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Why Ebola might kill cash

The Fear Factor on Ebola is over the top right now. We are spending countless hours in the media analyzing footage of health workers, figuring out how a nurse in Texas contracted the disease despite strict quarantine procedures, and debating over whether to travel on aircraft. In all of this though, the transmission methods of Ebola have been well understood for more than 30 years, and there has been no mutation of the virus that would suggest transmission has evolved. Although I did think Borowitz's take on this was classic (New Yorker Post by Andy Borowitz.)

It is estimated by the WHO that up to 80% of viral and bacterial transmissions occur through contact via your hands. That being said, it turns out physical bank notes are a huge transmission vector for viruses like Ebola.

“The NYU researchers identified 3,000 types of bacteria in all — many times more than in previous studies that examined samples under a microscope,” wrote WSJ’s Robert Lee Hotz.
(See "Why you shouldn't put your money where your mouth is" April 18, 2014)

Viruses and bacteria can live on most surfaces for about 48 hours, but paper money can reportedly transport a live flu virus for up to 17 days. A study published in Antimicrobial Resistance and Infection Control found that some microbes can have an even longer lifespan on plastic polymer bank notes. 

A team of researchers from the departments of Biochemistry and Microbiology, Ebonyi State University, Abakaliki, had, in a recent work published in International Journal of Advanced Biological Research, isolated and identified some disease-causing microorganisms on Nigerian currency notes obtained from bankers, beggars, market women and bus conductors in Lagos, Onitsha, Enugu and Abakaliki. They found that the currencies used by beggers and hawkers were extremely contaminated with various disease causing microorganisms followed by the currency used by traders, taxi drivers and market women, advising that adequate care must be taken by those handling these currencies. The strongest correlation it appears is when someone handles cash, and then eats soon after. This statistically dramatically increases the chances of transmission. In this study, however, they appear to suggest that Polymer bank notes are less effective means of virus or bacterial transmission.

Yesterday I interviewed Peter Schlebusch the CEO Private and Business Banking for Standard Bank, the largest bank (by assets) on the African continent. They have thousands of staff in Africa and staff traveling to Ebola Virus Disease (EVD) effected zones frequently. Schlebusch said that transmission of the Ebola virus via cash notes should not be discounted...

"There's been numerous studies over time on the hygiene of banknotes and the passing of banknotes from one person to another. Some of [our] colleagues in West Africa will tell [us] that there is a growing body of evidence to suggest that some of the Ebola transmission could take place via banknotes, which I guess just makes another case for mobile money" - Peter Schlebusch (Standard Bank) Breaking Banks; Radio Show, October 16th, 2014

While I don't want to get caught up in fear mongering over Ebola transmission, because there is already far too much hype. It would seem the prudent thing is to start using Moven, Venmo, ApplePay and Google Wallet exclusively. The death of cash appears inevitable in any case...

It would just be better that we use this as a catalyst for the death of cash, rather than the death of cash users.

 

Is your cash killing you?
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Comments: (36)

A Finextra member
A Finextra member 19 October, 2014, 20:111 like 1 like

As someone who lives mostly in Nigeria a country that has recently been declared Ebola free, I 100% disagree with this story. So you interviewed a CEO of Private and Business Banking for Standard Bank which have comparatively small retail operations and market share in the West African countries that were hit by Ebola but I find it hard to correlate his statements about the virus and its relationship with mobile money.

There was no reference to any empirical data which exists as evidence to show that there was even a marginal increase in the use of electronic payments during those dark months from when the first Nigerian Ebola case was reported about the 25th of July, up on till last week. 

We all want the demise of cash but only compelling cases will bring this about, there is nothing to prove that existence of Ebola will.

In my opinion Moven, Venmo, ApplePay and Google Wallet all seem to be dependent on the incumbent card brands, mobile payments need to avoid the unnecesary parties in order keep costs low and compete with Mr. Cash. 

