Why we should not hope for a cashless society
Have you been in Moscow recently? If so, you may have noticed these 2.0 ring bearers in the Moscow underground. Russians just launch the next generation of mobile devices: their payring allows consumers to use transport services. They also will be able to pay their bills in shops and restaurants, to be admitted in hospitals with their medical record encrypted on their ring, and so forth. In this futuristic world, the only way to steal your wallet will be by cutting your finger. You may think that’s a joke? Not really.
Because it’s not science fiction anymore. “Transportation industry was the first to have tested and successfully deployed the NFC technology (Near Field Communication) which makes possible to pay by placing a device (card, mobile phone…) on the retailer’s payment terminal”, says Loÿs Moulin, CEO of GCB (which operates credit cards in France). It’s a fact: we use cash less and less. In 2017, a document published by the European Commission even mentioned the scenario of cash disappearance in the EU. “We tend to reduce cash usage in economic exchange, primarily for practical reasons”, considers Philippe Herlin, author of the bestseller “The End of Banks” (Eyrolles, 2015): “Credit cards, with or without contact, is very comfortable to pay small amounts without looking for coins or inserting a card and entering a code. Retailers consider cashless transactions as a step forward, despite the cost (3-4% of the income). They see some advantages in it: it reduces the risk of box errors, it solves security issues for the banknotes transportation, it speeds up checkout in their shop, particularly with contactless payment.” Banks also seem to likely think that managing cash is overrated and truly expansive. According to the GCB, the maintenance of 46,000 ATMs in France costs 2.6 billion Euros per year. That the reason why GCB decided to raise the maximum amount to 30 Euros for contactless payments. “The more a client has the opportunity to make the gesture, the more he will repeat it”, says Loÿs Moulin, CEO of GCB. Is it the forward march of history?
Avoiding a public debate
All over the world, developed societies are really pro-active striving for a cashless model. Let’s take Sweden for example, the first country which will soon turn cashless: according to the BBC, 1% of the value of all payments has been made using coins or banknotes in 2016. In stores, cash transactions barely represent 20% of the volume (dramatically declining from 40% in 2011). Let’s jump to Asia. South Korea’s government has made a decision: no more coins by 2020. Singapore seems even more radical, thinking of getting rid of all physical methods of payment. Singapore Prime Minister Lee Hsein Loong regrets that 60% of the transactions made in Singapore still involve checks and cash. “We have a natural advantage”, says Lee. “We are compact and highly connected. Our people are digital-literate and our schools are teaching students basic computing and robotics. We have the right ingredients.” Cashless society advocates would say “Hey, why not?”. Here is why we should not.
“We live in a digital world where all is available at the touch of a screen”, says the stand-up comedian Rhys Darby. “Money has been simplified, changed subtly over time from tangible bills to numbers in cyberspace. Cash is no longer in cloth bag; it’s numbers on a screen. Numbers that can be manipulated and modified. If you run out of numbers, you can just buy some more, right?” Ironic, isn’t it? He’s got a point, but comedians do not run the world; Web giants, credit cards producers, commercial banks and mobile operators do. And they are powerful.
Most of their arguments aim institutional targets and decision-makers, not the public opinion. They obviously want to avoid a public debate on this question. Those government whisperers know how to impose their game and how to undermine skeptical views about cash disappearance. In press articles and online reviews, anti-cash actors are pro-active and try to blur the terms of the debate. The only real question remains: as citizen, we need to have the choice to use or not to use cash. It’s as simple as that. We should be able to choose between the two.
But once again, anti-cash actors won’t let down their attack. They raise objections to their own arguments, and use arguments that – according to them – can not be contradicted. They point out terrorism activities, money laundering and tax evasion. Three topics that ring bells nowadays, specially at the ears of governments.
Cash benefits
But these macroeconomic arguments have no sense for the common people. Aka us. “First of all, coins and banknotes are tools that have proven their worth in everyday financial transaction. Cash is handy!”, says Herlin. “It’s true: cash withdrawals stagnate, but we do not have entered a downward spiral. More than 120 billion Euros in notes are still annually withdrawn from ATMs in France. The complete disappearance of cash payments in shops doesn’t seem to be within reach before 2030. Based on today’s trend, cash should still represent 9% of the total expenditure in France”, adds Moulin. That said, even if cash would represent only 1%, some people think that we should fight for the right to use bad smelling notes.
Cash users appreciates some of its benefits. First, it remains largely anonymous and untraceable. In a cashless world, each transaction will be traced and possibly recorded. Therefore, every move will be potentially visible and controllable. As we already have abandoned essential personal data online, a 100% digital society would cast upon us the increased risk of decreasing individual liberties. “Consumers associations seem to be extremely vigilant about measures that could limit check usage”, says Moulin. “They would be even more hostile regarding regulations on cash.” Then, the worst case scenario: imagine a cyberattack on commercial banks or on Federal banks. The absence of banknotes would plunge the world into chaos. Anyone tempted by a Mad Max-like society? Anyone, really?
