Just a month ago, we warned that Covid-19, climate change, and economic need were being bundled together as portmanteau justifications for politicians, planners, and commerce to implement longstanding pet projects which could change the lifestyles of ordinary citizens irrevocably, and without their wishes being taken into account.
A case in point is the momentum towards phasing out cash for everyday personal transactions and purchases.
Some Irish shops are starting to refuse cash payments, the Consumers’ Association of Ireland has warned. Which magazine reported that since the UK lockdown lifted, one in five people had been blocked from paying with coins and notes. This was most likely when shopping for groceries, it said.
Fintech big-hitters have been lining up to promote a cashless society, principal among them those organisations with a vested interest, such as banks, mobile-phone companies, e-wallet enterprises, and new credit and debit-card suppliers.
They have been aided in their campaign by the closure of bank branches, reductions in free-to-use automated teller machines, and, for a time, a particularly cunning piece of pseudo-science hokum which held that hard currency was dangerous to handle in the age of Covid. A similar piece of nonsense was promulgated about newspapers.
Compelling arguments in favour of contactless payments can be mustered. For certain generations, paying with their watches and phones is cool, convenient, and reinforces their sense of digital self-identity. They enjoy it, and should be able to make that choice.
Retailers like it because it enables staff to spend less time shuffling change and more time on selling and stocking. The customers’ money hits their financial systems more quickly, producing better cash flow and data for all those just-in-time suppliers. The advantages for banks and financial institutions include the ability to run on tighter staffing levels and high levels of oversight.
Politicians like the sound of it because every purchase will be linked to an account. Farewell black economy, welcome 100% tax record.
The physical disadvantages of transporting cash securely are self-evident, but the merits of transacting online are currently overstated. There is no shortage of examples of fraud, including phishing and smishing, which exploit email and SMS systems to trick the unwary into revealing bank details and passwords. Major hacking and ransomware gangs have made their commercial and social impact felt in Ireland.
In short, a significant number prefer to make purchases in the old way because they don’t trust the new. Many like to keep notes and coins as a hedge against technical failures and bank runs of the type seen in the 2007 financial collapse.
Countries in the vanguard of the move to fully integrated e-commerce include Finland, Norway, South Korea, China, the UK, and Australia. Ireland is not yet on that list, despite contactless payments by consumers hitting a new record this summer with an average of 2.5bn payments worth €40.5m made daily. The value of the average payment increased to €16.21, from €15.63 a year earlier. Cheque payments remain at historically low volumes of 2.1%.
However, Consumers’ Association senior policy adviser Dermot Jewell says that short of a referendum, the option to use cash should be guaranteed. And we agree with him.
Ireland has never been a cashless society for the very good reason that cash is hugely popular,” he said.
There are also marginalised communities and digitally-excluded people who cannot access bank accounts or smart technology. Other people live off fixed allowances and do not wish to control and audit their limited spending in this way.
“It does not suit everybody,” said Mr Jewell.
One size does not fit all, however much technocrats and financial officers may wish it. Cash is not obsolete as a means of exchange unless we kill it. And that would be profoundly unwise and dangerous.