Your cash ain’t nothin’ but trash….

You don’t have to look it up , it was the Steve Millar Band 1973 . I think there was an earlier recording, but that’s the one I know .

Take a long hard look as it might not be around for long . Cash that is. Another effect of Covid as an even quicker transition to a cashless society . It has become a bit like washing your hands and wearing a mask ….

Don’t touch the filthy lucre! (For those of you who may not know it is a pejorative word for money)

Or rather the U.K. government discouraged those traders , or rather those allowed to trade , from using cash as it may transmit the virus. Many, not all, adhered to that advice. I do get very suspicious when a retailer still says cash only. The days of it being a complicated processing getting a card machine are long gone. There a bucket loads of services which you can sign up for in ten minutes, have a card reader in a couple of days and be operational immediately at very competitive rates, which are equally as good, and in many cases better than a bank’s charge.

Even some street sellers like the Big Issue or buskers have the facility for contactless payments.

This has all come to the fore because of the first till less, cash less, Amazon store (now two)in the UK

HENRY NICHOLLS/Reuters

Will all stores be like this in the future ? Most likely. Will that be the end of the friendly banter with a miserable(bit unkind) cashier ? Most likely. Do we still push kids up chimneys ? No. Does a bloke walk in front of your car with a flag ? No. Does a geezer at the end of the shop with a large quill calculate how much you owe? No. Things change.

Will, however, it accelerate the end of cash. Yes. You can see the advantages.

Retailer..

  • no tills
  • few mistakes
  • fewer staff
  • no cashing up
  • no cash to go to bank
  • no change given
  • far quicker through put
  • no banking up cash, and increasing problem with disappearing High Street bank branches
  • more in store consumer behaviour data

Consumer

  • no tills
  • fewer mistakes
  • in the case of Amazon, you wont even need a debit/credit card
  • quicker shop
  • no queues
  • no standing standing behind the daft sod who is trying to find the exact £27.71 in cash

Of course there are loads of disadvantages but they are not going to stop the cashless trend. Yet, I believe the end of cash is a long way off . There are too many reasons to keep cash, apart from the fact that there is still a minority of the UK population that do not have a bank account (approximately one million) and the same applies to those without internet access . However, the issue of internet access is very relevant as it is needed for face to face cashless transactions. Even in areas where there are good signals, any interruptions would disable any cashless transaction.

Will you miss….

can you lend us a fiver, mate ?

spare us any change, chief ?

wot can you knock orf for cash ?

penny for your thoughts ? (probably stretching it a bit anyway ,a penny not even going to buy the thoughts of the biggest moron )

any discount for cash ?

sorry cash only …

empty yer till or i’ll do ye !

cash is king!

money for old rope

Probably not .

But we what would miss is an alternative . If there is no cash and alternative methods fail how do you transact? Cash provides a means of social interaction. For some it maybe their only social interaction .

Bank of England

The arguments put forward to support DeLaRue’s (UK bank note printers)case are compelling however, I disagree. You can sum up the reasons why I disagree with one word, convergence. I’ll explain more in a moment, but first let’s revisit the arguments to support the continued hegemony of cash:

  • First off, it’s about practicality — over a third of the world’s population don’t have a bank account — in the UK, seven per cent of the adult population don’t have a bank account.
  • Secondly, it provides anonymity, so cash supports privacy.
  • Thirdly, cash makes it easier to keep tabs on how much you are spending.
  • It’s psychological — people trust cash.
  • Cash doesn’t require technology — if there is no internet connection you can still use cash.
  • Cash protects against fraud.
  • It’s the cheapest, quickest and most convenient form of payment.
  • Its popularity shows no sign of waning — 85 per cent of consumer transactions worldwide are conducted using cash.

share.com from whence the above comes from, disagree.

Given that list, it feels like an open and shut case — cash is king, queen, prime minister and president.

I am not so sure though. Re-consider the above list. The real reason why people prefer cash is because it’s what we are used to. Technology has a response to just about all the above arguments.

  • In Africa mobile phone credits or airtime have become accepted as a form of payment — there are alternatives to cash even among people who don’t have a bank account.
  • There are technological solutions to the anonymity argument — bitcoin is just one example.
  • Banks such as Monzo provide a service where it is much easier to keep a tab on spending — every time you use your card you get a notification. I am not sure whether you can set yourself a daily budget — like withdrawing £100 from the ATM and saying this is my budget for today — but I see no reason why this can’t be done.
  • Cash can be stolen; I think there are safeguards that can be employed to afford greater protections to digital money from fraud.

That leaves the psychological argument, the convenience argument and the fact cash is still popular.

I will respond to those arguments in reverse order.

Sure, globally cash is still popular but look towards countries that often lead the way in term of new ideas. Take Sweden, the country that made it compulsory to wear seat belts in cars, or which banned smoking in public places, when such regulation felt inconceivable in the UK. In Sweden, only one percent of all payments in 2016 were conducted using cash. 

Or consider convenience — plastic is only a short-term alternative to cash. More people are using their smartphones but that is also a short-term alternative to cash. Soon we will carry electronic wallets which are either a part of our smartwatch or perhaps like a kind of tattoo — our skin becomes our wallet. What can be more convenient than that?

Convergence, where different technologies come together, will change the psychology of digital money. Electronic wallets we wear on our wrist or embedded into our skin, 5G providing ubiquitous internet connectivity, improved reliability of internet connectivity, and Monzo style presentation enabling us to easily keep an accurate record of our spending, will combine, creating a powerful user experience.

Companies that provide these technologies— Apple for example with smart payment hardware, banks that adopt a Monzo style interface, companies that provide digital alternatives to cash; they will be the winners.

And as these technologies develop and converge, the psychological rationale for cash will disappear like money down a drain.

Michael Baxter

Economics Commentator

Michael is an economics, investment and technology writer, known for his entertaining style. He has previously been a full-time investor, founder of a technology company which was floated on the NASDAQ, and a director of a PR company specialising in IT.

I disagree. Society is somewhat more complex than that. Yes digital alternatives will be the future but that does not equate to the end of cash. There are obvious doomsday scenarios, such as extended power outages either local or national which would deem all cashless transactions redundant for an underdetermined time, data leaks, IT failures and the list goes on. I suggest that society as a whole will have more to say about the timing of the cash funeral . Cashless society favours those that have rather than the have nots . The have nots often have a way of sticking up 2 fingers when they have their backs to the wall.

Cash is no longer King (or Queen). I would wager a cash bet it will as longer than any King or Queen.

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