Advantages and disadvantages in the use of plastic money in Greece and Europe
Anestis Traikos is writing…
Plastic money (credit and debit cards) has become an integral part of modern life in Greece and across Europe and has grown significantly in recent years. This includes the use of credit cards, debit cards and mobile payment systems such as Apple Pay and Google Pay. The adoption of these types of payment methods is driven by a number of factors, including the convenience and security they offer, as well as the increased availability of electronic payment options at retail outlets. However, as with any financial tool, there are also potential drawbacks and risks to be aware of.
According to the World Bank data, the percentage of adults worldwide who used electronic payment methods increased from 21% in 2014 to 53% in 2017. In the United States, a 2019 survey found that about three-quarters of adults used electronic payment methods at least occasionally, and about a third used them as their primary means of payment.
A major advantage of plastic money is the convenience they offer. With a credit or debit card, consumers can make purchases and withdraw cash from ATMs without having to carry large amounts of physical cash. This can be particularly useful for travelers, who can use their cards to make purchases and access cash in foreign countries with a small fee. Credit cards also offer the convenience of being able to make purchases online or over the phone, as well as the ability to track spending and monitor bills through online banking services.
The COVID-19 pandemic has also contributed to the increased use of electronic payment methods, as many people have switched to contactless payments to reduce the risk of contracting the virus. Some countries have significantly reduced the use of cash due to concerns about its role in the spread of the virus. The use of e-wallets has increased by 301% since the start of the pandemic crisis. Indeed, the penetration of digital wallets among older Greeks who are aged 55 to 64 is impressive. It increased by 1,539%, reaching 13% from just 1% at the beginning of 2019.
Plastic money is not only convenient, but also has advantages in terms of security. Credit card holders are not required to provide personal information or hand over ID to merchants when making purchases with their card. This helps reducing the risk of fraud and identity theft.
Credit cards also offer the added protection of chargeback rights, which allow the cardholder to dispute a transaction if there is a problem with the purchase. However, there are also potential risks and disadvantages of using plastic money.
A major concern is the risk of excessive spending and the accumulation of high levels of debt. Credit cards can be particularly risky in this regard, as they allow consumers to borrow money from the issuer and pay it back later with an interest rate. If a cardholder is unable to pay off their balance in full each month, they may end up paying significant amounts in interest charges.
Another potential disadvantage of plastic money is the risk of fraud and identity theft. While these payment methods offer some protection against fraud, it is still possible for criminals to obtain cardholder information and use them to make unauthorized purchases. Consumers should be vigilant in protecting their personal information and monitor their accounts for any suspicious activity.
Overall, credit cards and plastic money offer a range of benefits and convenience to consumers and businesses in Greece and across Europe. However, it is important for individuals to consider the potential risks and disadvantages and to use these payment methods responsibly in order to avoid financial problems.
Although plastic money is certainly gaining popularity, and may eventually become the dominant form of payment in some areas, the chances that it will completely replace physical currency in the near future are very low. There will always be a need for cash, especially for small transactions and for people who do not have access to banking services. In addition, some people may prefer to use cash for privacy reasons or simply because they find it more tangible and easier to manage. However, I believe that both forms of payment will co-exist in the foreseeable future, each with its own advantages and disadvantages.
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