business

Cash is dead! Long Live Cash!

Maestro have recently been running a campaign heralding in a new era where ‘cash is dead’. Anyone who has had the deep misfortune of travelling on the tube recently may have seen this ad campaign which tracks the history of ‘cash’ or cash equivalents throughout time, arriving at today where maestro is ‘the new cash’.

Meanwhile Barclays (aided by Visa – pretty much Maestro’s nemesis) launched their ‘One Pulse’ card which combines a Credit Card, Oyster Card (London underground pass) and Contactless Card. The Contactless card allows the holder to make transactions under £10 without the need of entering a pin, simply by tapping it against a secure reader in participating stores. So not only is this replacing the need for loose change, it’s also bringing three cards together in one, madness I hear you say.

Whilst it can not be disputed that there has been a shift towards debit and credit card transactions in the last couple of years, Bank of England statistics show that between 2004-2006 M0 (coins and notes in circulation) has continued to grow.

So now that the scene has been set, I just wanted to highlight some of the points around this ‘cash is dead’ scenario.

1) Cash isn’t dead for the poor

The one misunderstanding that Maestro has made is that not everyone is squeaking in excitement about going ‘contact less’ because they are tired of fumbling for pound coins to buy their dry frappacino, vanilla shot, extra shot everyday.

Whilst changes in the welfare system have led to some of those excluded from the banking system being internalised (i.e. they must have a bank account to pay their benefits into), there is a big gulf between the basic bank account offering and a normal debit card in terms of usability. Some basic bank accounts (i.e. Solo accounts) are not accepted in many stores, creating yet another stigma and label for those who are at the fringes of the banking system.

Also there are people that are excluded from the banking system due to the fact that it is intrinsically more complex than having hard cash in the hand. There are pins to remember, limits to obey and various dos and don’ts around payment instructions. These are things that the people at Maestro take for granted, for some people this isn’t quite such an easy task vis-à-vis the simplicity of cash money. Whilst I acknowledge that steps have been taken by a number of Banks to ensure their literature is written in plain English and thus carries a Crystal mark, I still can’t help but think many people are a million miles away from cash playing a reduced part of their lives.

2) Cash isn’t dead for the independent store (but will the Independent Store die as a result?)

Whilst a checkout assistant at Tesco barely blinks at a request to buy a Mars Bar on debit card/credit card, it isn’t economically viable for small scale shopkeepers to facilitate such minuscule electronic transactions as the handling fee invariably eats into the net profit derived from the sale. If the customer doesn’t have the cash equivalent, they walk down the road to Tesco to complete the transactions and the shopkeeper misses out on the revenue. Whilst from a customer services perspective the customer acts rationally, I think at some point in the future we will need to take a step back and think about what type of Great Britain we are building for our children and our children’s children. The sad tale is told in the local press up and down the country on a weekly basis: ‘Jack Roberts, shopkeeper for 40 years (man and boy) pulls down the shutters for the last time due to lost sales to Tesco.’ It’s all just the accumulation of a missed mars bar sale here, a canceled paper delivery there which is the difference between one man’s livelihood and a future of generic, soul destroying consumerism.

3) Cash isn’t dead for the crooked

Dealers don’t take card, even Contactless ones. Migrant workers collecting cockles illegally don’t get a nice pay check put in their bank account from their evil troupe leader. Prostitutes lining the streets of Whitechapel don’t ask punters to tap in their pin before taking them back for a bit of ‘how’s your father’ in their seedy bedsits. Whilst the damage that the black economy causes is a strong argument for a ‘cashless society’, paradoxically, it’s existence is possibly the strongest argument for why it will never happen. The motivations of certain people will always require transactions to be hidden and no audit trail to be left. In the words of Jean-Paul Sartre

“It disturbs me no more to find men base, unjust, or selfish than to see apes mischievous, wolves savage, or the vulture ravenous”.

4) Cash isn’t dead for the crazy

Oh yeah, just when you thought it was safe to talk about something without a bible-wielding American wading in, in they charge like rabid crusaders! If you google cashless society, you unleash a torrent of madness. My favourite is this one, which in summary, suggests that the cashless society was predicted by God and it’s pretty much the Devil’s idea.

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