Cash Brings Financial and Social Stability
Oct 23, 2024
For resilience, for privacy, for budgeting and for choice, cash is king. In a recent column, journalist and author Ross Clark explored how retaining cash in a digital world offers a slew of benefits and helps offset some weaknesses of non-cash payments.
Clark opens by saying ‘we should think very carefully before we allow cash to disappear from our lives’. While cards are often convenient, July’s global IT outage is a reminder that they cannot be completely relied upon. Beyond occasional, major network faults, brief downtime is relatively common for businesses, and individuals can lose cards, forget PINs or be let down by phone batteries. For any occasion when cashless is not an option, cash is there to save the day.
Cash also offers autonomy, enabling people to make choices about how they spend and save without the oversight or approval of banks or other individuals. Clark points out that if cash were removed from an economy, ‘the power which banks wield over us… [would] be absolute. They [would] be able to banish us from participation in the economy at the press of a button.’
Another benefit of cash is its inclusivity. A Welsh Parliament committee heard in late 2023 that ‘businesses refusing cash are discriminating against people with disabilities. Designed with inclusion in mind, physical money is easy to understand—especially beneficial to those with learning disabilities—and has features that make it easily usable for people with visual impairments. For anyone either unwilling or unable to engage with digital payments, including the very young and the very old, cash is a lifeline that enables them to save and spend as they choose.
There are people who prefer to use cash as a means of budgeting. There was, in fact, a small increase last year in the proportion of people saying they mainly or only use [physical money]. Using cash forces us to count what we are spending, while tapping a terminal with a contactless card does not. Indeed, there is research which shows that people are apt to spend more when they are using contactless cards and mobile phones than when using cash. Little wonder, then, that some retail outlets are keen to convert us to contactless payments.
He closes by saying that arguments around cashless transactions being less appealing for criminals are baseless.
Just look at the explosion in online crime. Just because cashless transactions are theoretically traceable doesn’t mean that anyone is going to bother tracing them—as anyone who has tried to report online fraud will attest.
This assertion is backed up by observations from Sweden, often considered ‘a cashless ideal’, where financial crime has surged in recent years, bolstered by digital transactions, and the Central Bank has recommended greater legal protections around the right to access and pay with cash.
To create the most fair and inclusive economy, ensure everyone has choice in how they pay, and that cashless payments always have competition, cash remains essential as ‘a symbol of our financial security’. Clark concludes that it should remain so, ‘if we are brave enough to say no to those who would love to banish cash from the economy.’