The Continued Cachet of Cash
Oct 21, 2024
For resilience, financial education, budgeting and supporting local economies, cash retains cachet above any other payment option. It also has an important role to play even in digital-first economies such as the United Arab Emirates, says Nick Mark of The National.
In his article ‘Bread, brass and beyond: how cashless and cash both find a home in today’s world’, March opens by saying that while the UAE may be targeting a ‘cashless economy’ by the end of the decade, he continues to use cash in neighbourhood shops. At the local bakery, he says customers pay for the fresh flatbreads with dirham coins. These are also well used in the busy laundry next door, and a nearby baqala (grocery store), although that also offers card payments. He also reaches for cash when tipping workers such as delivery or taxi drivers.
Many people, however, are using less cash and leaning heavily on card and mobile payments. While these offer their own advantages and convenience, however, they are simply not as resilient as physical money, nor do they carry the same emotional weight.
The immediacy of digital should far outweigh legacy products, but people also have a nostalgic and emotional attachment to the past and, perhaps, an awareness that physical unwired objects are immutable when the worst digital crisis happens, such as during last month’s Crowdstrike-induced global outage.
Cash brings many benefits to modern transactions, such as providing competition to for-profit payment options and improving inclusivity by ensuring anyone can pay, regardless of age or whether they have a bank account. It is also ‘always online’, usable anytime and anywhere, making it an invaluable backup even for individuals who generally prefer cashless payments.
I’d also argue that some of the most valuable and hardest lessons on monthly budgeting can be learnt from cash or envelope stuffing rather than on an app, although a third way would be to use a prepaid credit card, essentially a digital envelope in this example to pay for regular outgoings in particularly tough or budgetary-constrained months.
March points to Central Bank UAE data that suggests very slightly less physical currency was issued in January this year (0.4 percent), but also indicates more currency is circulating outside banks (an estimated 900 million dirham, or around $245 million).
The economy still has places where cash has utility, even if its usefulness ebbs and flows like the tide. It also hints that those clothes in your wardrobe may still have pockets with discarded cash in them, just like decades ago.