How Does London's Cashless Payment Impact Cybersecurity?

More than 23 million people in the UK used virtually no cash last year, sparking a debate on whether London’s surge towards cashless payments could inadvertently fuel an increase in certain crimes. The Geonode team has conducted an in-depth analysis, uncovering the potential links between this trend and the evolving landscape of criminal activity

In bustling London, paying with cash is becoming a thing of the past. Instead, people are swiping cards or using their phones to make purchases. It’s convenient, but is it safe? That’s what we’re here to find out.

As London embraces digital payments, there’s a hidden danger: cybercrimes. These are crimes committed using computers and the internet. They can range from stealing personal information to hacking into bank accounts.

According to UK Finance, a banking body, Londoners are using less cash than the rest of the country, and more than 23 million people in the UK used virtually no cash last year. The report predicts that cash will account for only 6% of all payments in the UK by 2031.

The rise of a cashless society has revolutionized the global economic landscape. No longer weighed down by stacks of coins and notes, consumers can now enjoy the speed and convenience of digital transactions. While cities like London have become leaders in this cashless revolution, this shift has also raised concerns about the potential for increased crime.

The Risk of Cybercrime

One of the main concerns is the increased risk of online fraud, identity theft, and cyberattacks. As societies become more reliant on digital payments, criminals have also evolved, taking advantage of vulnerabilities in digital systems to commit these crimes. According to Josh Gordon, a technology expert at Geonode, “The threat landscape is constantly shifting, and cybercriminals are developing new ways to exploit digital payment systems.” Here are a few points from Gordon on how these cybercrimes are perpetrated:

  1. Deepen Online Fraud: Criminals may trick consumers into revealing sensitive information or execute fraudulent transactions.
  2. Identity Theft: Criminals can impersonate a consumer and initiate unauthorized transactions, leading to financial losses.
  3. Cyberattacks: Criminals can launch attacks on the infrastructure that supports digital transactions, such as banks, payment gateways, or even retailers.

In May 2022, Armen Najarian, the Chief Identity Officer at Outseer, a company that prevents fraud before it occurs, spoke to Cyber Magazine about the rise of malicious apps that impersonate trusted brands and trick customers into giving away sensitive information or money. He said that rogue apps make up 39% of all fraud globally, and attacks rose by 50% over Q3 2021. His current duties include managing all of the Stop Fraud Not Customers brand activation campaigns launched in Charlotte and New York City, including London.

Money Laundering Concerns

Besides cybercrime, adopting cashless transactions has also provided new avenues for money laundering. Gordon explains, “Money laundering becomes more sophisticated in a cashless society. Digital transactions are a double-edged sword—they can either make tracing illicit transactions easier or more difficult, depending on the cunning of the criminals.”

Social Inequalities and Resentment

An obstacle on the road to a cashless London is the social divide it can potentially augment. Certain groups like the elderly, the poor, the homeless, and tourists may find themselves disadvantaged. Their reliance on cash may make adapting to a cashless society difficult, leading to a sense of exclusion. This could fuel resentment, which, in turn, might incite criminal activity.

In August 2023, a tourist from Lisbon named Armando Bordalo e Sá visited London and found that many places no longer accepted cash. He had to use his debit card for most of his transactions, which resulted in International fees from his bank in Portugal.

Addressing Risks and Challenges

Recognizing these risks and challenges, Josh Gordon suggests several measures that stakeholders can take:

  1. Public Education: Providing the public with the knowledge to identify potential fraudulent activities and protect their information can significantly reduce the risk of cybercrimes.
  2. Robust Security Systems: Invest in advanced cybersecurity measures to protect digital payment platforms and systems against threats.
  3. Legislation and Regulation: Governments should introduce stricter regulations and robust financial inspection tools to hinder money laundering attempts.
  4. Inclusion Strategies: Policymakers should ensure that strategies are in place to support individuals who the shift towards cashless transactions may disadvantage.

Striking Balance

The mission for a cashless London is far from straightforward. While it brings convenience and innovation, it also poses risks, like increased cybercrime and social inequality, that must be acknowledged and addressed.

As Josh Gordon advises, “The shift to a cashless society must not just center on advancement and convenience; it must also focus on safety, security, and equality.” The journey to a cashless capital should not leave anyone behind, nor should it come at the cost of stability and security.