In our everyday life, cash disappearance would also constitute a true obstacle for professionals. Some business sectors still widely use cash in their transactions, such as restaurants and cafes. It facilitates extras management for their employees. Cash also symbolizes the freedom to trade and allows individuals to feel totally free. It has meaning to us, citizens, but also to nations. Banknotes are as symbolic as flags and anthems.
The need to have the choice
Let’s get back to Sweden. Many public places have now banned cash, such as cafes, bus and so on. Mobile credit card readers are everywhere. Even homeless people can get portable technologies to promote their charity magazines and get paid easily for a copy. Start-ups and high-tech companies such as iZettle or Swish provide new solutions for retailers and consumers. More than 10 million people in Sweden now use their mobile phone to pay their bills. It became very popular really fast. Yes, everybody finds it easy to use. Yes, no one carries coins anymore. Yes, everyone has to trust its banks and its government. But yes, citizens also gave up freely all their personal and financial data.
Not everybody upholds this new religion. Former police commissioner and Interpol president Björn Eriksson expresses his need to have the choice between dematerialized and traditional means of payment. “I like cards”, he says. “I’m just angry because about a million people can’t cope with cards: the elderly, former convicts, tourists, immigrants. The banks don’t care because these groups are not profitable.” Eriksson leads the counter-attack, through the national movement Kontantupproret (Cash Rebellion), saying out loud that cashless society will never be the Promised land, raising concerns in terms of cyber-attacks, consumer debt and identity theft. He argues: “This system could easily be disturbed or manipulated. Why invade us when it’s so easy? Just cut off the payment system and we are completely helpless.”
Whistle-blowers try to warn us about a 1984-like model. Last November, British author Ross Clark published his new essay titled “The War Against Cash: The Plot To Empty Your Wallet And Own Your Financial Future”. Clark writes: “If we no longer had the option of paying with cash, a computer failure would not be easy to deal with and could cause the seizure of the entire economy. The growing prevalence of technology that allows us to make payments with mobile phones raises its own issues. There is no way I will ever pay for anything using my mobile phone. We are warned not to access our bank accounts on insecure Wi-Fi networks, so why should you ever risk making a payment via a mobile phone? And I have also lost count of the number of times I’ve taken my phone out of my pocket and realized the battery has run down.” So, at the end of the day, if you still can’t choose between the two systems (cashless or not), you may think to flip a coin. But you know what: you’ll need a coin in your pocket.
Because it’s not science fiction anymore. “Transportation industry was the first to have tested and successfully deployed the NFC technology (Near Field Communication) which makes possible to pay by placing a device (card, mobile phone…) on the retailer’s payment terminal”, says Loÿs Moulin, CEO of GCB (which operates credit cards in France). It’s a fact: we use cash less and less. In 2017, a document published by the European Commission even mentioned the scenario of cash disappearance in the EU. “We tend to reduce cash usage in economic exchange, primarily for practical reasons”, considers Philippe Herlin, author of the bestseller “The End of Banks” (Eyrolles, 2015): “Credit cards, with or without contact, is very comfortable to pay small amounts without looking for coins or inserting a card and entering a code. Retailers consider cashless transactions as a step forward, despite the cost (3-4% of the income). They see some advantages in it: it reduces the risk of box errors, it solves security issues for the banknotes transportation, it speeds up checkout in their shop, particularly with contactless payment.” Banks also seem to likely think that managing cash is overrated and truly expansive. According to the GCB, the maintenance of 46,000 ATMs in France costs 2.6 billion Euros per year. That the reason why GCB decided to raise the maximum amount to 30 Euros for contactless payments. “The more a client has the opportunity to make the gesture, the more he will repeat it”, says Loÿs Moulin, CEO of GCB. Is it the forward march of history?
Avoiding a public debate
All over the world, developed societies are really pro-active striving for a cashless model. Let’s take Sweden for example, the first country which will soon turn cashless: according to the BBC, 1% of the value of all payments has been made using coins or banknotes in 2016. In stores, cash transactions barely represent 20% of the volume (dramatically declining from 40% in 2011). Let’s jump to Asia. South Korea’s government has made a decision: no more coins by 2020. Singapore seems even more radical, thinking of getting rid of all physical methods of payment. Singapore Prime Minister Lee Hsein Loong regrets that 60% of the transactions made in Singapore still involve checks and cash. “We have a natural advantage”, says Lee. “We are compact and highly connected. Our people are digital-literate and our schools are teaching students basic computing and robotics. We have the right ingredients.” Cashless society advocates would say “Hey, why not?”. Here is why we should not.