 

Brett King
Brett King - Moven - New York 19 October, 2014, 20:18Be the first to give this comment the thumbs up 0 likes

Mosh,

Thanks for the feedback. I don't have data on electronic payments or mobile wallet adoption for Nigeria in the light of Ebola, so if you have access to any I'd definitely be keen on seeing it.

BK

Melvin Haskins
Melvin Haskins - Haston International Limited - 20 October, 2014, 04:531 like 1 like

I would find this more believeable with examples of actual cases of people becoming ill after handling cash. Having travelled throughout Africa,the Middle East and Asia over the last 40 years and handled cash 20 or more times per day, I have never experienced ilness. Nor have any of my colleagues.

 

Much as you would like to see the demise of cash, it still remains the payment method of choice throughout these regions, particuarly as it offers two things that electronic payments cannot offer - anonymity and tax avoidance.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 20 October, 2014, 11:151 like 1 like

Talking trash against cash even under normal circumstances carries its own risk as the CEO of MasterCard found to his dismay when he was labeled a “cheapskate” by his own subordinates for doing so (http://ow.ly/AQHok). But spurning cash in a healthcare context is highly impractical especially when (1) Millions of people die every year because they don't have money to pay for treatment of their illnesses, and (2) Money really means cash or cheque or plastic credit / debit card in this situation but not mobile payments - even if a few patients might have mobile payments, I wonder how many hospitals in the world accept mobile payments. Then, to see the deadly Ebola epidemic used to decry cash and promote mobile payments on Finextra - which I thought expressly forbade self-promotion of any kind - is extremely disconcerting.

Jim Wells
Jim Wells - Wellspring Consulting International - Fort Lauderdale 20 October, 2014, 12:381 like 1 like

Good grief. It appears that the 'death of cash' discussion will stop at nothing. Now it will try to use scare tactics to move its ludicrous premise forward.

Leaving aside the fact that consumers evidence no great desire to abandon cash completely, nations have several vested interests in preserving currency.  It is an important component of sovereign identity.  It acts as an interest free loan from holders.  And it is a reliable source of revenue when coins and notes are lost, destroyed or squirreled away on sock drawers.  

Brett King
Brett King - Moven - New York 20 October, 2014, 13:01Be the first to give this comment the thumbs up 0 likes

Love it!! Was waiting for the pro-cash guys to chime in... and they didn't let me down

BK

Matt White
Matt White - Finextra - Toronto 20 October, 2014, 13:104 likes 4 likes

No, I think the general consensus is that you've let yourself down.

Jim Wells
Jim Wells - Wellspring Consulting International - Fort Lauderdale 20 October, 2014, 13:17Be the first to give this comment the thumbs up 0 likes

Happy to oblige with a healthy dose of reality.

The other reason why cash is NOT going away any time soon is that it is the only real-time payment settlement mechanism without recourse available to ALL consumers, and NOT dependent on a power source.  

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 20 October, 2014, 13:33Be the first to give this comment the thumbs up 0 likes

@MattW + 1.

A Finextra member
A Finextra member 20 October, 2014, 13:402 likes 2 likes

Wrong again Brett. People are simply setting things straight. I'm very pro digitizing of money and payments. Your hypothesis, resources and references were just unsually off in this case.

A lot of us consider your point of view on some topics as gospel but I think you need to be a little careful with the Ebola angle, it makes one question your motives for writing the article. 

Nigeria? A little light reading on West Africa would not hurt: https://mobilemoneyfordevelopment.wordpress.com/tag/bill-melinda-gates-foundation/

http://www.gatesfoundation.org/What-We-Do/Global-Development/Financial-Services-for-the-Poor

Brett King
Brett King - Moven - New York 20 October, 2014, 13:47Be the first to give this comment the thumbs up 0 likes

@MattW/@Ketharaman - there's always a first for everything

There are only two developed economies in the world where cash use is increasing namely Japan and Germany, in every other developed economy cash use is rapidly declining.

The article was obviously 'link bait' I'll admit that - but it also is a completely scientific valid observation. Is it going to result in the death of cash, no - behavior will do that on its own.

