Y - Issue 162 - March 22, 2011 - Y-oman.com

CASHLESS SOCIETY –
A FRIEND OR FOE
by Clint Derric Egbert
The concept of a cashless society is appealing and convenient,
something that allows for a simple and easy means of monetary
transaction via Electronic Cash including credit cards, debit cards and
internet banking – but it’s only beneficial when used correctly.
Since the 1960s, financial institutions and governments around the
world have made constant strides towards shaping a cashless society,
gradually paving the way towards a society without cash, substituting
it with a more convenient method of payment called Electronic Cash.
A simple form of monetary transaction through secured plastic cards
instead of cash notes and coins, spells out convenience, at the same
time reducing the chance of being robbed and mugged when walking
down the street after dark. But, with the benefits of a cashless world,
there are drawbacks such as a lack of privacy, internet crime, low
security and complicated computerisation, but the one threat above
all of these is that posed by ignorance of how to make proper use of
Electronic Cash services.
With the world acclimatising and reallocating to computers, it was
only a matter of time before the money market too hopped onto the
techno bandwagon, hoping to make monetary transaction easier; no
more waiting in long queues when going to the bank thanks to ATM
machines and internet banking. Cheques, coins and paper money
are becoming a thing of the past and are being quickly replaced by
easy-to-carry plastic cards. But, not all people are happy about this
transformation; Many older generations, believe that notes-in-hand
are better than numbers-in-a-database, and for good reason. It takes
self-discipline to manage and keep track of finances that go in and
out of bank accounts via credit and debit cards, something which this
generation tends to lack.
A cashless society has also opened the doors to secure exchanges
where almost every purchase and transaction is on record, allowing
for the easy tracking of fraud or theft. However, this in turn
reduces the privacy of individuals that may choose to make certain
transactions without any electronic log or audit trail.
Here in the Sultanate of Oman, there has been a rapid
increase in Electronic Cash usage, even though cash
in hand is still a common practice. The use of ATM
cards – debit and credit cards – have increased over
recent years, and from the look of it, only appears to
be gaining more popularity. And even though there is
nothing wrong with this trend, there is a fear that it
could lead to over spending and debt if not used in the
correct manner.
“Credit cards can be addictive, and if the user isn’t
careful he or she can abuse the use of it. Credit card
transactions are actually money spending that people
don’t need to worry about till the end of the month,
but most people end up forgetting that, and that’s why
most people tend to overspend. You must be able to
handle finances well to make good use of a credit card,
otherwise debit cards are the most suitable option,”
says Mazoon al Lamki, Senior Consultant, Advisory
Services, Ernst & Young.
Fortunately banks in Oman have done a fantastic
job at keeping tabs on spending and loans in the
Sultanate, and managing finances in a way where debts
and deficits can be avoided. Even still, it is important
for the youth of tomorrow to know exactly how the
credit system works and what needs to be done to
successfully handle their finances.
Budgeting plays a crucial part in handling ones
finances, at the same time allowing opportunity
for planning and saving for times in need. A budget
is simply an organised way of managing finances,
providing an overall perspective of where, when, and
how your money is coming in, and how it is being
spent. It’s important to keep the budget flexible, but
not too much, just enough to change according to
circumstances.
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