“We live in a digital world where all is available at the touch of a screen”, says the stand-up comedian Rhys Darby. “Money has been simplified, changed subtly over time from tangible bills to numbers in cyberspace. Cash is no longer in cloth bag; it’s numbers on a screen. Numbers that can be manipulated and modified. If you run out of numbers, you can just buy some more, right?” Ironic, isn’t it? He’s got a point, but comedians do not run the world; Web giants, credit cards producers, commercial banks and mobile operators do. And they are powerful.
Most of their arguments aim institutional targets and decision-makers, not the public opinion. They obviously want to avoid a public debate on this question. Those government whisperers know how to impose their game and how to undermine skeptical views about cash disappearance. In press articles and online reviews, anti-cash actors are pro-active and try to blur the terms of the debate. The only real question remains: as citizen, we need to have the choice to use or not to use cash. It’s as simple as that. We should be able to choose between the two.
But once again, anti-cash actors won’t let down their attack. They raise objections to their own arguments, and use arguments that – according to them – can not be contradicted. They point out terrorism activities, money laundering and tax evasion. Three topics that ring bells nowadays, specially at the ears of governments.
Cash benefits
But these macroeconomic arguments have no sense for the common people. Aka us. “First of all, coins and banknotes are tools that have proven their worth in everyday financial transaction. Cash is handy!”, says Herlin. “It’s true: cash withdrawals stagnate, but we do not have entered a downward spiral. More than 120 billion Euros in notes are still annually withdrawn from ATMs in France. The complete disappearance of cash payments in shops doesn’t seem to be within reach before 2030. Based on today’s trend, cash should still represent 9% of the total expenditure in France”, adds Moulin. That said, even if cash would represent only 1%, some people think that we should fight for the right to use bad smelling notes.
Cash users appreciates some of its benefits. First, it remains largely anonymous and untraceable. In a cashless world, each transaction will be traced and possibly recorded. Therefore, every move will be potentially visible and controllable. As we already have abandoned essential personal data online, a 100% digital society would cast upon us the increased risk of decreasing individual liberties. “Consumers associations seem to be extremely vigilant about measures that could limit check usage”, says Moulin. “They would be even more hostile regarding regulations on cash.” Then, the worst case scenario: imagine a cyberattack on commercial banks or on Federal banks. The absence of banknotes would plunge the world into chaos. Anyone tempted by a Mad Max-like society? Anyone, really?
In our everyday life, cash disappearance would also constitute a true obstacle for professionals. Some business sectors still widely use cash in their transactions, such as restaurants and cafes. It facilitates extras management for their employees. Cash also symbolizes the freedom to trade and allows individuals to feel totally free. It has meaning to us, citizens, but also to nations. Banknotes are as symbolic as flags and anthems.
The need to have the choice
Let’s get back to Sweden. Many public places have now banned cash, such as cafes, bus and so on. Mobile credit card readers are everywhere. Even homeless people can get portable technologies to promote their charity magazines and get paid easily for a copy. Start-ups and high-tech companies such as iZettle or Swish provide new solutions for retailers and consumers. More than 10 million people in Sweden now use their mobile phone to pay their bills. It became very popular really fast. Yes, everybody finds it easy to use. Yes, no one carries coins anymore. Yes, everyone has to trust its banks and its government. But yes, citizens also gave up freely all their personal and financial data.
Not everybody upholds this new religion. Former police commissioner and Interpol president Björn Eriksson expresses his need to have the choice between dematerialized and traditional means of payment. “I like cards”, he says. “I’m just angry because about a million people can’t cope with cards: the elderly, former convicts, tourists, immigrants. The banks don’t care because these groups are not profitable.” Eriksson leads the counter-attack, through the national movement Kontantupproret (Cash Rebellion), saying out loud that cashless society will never be the Promised land, raising concerns in terms of cyber-attacks, consumer debt and identity theft. He argues: “This system could easily be disturbed or manipulated. Why invade us when it’s so easy? Just cut off the payment system and we are completely helpless.”
Whistle-blowers try to warn us about a 1984-like model. Last November, British author Ross Clark published his new essay titled “The War Against Cash: The Plot To Empty Your Wallet And Own Your Financial Future”. Clark writes: “If we no longer had the option of paying with cash, a computer failure would not be easy to deal with and could cause the seizure of the entire economy. The growing prevalence of technology that allows us to make payments with mobile phones raises its own issues. There is no way I will ever pay for anything using my mobile phone. We are warned not to access our bank accounts on insecure Wi-Fi networks, so why should you ever risk making a payment via a mobile phone? And I have also lost count of the number of times I’ve taken my phone out of my pocket and realized the battery has run down.” So, at the end of the day, if you still can’t choose between the two systems (cashless or not), you may think to flip a coin. But you know what: you’ll need a coin in your pocket.
Companies