questions about privacy in the digital age.
Technological advances are a major factor driving the emergence of a cashless society. Innovations in financial technology (fintech), such as mobile banking, contactless cards, and digital wallets, provide convenience and speed in transactions. People can now make payments anytime and anywhere using only their smartphones. In addition, the Covid-19 pandemic has also been an important factor, as people have switched to cashless transactions to reduce physical contact. Not only that, large technology companies such as Apple, Google, and Alibaba have also accelerated the development of digital payment systems by providing services that are integrated with modern lifestyles. Generation Z, who grew up with the internet and gadgets, has also accelerated the shift from cash to digital payments. Cashless transactions are considered more modern, practical, and suitable for supporting their fast- moving lifestyles.
Security is one of the most important issues in the development of a cashless society. Digital transactions offer speed and convenience, but they also open up opportunities for various risks. One of the main risks is cybercrime, such as theft of personal data, account hacking, and identity abuse. Because all transactions are recorded digitally, sensitive information such as account numbers, purchase history, and card details can become targets for criminals. In addition, complete dependence on the internet and technology systems makes the public vulnerable when there are server disruptions or power outages. Not only that, the loss of anonymity in transactions also raises concerns, because every financial activity can be tracked, both by companies and authorities, which has the potential to reduce individual privacy. For Generation Z, who often use various digital platforms for shopping and lifestyle purposes, this risk is even higher if they do not understand digital literacy and security.
The government plays an important role in shaping and regulating the development of a cashless society. Through clear and strict regulations, the government can ensure that digital payment systems run safely, transparently, and inclusively. In many countries, financial authorities set standards for transaction security, data protection, and anti-money laundering regulations to reduce the risk of cybercrime and financial abuse. In addition, the government also plays a role in building digital infrastructure, such as an evenly distributed internet network and an integrated national payment system, so that the wider community can access these services. On the other hand, good regulations also encourage fintech innovation by providing space for companies to grow, but still within legal boundaries that protect consumers. In the context of Gen Z, government efforts are important to protect them from financial risks while ensuring that young people can enjoy the benefits of digital transactions fairly and sustainably.
In conclusion, the development of a cashless society driven by fintech innovation, the pandemic, and government regulations has brought about major changes in consumption patterns, especially among Generation Z. As digital natives, Gen Z is the group that has adapted most quickly to digital payment systems because they fit in with their fast- moving, practical, and technology-connected lifestyles. On one hand, cashless payments offer advantages such as ease of transaction, efficiency, and more inclusive financial access. However, on the other hand, this convenience also encourages impulsive consumption behavior, increases data security risks, and reduces personal financial control. Therefore, while the cashless society brings many benefits, it is crucial for Gen Z to enhance their financial literacy and digital awareness to utilize this system wisely, balanced, and sustainably. If they do not manage it properly, impulsive consumption habits can have long-term effects, such as difficulties in financial management, vulnerability to debt, and a lack of preparation for economic unpredictability. Conversely, if Generation Z can use cashless systems responsibly, they have the potential to become a financially independent, adaptive, and investment-conscious generation, ready to face the challenges of the digital economy in the future.
By: Setiananda Resia Ningrum
Write and Win: Participate in Creative writing Contest & International Essay Contest and win fabulous prizes.
About the Author