There are already 9 countries in Africa where mobile payments usage exceeds cash usage. This is not about a resource available to poorer customers at the lower end of the market - that is 1960s thinking. We are in a new age, with new technologies for payments. Obsolete is just obsolete, although cash will have an extraordinary long tail.

Thanks for the feedback

 

Jim Wells
Jim Wells - Wellspring Consulting International - Fort Lauderdale 20 October, 2014, 13:49Be the first to give this comment the thumbs up 0 likes

Big difference between rising use of various forms of electronic payments and the death of cash

Brett King
Brett King - Moven - New York 20 October, 2014, 15:16Be the first to give this comment the thumbs up 0 likes

@Jim - actually no, there's no difference at all.

Let's take Australia.

Since 2007 cash use has been in decline, directly correlating with take up of digital payment methods.

Just in the last year alone, cash withdrawals from ATMs decreased by almost 5 million instances (out of 60 million) per month. The value of those withdrawals also decreased by 9% or $10.8 Billion. Cash usage is expected to decline a further 43% by 2018.

Sweden has announced it's intention to be the first cash free nation just this month - http://www.businessinsider.com/sweden-goes-cash-free-2014-10

While in Italy cash still accounts for 2/3rds of payments, today cash use is the outlier, not electronic payments.

I'm afraid your assertion that digital payments increase doesn't equate to the death of cash is not a view supported by the data, unless you are in outlying economies at this stage.

We will see the death of cash, the same way we've seen the death of passbooks, newspapers, video rental stores, and other such outmoded behavior. The predicted death of cash does not have to see every single bank note disappear to be effectively called - it just has to stop being used by the vast majority of the population. That is likely less than a decade away for most developed economies. While cash will remain for sometime after that, it certainly won't be a dominant form of payment out past 2030.

Jim Wells
Jim Wells - Wellspring Consulting International - Fort Lauderdale 20 October, 2014, 15:48Be the first to give this comment the thumbs up 0 likes

According to the Federal Reserve Bank of Boston’s recent multi-country research, “even in the U.S., where electronic payments are especially prevalent, the ratio of cash in circulation relative to nominal gross domestic product has increased since 2000, a phenomena matched in other noneuro countries.”

Echos similar finding from the Bank of Canada.

Every hack of bankcard data at banks and retailers increwases the potential for consumers to return to cash.  I have now use cash more frequently for gasoline purchases as those remote, unsupervised POS terminals appear to present a higher likelihood for skimming than in-store terminals.    

 

A Finextra member
A Finextra member 20 October, 2014, 15:53Be the first to give this comment the thumbs up 0 likes

Cash is going to die. Get used to it fellas. It won't be tomorrow, but it is going to happen and that is a fact. As far as bacteria and viruses living on banknotes and coins, it is a scientific fact not a false or fraudulent observation. Germ ridden banknotes are just one more reason that cash will die a slow but lingering death of a thousand cuts. As Brett has pointed out, it is a minor point in this debate and not the reason for the eventual and blessed decline of cash.

Brett King
Brett King - Moven - New York 20 October, 2014, 15:56Be the first to give this comment the thumbs up 0 likes

@Jim - you are an outlier. Not representative.

For every Jim Wells there are 20-30 Millennials who never use cash. In respect to the FRB data, the real trick is to look at data from EFMA, UK Payments Council and others that show small transactions are stable for cash, but the value of those payments is rapidly declining. So on a total value of cash payments in retail, it's rapidly changing. That's the behavior that matters, whether it is used of everyday things, or just micropayments 

Jim Wells
Jim Wells - Wellspring Consulting International - Fort Lauderdale 20 October, 2014, 16:241 like 1 like

