Cashless economies are the new hype in the financial sector right now. Even though the advantages of going cashless have been well documented, there are quite a few drawbacks as well. In fact, some experts predict going without cash will only increase cyber crime activities. A rather odd conclusion, but it holds a lot of merit.
A Cashless Economy Will Not Halt Cyber Crime
There are both advantages and drawbacks to a financial ecosystem where cash no longer plays a role of importance. India is an excellent example of how things can get out of hand rather quickly in the coming months. A lot of people are not educated on how they should use the Internet for financial purposes, which inadvertently makes them a high-value target for internet criminals.
To put this train of thought into perspective, these people are more prone to phishing and social engineering attacks. If one is not sure how finance on the Internet works, every type of contact or offer will seem legitimate. Using common sense will always prevail in the end, but it may take older generations a few hard lessons before they learn how this game is played.
Going cashless remains a perfect solution to reduce fraud and corruption numbers in the short term, but it is not necessarily a long-term solution. Digital payments are taking hold in other parts of the world, yet the mobile fraud rates are going up at the same time. A fine line needs to be walked between convenience and fraud risks when it comes to digital payments.
Cyber Expert Ritesh Bhatia explained a likely scenario as follows:
“There will be many practical problems for the poor, like my maid, and old people like my parents. They can be targeted easily as they don’t know how to use smartphones. For the poor, a loss of Rs 100 or Rs 500 can be devastating.”
It is not entirely unexpected fake digital wallets will become more popular among computer and mobile users in India and other countries. It is difficult for the average consumer to distinguish between a legitimate and a fake offering. A similar trend has been seen in the Bitcoin world this year, where a lot of malicious cryptocurrency wallets started showing up in the Apple App Store.
To make matters worse, digital payments invite other types of criminal activity as well. Shoulder surfing, taking pictures of transactions, or misusing devices left alone for a minute are just some of the concerns right now. Add the malware threat into the mix, and going cashless will open up another can of worms the world is not prepared for.
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