I have used cash exactly twice in the last two years, neither time by choice. Once was in my local barber shop that didn’t take cards (forcing me to go to the shop across the road, get cashback and return to the barber) and the other time was to pay the admission to the Tokyo State Guest House, which very surprisingly, was cash-only. Apart from those exceptions, I’ve totally given up using cash (and changed barbers). No more carrying notes and coins, no more visits to ATMs, no more concern about losing it or not having the right amount, no more waiting for change in shops.
On a recent trip to London, it was very noticeable how prevalent “cashless” has become there in just the last few months — multiple cafes with signs in the window declaring that cash is no longer accepted. Even Christmas markets are replete with signs of “card payments welcome” as handheld devices from iZettle, SumUp and Square have been adopted by individual traders to accept cards and contactless. In shop after shop, I notice you no longer get the puzzled look from staff when you proffer your phone at the till. My Costa coffee cup that can pay for coffee via an in-built contactless chip and my Fitbit that can pay do still elicit the odd confused stare. But expect to see an ever-increasing range of pay-enabled devices as we move beyond contactless debit cards and Google/Apple Pay equipped phones and watches. In Asia, you can see very clearly how popular paying by scanning a QR code linked to Alipay or WeChat Pay is with even street vendors and churches accepting scan-to-pay.
For businesses, there are myriad benefits to cashless — no risk of hold ups, no cash counting after closing, no leakage from the till, no trips to the bank, no fraudulent notes to check, improved hygiene (cash is very dirty) and of course, faster transactions. While these positive stories are the reasons that businesses may argue for going cashless, there is also the so-called “credit card effect”, where people are more willing to spend when they aren’t handing over cash.
Cash has served us well for over 2,500 years but talk of its demise at the hands of apps, plastic and contactless payments isn’t universally welcome. A recent BBC article highlighted some of the drawbacks of the move away from cash — such as the tendency for charity donations and payments to some sectors such as cleaners or childminders to be largely cash-based. Some States in the US are attempting to block businesses from going cashless, citing the impact on poorer communities.
Charities adapting to a cashless world
While I sympathise with the groups who could be marginalised by too rapid a move to cashless, I would urge authorities to find solutions rather than hold back progress and forgo the benefits. What we can do, is be mindful of those adversely affected, be respectful of their views and be creative in easing the transition for them.
We really should plan to phase out cash in the next five years or so — it’s a vestigial remnant of a bygone era. Carrying various shards of metal and pieces of coloured paper around in our pockets that also contain powerful computers makes very little sense. But the current haphazard move to cashless at the whim of individual businesses is not in the public interest.
But let’s not railroad it through without thinking, in some technology-driven rush. Many people have a sentimental attachment to physical money that, much like film, will eventually go digital. Governments, not financial institutions who stand to benefit in any event, should be leading the planning and timetable for the move to cashless — we should not force the vulnerable or elderly but should respect their attachment to cash, to the simple tangibility of notes and coins. We should consider a card-for-cash exchange scheme with vending machines easily letting someone who is unbanked go cashless when they need to. Maybe we can look at funnelling some of the savings in policing costs, cash in transit costs or insurance costs into programmes to aid the vulnerable. What we also mustn’t do is allow those who want to hang on to cash for nefarious purposes hide behind fake concern for the elderly or poor so as to preserve their own ability to operate outside the law.
Let’s plan for an orderly adoption with plenty of warning, education and mitigation. Then we can expect to see the real benefits of cashless for everyone.