If your premise is that "The predicted death of cash does not have to see every single bank note disappear to be effectively called - it just has to stop being used by the vast majority of the population." you appear to have a different definition of the words "kill" and "death" than the rest of the English-speaking world.  So the purpose of the article seems to be to sensationalize the fairly common-sense observation that over time, electronic forms of payments will "reduce" the use of cash. Brilliant. I agree.  But it is much like forecasting that the sun will continue to rise in the East. 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 20 October, 2014, 16:471 like 1 like

@JimW is an outlier because he has returned to cash. I've also returned to cash - even for ecommerce. I've written about the reasons for my switch several times. Suffice to say that they're exactly the opposite of @JimW's: Oversecurity, not lack of security - VbV, OTP, PIN, etc. But, then, I also must be an outlier. Not one of the over 10 Millennials I personally know in the USA uses mobile payments. They all must be outliers. I love the strategy of calling anything that doesn't match a certain hypothesis an outlier.

After being around for several years, mobile payments hasn’t entered the mainstream.  But to use the Ebola scare to promote it signals sheer desperation. Hope that’s also an outlying behavior.

A Finextra member
A Finextra member 20 October, 2014, 16:54Be the first to give this comment the thumbs up 0 likes

Good historians make good futurists, and in digital finance we have much history to draw from. Following the 9/11 terrorism wave we had the US domestic threat of anthrax poisoning, and reighning fintech industry pundits were using anecdotal exectutive interviews (such as the one with Peter Schlebusch of Standard Bank) to forecast that we were about to realize a massive shift from paper to electonic billing and payment (remember that this was over a decide ago). Consumer quantiative market research showed that the impact was so insigificant to be a non-issue, and issues of convenience and montary gain are now all that we remember as banks, billers or merchants and consumers have more steadily moved from paper to electronic currency. 

Gregg Weintraub
Gregg Weintraub - State Street IMS - Princeton 27 October, 2014, 17:42Be the first to give this comment the thumbs up 0 likes

James - Science Fiction writers make even better futurists.  See 1982's White Plague by Frank Herbert.  Brett's story above is torn from the pages of science fiction as distracting as that may be to the core issue.  We can debate the demise of cash, but the behavioral shift required to quote Brett  "For every Jim Wells there are 20-30 Millennials who never use cash.", will take a generation at least and I am sure additional technological innovations to assist.

 

A Finextra member
A Finextra member 27 October, 2014, 17:52Be the first to give this comment the thumbs up 0 likes

I can't believe how many typographical errors my previous post had (makes we wish this site had an edit function!) Honestly people, I did go to a real call-edge. 

A Finextra member
A Finextra member 27 October, 2014, 17:57Be the first to give this comment the thumbs up 0 likes

Cash can be laundered.

And at the risk of offending folk, which is not my intention, just as in payments, these things can be seen in different ways on opposite sides of the pond http://www.youtube.com/watch?v=lAz-F1QnyCk

Brett King
Brett King - Moven - New York 27 October, 2014, 18:07Be the first to give this comment the thumbs up 0 likes

Again, for those of you struggling to understand this, you are not alone. Read the following post on the "Venmo Line" identified in some recent millennials payments behavior research. It is a dramatic and purposeful shift away from cash - http://qz.com/277509/read-what-happens-when-a-bunch-of-over-30s-find-out-how-millennials-handle-their-money/

It is clear that millennials don't use cash and cheques the same way as their parents. You can hope all you want that they'll still use cash and cheques, but they just wont

BK 

Jim Wells
Jim Wells - Wellspring Consulting International - Fort Lauderdale 27 October, 2014, 18:13Be the first to give this comment the thumbs up 0 likes

For all the talk about Millennials not using cash, it is fascinating to read the research from the ATM industry saying that their newest source of demand is placing more ATMs in more locations with mobile interfaces to support Millennials demand for cash and related services from electronic accounts.

Brett King
Brett King - Moven - New York 27 October, 2014, 18:15Be the first to give this comment the thumbs up 0 likes

@Jim,

I was with Wincor Nixdorf last week in Istanbul and can reply that your last statement on ATM demand is simply not true.

