We are used to a steady stream of headlines about cashless payments. But here are a handful of headlines in English speaking publications from the last few months:
‘Woke technocrats are erasing cash to seize control over our financial lives’ – The Daily Telegraph (3 February)
‘Is humanity losing something due to digitality? – Chris Skinner (13 February)
‘Elderly struggle as cashless transactions become the norm’ – 2GB Sydney (15 February)
‘This is why getting rid of cash is doomed to fail’ – The Daily Telegraph (21 February)
‘Can you pay your taxes with cash? One economist did’ – Fortune (10 April)
‘Cash has a secret power – It’s really, really, hard to spend’ – The Times (6 May)
‘Millions of drivers are stuck in parking app hell: More councils banish pay and display machines for hated cashless alternatives – Mail Online (11 May)
There are many more like this, and not just from the UK. In an appropriate metaphor for our industry, is the penny finally dropping?
Perhaps it is wishful thinking, but there is just the hint that something is changing. While digitisation is a fact of life, offering convenience and new ways of doing things, there seems to be unease about what it means when only the digital way is possible.
Certainly, the evidence of central bank and government action linked to less cash is there. Whether it is the EU or UK debating cash and including it in legislation, the Austrian central bank promoting cash on its website, Australians revolting against a council’s decision to ban cash, or states and cities in the US requiring cash acceptance, an awareness of the risks of full digitalisation is becoming apparent.
For some, the lament is a loss of national identity, history and life. Cash is one of those things that is the bedrock of who and what we are. For others it is that the immediacy, trust and anonymity of cash has not been replaced by any other alternative.
There is the practical side that cash is physical, transactional. You can see, touch, feel and use it. Done well, cash is beautiful. Cash is tangible and emotional, just like real human beings. It’s hard to love software code. And what happens when a digital wallet is compromised, you lose your digital access or there just isn’t any digital access?
The loss of bank branches takes away the tangible embodiment of a bank. Again and again, research shows that people may not want to visit their branch, but they want to know it is there. Apps, chatbots and telephone banking are fine for the routine, but woe betide you if you have a non-standard question, even assuming you can remember your passwords and security codes. The loss of branches is the physical embodiment of digitalisation, and people are noticing.
Whether it is only being able to pay your taxes online, having to use an app to make a doctors’ appointment, not being able to use a physical ticket to enter sporting events, not being able to pay using cash on public transport or at concert venues, the digital tyranny is now visible and real.
At the start of the year the ‘Enterprise Project’ made six predictions about future payments,
Near complete digitalisation
Freedom from geographical boundaries
Single validation, globally
Ironically, of course, cash delivers on almost all of these already.
One of the drivers for the work on Central Bank Digital Currencies was Facebook’s now defunct Libra payment project. Just as governments rush to get regulations in place to manage Stablecoins, digital change is happening almost faster than they can keep up. Today we see Google, Apple and others all offering payments through their platforms.
Cash will remain a major payment tool until a digital solution is found that works for all or until the cash infrastructure collapses. As the start of this article pointed out, awareness of the adverse implications of a cashless world is on the rise.
Stopping the clock is not an option but central banks, governments and societies need to work out how to accommodate the reality of humanity that is emotional, physical and sometimes less than rational with the cold logic and hard edged, unbendable reality that is digital.
Oh yes, and society may yet need the resilience of cash.