<https://www.theguardian.com/money/2021/aug/15/cashed-out-a-fond-farewell-to-coins-and-notes>
[...]
This anecdotal stuff is backed by hard fact: cash payments fell by 35% in 2020
in the UK and five out of six payments are now cashless. In 2019, the Access to
Cash review predicted that only one in 10 payments in the UK would be cash
within a decade; now, chairman Natalie Ceeney says, “Covid might have
accelerated that to next year.” In April, Rishi Sunak announced a joint
Treasury-Bank of England taskforce to explore the scope for a central bank
digital currency (CBDC) in the UK: it’s intended to provide a sort of official,
ultra-secure alternative to bitcoin.
So is that it? Is dirty cash (90% of dollar bills test positive for cocaine
residue) over? Covid compounded our suspicions around banknotes – the preserve
of drug dealers and tax dodgers – with since-discredited warnings of contagion
risk and government advice to retailers to favour contactless payments. Now,
given the ease and ubiquity of mobile payment, why seek out an increasingly
hard-to-find and grimy ATM, skirting pools of beer or worse, when you have
everything you need on your phone?
Once the habit was disrupted, cash started to seem weird as well as suspect:
grubby paper and discs of base metal in return for goods and services.
Admittedly, contemporary cash is no stranger than other systems of currency.
Felix Martin’s Money: An Unauthorised Biography recounts an American
anthropologist’s 1903 encounter with the Pacific Yap islanders, whose currency
was fei – vast stone wheels up to 12ft in diameter. These rarely if ever
physically changed hands: one family’s wealth was in a large fei that had sunk
in a shipwreck several generations previously (they are still used even now,
for symbolic exchanges).
We know money is only an idea: a headline I love from the satirical magazine
The Onion reads; “US Economy Grinds to Halt as Nation Realises Money Just a
Symbolic, Mutually Shared Illusion.” Does it matter if we lose the physical
expression of that illusion? Sweden suggests not. Already basically cashless,
it’s committed to being entirely digital by 2023. One Swedish friend says she
“hardly knows what our new notes and coins look like”. “Cash is useless,” says
another. Swish, the transfer service has spawned a verb, swisha, and most
homeless people (yes, Sweden has a few) usually have a smartphone to take Swish
payments.
But even in Sweden, there are rumblings of unease: the Kontantupproret movement
(Cash Rebellion) warns of the potential cybersecurity, individual freedom and
privacy implications of a cashless society. There’s also the question of what
happens in the worst-case scenario. “Isn’t cash the last resort between us and
anarchy in the apocalypse?” asks Gottfried Leibbrandt, one of the authors of
The Pay Off: How Changing the Way We Pay Changes Everything. “Your bank is not
infallible digitally,” warns Gareth Shaw, head of money at Which? “Cash is the
ultimate backstop, a bulwark against lots of things.” That seems to be
reflected in Bank of England data indicating there are 10% more banknotes in
circulation since the start of the first lockdown: we may not be using cash
day-to-day, but some of us want it around, just in case.
We might swerve the apocalypse, but cash still matters: nothing else currently
offers all the attributes of notes and coins. Universally accessible without a
bank account, fixed address, national insurance number or smartphone, cash can
be received and spent by anyone. Notes and coins are also easily recognisable,
which is important for visually impaired consumers, many of whom find the
split-second digital display for card and contactless payments difficult to
read. “We’ve seen a really diverse group of people relying on cash,” says Shaw.
He describes the Which? Freedom to Pay campaign as “Trying to ensure we are not
sleepwalking into a cashless society without some guardrails on it.” Eight
million people in the UK would struggle in a cashless society, mainly those on
lower incomes. Cruelly, those who rely most on cash find it hardest to access:
free-to-use ATMs vanish from deprived areas at a much faster rate than from
prosperous ones according to University of Bristol research.
Cash also offers the bracing “pain of paying”. That’s how behavioural economics
explains the way we feel making physical payments, in contrast to the
dismayingly discreet, frictionless, digital cascade of payments that exit our
bank accounts for subscription services we’ve forgotten about and in-app
purchases we don’t notice. It’s why cash is a cornerstone of budgeting
strategy. “We’ve spoken to people in severe debt and one of the biggest pieces
of advice is to cut up your cards and start paying in cash,” says Shaw.
[...]
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