Many banks are dreaming of a future where the only thing you’d have to carry is a card – or maybe just your cell phone – so that you can pay without ‘having to worry about having cash on you’. But have you ever thought of what a life without cash would be like? Cash is so present in our daily routines that we don’t even realize it is there; but if it was to disappear, our lives may very well become a sci-fi nightmare.
Have you ever found yourself in a foreign country with a credit card that doesn’t work? Unable to pay at a restaurant or to withdraw some cash to get around? If you have, then you probably carry a minimum cash every time you travel, as no one wants to spend much time on the phone with grandma trying to have her wire-transfer money through Western Union.
Technology isn’t fixing these issues, yet more and more countries are trying to diminish the use of cash. Some are closing ATMs and bank branches, scraping some high-value banknotes like the 500 euro note, and seemingly engaging in a war against cash.
For the past thousands of years, we have based our personal conception of money on something palpable, something tangible. This is how we have learned the value of things, what it means to spend, what it means to save. Do you remember the first time your parents gave you some pocket money? What they told you not to do with it, how they explained you shouldn’t spend it all at once ? These lessons could very well disappear despite what us, cash users, want because using cash isn’t bringing much money to banks, actually.
Drastic restrictions on cash are already happening throughout the world. Maximum amounts allowed to pay with cash, limited withdrawals from your own bank account, etc. A cashless society would mean that everything we buy can be monitored and tracked.
The idea of eliminating cash was first launched by Kenneth Rogoff of Harvard University and Willem Buiter, chief economist at Citigroup Bank. Economist Martin Armstrong said : “In many nations, specific measures have already been taken demonstrating that the Rogoff-Buiter world of Economic Totalitarianism is indeed upon us.” The Financial Times, for its part, states that “Central bankers, after all, have had an explicit interest in introducing e-money from the moment the global financial crisis began”.
But getting rid of cash means getting rid of an essential freedom: being able to dispose freely of your money the way you want. Without cash, your freedom is given to the banks and, as crazy as it sounds, you don’t control your own money. In a cashless future, banks will be able to make some money for each and every of your transactions. Some economists are already seeing the future where banks would just automatically make money for each purchase you make. You could try to go switch banks when you realized but would finally find the same practice. We used to choose our banks on how much we could make from interests, we might end up choosing them on how much they charge us for living.
And yet one of the main arguments against cash is ‘security’. It is true, cash can be stolen, it can be lost or burned… but it goes almost the same with other non tangible means of payment.
In terms of total amount, stolen identities and online frauds represent much more than the amount of stolen cash in a year. In the U.S you technically have more chances to have your Social Security number and identity stolen for credit card fraud, than to be robbed physically.
But besides that, removing cash from our wallets and our daily lives would lead to major society gaps in between people who can afford other means of payments and the people who can’t. Today many people only have access to cash, from homeless to refugees, people with bad credit history or those banned from credit. These people would become even more marginalized and it could lead to the creation of alternative modes of payments which would be even worse.
“If we’re heading for a cashless society, how do we ensure that people on the margins of society are able to live, work and have good relationships within that kind of society?” asked David Fisher of the charity St Mungo’s Broadway (1). For many, cash is the only way they can get out of homelessness – getting rid of cash would condemn them to stay in their excluded situation.
“We can’t allow people who find themselves on the streets to remain stuck there. Many people who find themselves homeless might have worked in sectors or roles which predominantly paid cash, and thus they might not have the requisite documents to prove their creditworthiness; but this shouldn’t be a barrier to getting support. Falling off the ‘registered’ radar and becoming dependent on cash shouldn’t be the barrier to citizenship, and it shouldn’t stop the opportunity to escape from a spiral” writes Chris Owen from The Telegraph.
Although cash may not remain the main method of payment in the future, for a country to fully get rid of it would lead to a great lack of freedom. But in most of the cases, the countries trying to get rid of cash aren’t consulting the first people concerned; the shouldn’t just be asking the banks, but should be asking us, the users.
(1) A cashless society could be a nightmare for the homeless, The Telegraph