BK 

A Finextra member
A Finextra member 27 October, 2014, 18:271 like 1 like

Sure but that's because of mass adoption of smartphones, not because there's anything wrong with cash. Smartphones aren't (just) phones they're computers - so they can better inform, incent, simplify initiation of the transaction, electronic invoice the outcome. Fewer consumers want to be anonymous when they can get all that. Merchants like to be able to exploit wait-time in queues to inform and incent their clients too. What's not to like?

I'll believe it when I see it. Anyone else going to Cartes, or Money2020?

Jim Wells
Jim Wells - Wellspring Consulting International - Fort Lauderdale 27 October, 2014, 18:27Be the first to give this comment the thumbs up 0 likes

Mercator Advisory Group predicts the number of ATMs worldwide to increase by more than 25%, from 2.6 million at the end of 2013 to about 3.3 million by 2017 to support a wide range of functions in support of users of mobile financial services, including withdrawals, deposits, bill payment, money transfers and the like.

Melvin Haskins
Melvin Haskins - Haston International Limited - 27 October, 2014, 18:332 likes 2 likes

I believe that this story started with the headline 'Why Ebola might kill cash' with the far fetched story about the virus being transferred on banknotes - not to dissimilar to the urban myth of 30 different viruses in a bowl of peanuts on a bar counter. It seems to have turned into a lengthy discussion on the future of cash. In the countries where ebola is currently raging, cash remains the dominant payment method for small transactions and is likely to continue for the next 50 years or more, regardless of the findings of the Ebonyi University. That wonderful book 'How to Lie with Statistics' by Daryl Huff is now more than 50 years old and it is still highly appropriate and readable.

Jim Wells
Jim Wells - Wellspring Consulting International - Fort Lauderdale 27 October, 2014, 18:35Be the first to give this comment the thumbs up 0 likes

Thanks Melvin for inserting another dose of reality into the discussion.

 

A Finextra member
A Finextra member 27 October, 2014, 18:452 likes 2 likes

We'd all be heathier if we use our smart devices instead of our cash? Hang on, not so fast... many keyboards and tablets were dirtier than an office toilet seat. Doesn't seem to stop anyone, though.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 29 October, 2014, 12:141 like 1 like

An interesting thing about the Venmo Line is how Millennials are using mobile apps like Venmo to - ahem - get cash. 

http://techcrunch.com/2014/10/03/nimbl-is-uber-for-cash/

There's so much buzz in the US about uncertain economic recovery, stagnant wages, heavy student loan burden faced by Millennials, greater number of Millennials staying with their parents compared to the previous generations, etc. If Millennials are using less cash - and that's a big IF - is that because they're more stingy and / or they have less money in any form?

Brett King
Brett King - Moven - New York 29 October, 2014, 15:54Be the first to give this comment the thumbs up 0 likes

Ah, it must be nice to live in the 1950s...

Melvin Haskins
Melvin Haskins - Haston International Limited - 29 October, 2014, 16:241 like 1 like

No Brett, this is the second decade of the 21st century and this is real. Much as you would like everyone to do things the way you want, reality gets in the way.

Douglas Hartung
Douglas Hartung - Diebold - Houston 29 October, 2014, 16:251 like 1 like

Reduction in cash use?  OK.  Dramatic reduction over the next 20-30 years?  Sure.  I don't object to the underlying premise but the sensationalism is a bit much.  I guess it will happen around the same time as my complete paperless office comes to fruition.  And I'm really struggling to remember the last time I received a bank note coated with bodily fluids!  For me it was the Ebola reference that was a bit off putting, but a great discussion.

A Finextra member
A Finextra member 29 October, 2014, 16:31Be the first to give this comment the thumbs up 0 likes

Most bank notes come coated with sebum, aka a bodily fluid...Cash can be laundered.

Douglas Hartung
Douglas Hartung - Diebold - Houston 29 October, 2014, 16:361 like 1 like

I stand corrected, and will place myself in quarrantine immediately! :-)

 

Brett King

Brett King

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