Which of the following is a potential negative impact of a cashless society on individuals who are unbanked or underbanked?

• A. They will experience lower transaction costs for all purchases.
• B. They will have increased privacy in their financial transactions.
• C. They may have limited access to essential goods and services due to inability to make digital payments.
• D. They will automatically receive free banking services from the government.

Answer: (C)

Verified step by step guidance

1. Understand the term 'unbanked' or 'underbanked': these individuals do not have access to traditional banking services or have limited access to them.
2. Recognize that a cashless society relies heavily on digital payment methods such as credit/debit cards, mobile payments, or online banking.
3. Analyze the impact on unbanked or underbanked individuals who may not have access to these digital payment methods.
4. Identify that without access to digital payment options, these individuals may face difficulties in purchasing essential goods and services, as cash payments become less accepted.
5. Conclude that the potential negative impact is limited access to essential goods and services due to inability to make digital payments, rather than benefits like lower transaction costs, increased privacy, or free banking services.