The Cashless Society
In a world of ecommerce and contactless payments it’s very easy to buy into the myth that we are becoming a cashless society.
Whilst it’s true that cashless payments overtook the use of notes in 2015 for the first time, it’s little wonder considering so much of what we buy, particularly in the UK is online or has to be done via direct debit.
Direct debits and the advent of interest free credit has shifted a significant proportion of consumer goods into the realm of budgeted for costs rather than considered purchases. This means it rarely occurs to modern consumers to buy furniture, white goods or high end electronics outright, let alone with cash.
However, whilst cash has experienced a decline, it will never go out of fashion for three very simple reasons:
Cash Only Business
Love them or loathe them, some businesses will only ever take cash. The great institution of the British Fish & Chip shop being the classic example.
Between logistics, bank charges and average cost per transaction, taking debit or credit cards just is not viable for some small businesses.
Whilst conglomerates like Tesco have negotiated for competitive transaction rates with banks, so you can pay for a Dairy Milk on your card should you so choose, small businesses can be charged £1 or more which can destroy margins.
In a world of big business and chain stores, it’s more important than ever for small businesses to maintain their profit margin whilst keeping prices low. Cash is a great way of achieving that.
Until the world’s banking institutions are fully aligned, attempting to pay for goods whilst abroad can be fraught with problems.
Language barriers are, of course, an issue but transaction fees, overzealous fraud prevention measures and the disparity between one country’s security measures and another’s can make paying on a card more trouble than it’s worth.
Cash is a stable easy alternative that won’t be declined (unless you’ve taken the wrong currency with you) and allows you to explore countries in a freer way than if you’re bound by a credit card machine.
Local excursion companies, small independent businesses and souvenir stalls aren’t necessarily going to take Master Card.
Cash opens up a country in a way that using a debit or credit card simply can’t. It’s a tactile way of doing business that encourages us to experience not just the place but the people.
How many times have we been guilty of not making eye contact with the person behind the counter because we’re too intent on punching in our pin number or holding our card above the reader?
Cash Makes Us Feel Good
There is an ineffable comfort to cash. It’s reliable, un-hackable and reassuring to have with you when you’re out. If you have £20 in your purse or wallet, it’s only going somewhere if you spend it. The same isn’t necessarily true for the abstract bank account floating somewhere in a banking mainframe.
Depending on who you bank with, a fondness for contactless payments can land you in hot water as the money doesn’t always leave your account straight away. Security checks can take up to a week giving the unwary a truly nasty surprise when they get a text informing them that they’ve exceeded their overdraft limit.
Cash, as mentioned, helps to humanise our transactions. Adding the tip on to your bill isn’t quite the same as handing your server the gratuity yourself. Besides, if they’ve done a good job, thanking them is so much nicer.
Plus if you have ever been to the US or the Caribbean, there’s a certain sense of celebrity derived from tipping with a folded $5 or $10 bill with a handshake.
Experts predict a decline in cash as new technologies surface and companies like Amazon continue to dominate in price lead economies like the UK. However, the reality is cash will always have a presence in our lives.
It can’t be cloned, it can’t be declined. It’s easier to track, easier to budget with and encourages us to lift our eyes and smile at another human being in age where we’re all glued to our phones.
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