It was interesting to see many Finextra readers defending cash. Most arguments in favour of cash are based on sentiments,
rather than hard facts. The best authority on that subject, IMHO, is Dave Birch of Consult Hyperion. He wrote almost 150 blog posts on cash, citing or referencing mind-opening
statistics and facts.
Attempting to sum up Dave's thought-through view on cash would be an injustice - there is more to it that meets the (casual) eye. Instead, I'll chip in with my layman comments
on that matter.
Convenience
There are still some people who are saying that fumbling in your wallet for bits of paper and metal, and getting similar bits in return, is faster or better than being done in one
second with a simple tap. I'd like to see those people putting cash into a machine to buy a paper transport ticket instead of using the likes of Oyster card...
If contactless interface - by law - was available at every retail point, and contactless cards were - by law - accepted for any transaction, 95% of population would stop using cash in less than a year. (Design of some contactless terminals does suck, but that
is a different matter).
On a related note, what would happen if all prices were rounded (up and down) to the nearest five pence/cents? A self-sustainable miracle.
Whilst we still have some psychological attachment to cash, we all hate coins... Once the coins are gone, legitimate use of cash will dwindle.
Privacy
Privacy my ass (pardon my French) - unless you are using Tor for browsing, know how to avoid CCTV cameras and never carry a mobile phone with you. There is no privacy anymore. Learn
to live with it.
Ask yourself this simple question: who really benefits from cash. To help you with the answer, let me re-phrase that question: who will feel the pain if cash were to disappear tomorrow and replaced with its digital equivalent?..
Crime and tax evasion
Hands up (better still, please post your email address and mobile phone number here) those who regularly use €500 notes. And now those
who firmly believe that 100% of taxi drivers, plumbers, builders and other "cash trade" merchants pay correct taxes. How many drug traders accept cards (I am not talking about marijuana
vending machines)? Ditto.
Irrevocability
Cash really "shines" there. Especially when you bought a "lemon" and want to get your money back...
Underbanked
If you thought they need or benefit from cash, you were wrong. Twice. Ask M-Pesa users about it.
Trust and reliability
- Almost 3% of £1 coins are fake.
- Since "cleaning" dirty cash, in large amounts, is extremely hard, why not just keep those "proceeds" in cash? Why do people whose business depends on cash want to get rid of it?.. (The ousted Ukrainian president Yanukovich apparently fled with around $30bn
(!) of looted money... in cash. Just think about the logistics of that move...)
- If you keep £10,000 under your mattress, do you think your household insurance will cover it in case of fire or burglary?..
Are we done there?