Cash only is no income come 2030

Often, it’s hard to think about how much the world has changed in reality during our lifetimes. The younger you are the easier it is, after all, change is a particularly well executed process this millennium. However, if you, like me, are just a bit, or a lot, older than the Gen Z’ers, change can be quite a tough thing to quantify and its scale hard to appreciate. The classic examples are frequently based on technology; look at the internet, look at computer hardware, look at mobile phones etc. But one of the oft overlooked sectors is money. It’s almost been 3 years since the five pound note became polymer rather than fabric, ok it had been cloth since 1853, but governance moves slowly no matter the century. Now theres a good chance anyone reading may have had or know someone who has had a child in the last 3 years, they will never know about the notes we can pretty much guarantee most of us had become accustomed to. Strange, but let’s take it a step further, while not fully adopted till a decent while later, contactless payments began in the UK in 2007, a year after chip and pin became compulsory for over the counter shopping. This means, there are children starting their secondary education who have probably never known the idea of signing receipts for authorisation of a purchase, even the possibility they see ‘having to type a pin number into a keypad’ as a rare inconvenience, let’s not even start on cheques! So, considering the fact we can now swipe our phones over a console to pay for fairly considerably sized purchases it’s probably worth asking: We’re contactless, are we also going cashless?


With only around 35% of UK payments in 2017 made with cash, it was around 60% a decade before, you can truly see the rate of progress away from physical transactions. More and more people are becoming almost wholly reliant on cards and electronic wallets to take away the burdens of carry all their liquid capital around with them. As usual the most progressive and ‘laid-back’ countries are the one’s really progressing this narrative. While Britain’s rate of 35% is fairly good as a worldwide comparison, places like Sweden and Canada are when the cashless revolution is really taking hold. Canada is slowly doing away with coinage, comparably to New Zealand, having taken the penny out of circulation in 2013 and likely on the move to make 5 cents redundant soon as well. They also boast less than 30% of transaction volume as cash, significantly less than the UK but not good enough to take the payments crown. Sweden snatches victory in these terms, having lowered its total cash transactions to a mere 19% countrywide. This feat can be viewed with even more awe considering that some of the top financial bodies in the country believe it will, effectively, be a cash-free utopia by 2030.


Bearing all this in mind it’s best to analyse the ideologies behind champions and dissenters of this new paradigm. Most supporters of the move towards electronic payment, much like the even-minded amongst their opposites, stress that they would not support the pseudo-dystopias frequently seen in popular science fiction where all transactions are meted out via a swipe of some internalised bio-tech across a scanner. Simply put they think electronic payments should become the ‘normal’ way of things, with small reserves of cash kept by establishments for situations in which, for whatever reason, digital methods are not possible. Even most supporters of the cash system back this form of futurisation but with slightly less emphasis on the ‘normal’ and more complicated checks and balances placed on the mediator software and companies.


The benefits of embracing the move are several-fold. As mentioned, and not worth underestimating, the fact no one will be forced to carry germ covered, weighty and, hand-‘perfuming’ cash creating a hopefully cleaner and less stinky society, corporately, having to use less physical space and storage devices is invaluable. The other reality of the change in monetary usage is the upgrade in security and safety. One of the most prevalent forms of crime throughout history is robbery, from pickpockets to highwaymen via pirates and through to muggings, people have been stealing other people’s money for basically as long as the concept has existed. The ability to hold all of your money ethereally within a digital sphere only accessible via a secure electronic device is a vastly better solution than carrying around a hefty safe, or even if you own a business, having money in a till or locked office, lest we overlook burglary, ram raids and shop hold-ups. It means better security for your company in another way as well, financial fraud is something it seems is becoming more and more prevalent in the media, having only a limited, trackable, online channel of finance, money flowing in and out via spreadsheets apps and databases, means doing your taxes and being audited has never been simpler and hence possibly, never cheaper.  The advent of the cryptocurrency is the constant enigma of the modern finance market, is it taking off or is it fading into faddy obsolescence? either way it is interesting to consider as a medium. Effectively acting like universal mediator currency to transfer funds from one person to another without any need for bank transfers, government interventions or conversion. It seems the goal of these currencies is to create a safe haven outside of the current fiscal system where monetary checks and balances are kept track of and their validity checked entirely by computer systems, essentially removing human error and greed from the financial oversight of the world, but not from its creation or the ownership of this oversight, it costs a lot to ‘use’ bitcoin in real terms so lots of people are making money being essentially bitcoin brokers even if they can’t influence the way the currency is traded, making it a true double edged sword in terms of value to society.


Unfortunately, it’s not all sunshine and roses, as mentioned there are those who don’t think moving wholly to a cash-free community is a great move, and they do have their reasons. The main reason, rather ironically, revolves around security as well. Holding all of one’s wealth in a virtual space is very good at stopping you being mugged or pickpocketed on the street, but humanity is nothing if not innovative, so what happens when you get digitally mugged? The general rise in tech and computing savvy individuals as the years roll on also means an increase in the ability of people to devise methods of extracting information and therefore, money via electronic means. With every iteration of banking software, ATM, online banking, wallet apps, those wishing to steal are repelled briefly before producing new work arounds and so the cycle goes. As is the case for most lines of questioning about cash-free the real problem is not that cash holdings are diminishing but more that having electronic means without any form of paper based back-up system exposes even multi-billion pound industries to the possibility of just having to cease any form of trading if say; a information leeching trojan horse or worm is released upon them, a server buckles under the load, or god forbid a prolonged power-cut fries some systems. The only other real objection towards the increase of electronic transactions is again rather disturbingly based on human nature. Study has revealed that giving people easy access to financing digitally can have a strong correlation with consumer debt. The ability to go into a store and buy something without having to see a cashier or even type in a pin number means the line between when people spend and how they view each transaction has become skewed. With less deterrent surrounding purchasing and a much easier customer journey comes the fact people don’t keep a true idea of their financial situation as well as they may like. And what happens when you suddenly find you have run out of money that month? You can probably go on the banks website or app and apply for another credit card or loan, easily accessible with background checks done, sometimes, in well under an hour. Consequently, some correlation has been observed between the rise of low cash society and debts compared to household incomes, a scary thought.


Whatever your view point on the future of cash, I’m sure we can all agree it has an interesting and uncertain time ahead. Maybe in another 12 years we will actually have all gone the way of the Swedes and the children born of 2031 will have no real concept of a wad of notes, a couch full of change or ‘making it rain’!


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