Reply To: Cashless society

This is a difficult topic to address thoroughly because no-one can know for sure how the future will pan out. It does appear to me though, that people’s relationship with money will be among the most enduring legacies of the current sars coronavirus pandemic.

About a year ago, people had a stilted attitude to touching objects that other people had touched, but bizarrely seemed less concerned about their proximity to others and the air they were breathing. Assuming that the companies that make physical cash won’t start making money with a microban surface, it does look like the beginning of the end for hard cash. As soon as the demand for a product, service or concept drops below a certain threshold, it loses its relevance and gets consigned to the dustbin of history. (Recall video shops, public telephones, football pools, and directory enquiries, for example.) With fewer people using cash, there will be fewer ATM machines on the high street, meaning fewer people will be able to withdraw cash, and so on.

The argument made for cash being easier to budget with is another reason why cash may be on the way out. Businesses don’t want frugal customers, they want big spenders. Why would they be satisfied to let someone be limited to the £20 they have in their pocket when they could potentially have what is left in someone’s bank account, or even more given that some credit cards have the contactless facility now?

Without cash, companies don’t have to pay staff to collect, count and bank it. There are fewer opportunities for pilfering if it isn’t in a tangible form and there isn’t the headache of deciding if a coin or banknote is counterfeit or not. Companies do have to pay a charge for card transactions, but if all companies in direct competition with each other end up paying it, they won’t care because all prices will rise across the board with the effect that people who pay by cash will be paying more so that others can pay by card, without those companies themselves losing market share.

With retail becoming increasingly automated, (I believe that Amazon are opening a shop without tills in the UK soon), there are likely to be fewer and fewer places that you can spend any cash you have.

No-one is guaranteed never to lose a bank card or be targetted by fraudsters, but there are measures that can be taken to mitigate against losses or disruption. If you were to have three current accounts with the same bank, you could have your salary paid into the first account and transfer money into the second account each time you wanted to spend it and use that card for purchases. If you kept the card for the first account in a safe place at home, it would be much safer than using it for everything and carrying it everywhere you went. If you were to lose the card associated with the second account, you could then use the card for the third account while you waited for card number two to arrive. Less risk and less disruption.