A Case for Cash

Absolutely! There will be segments of certain societies that go almost entirely cashless within a few years, but cash will be a significant means of exchange for decades to come. We may be surprised by some of the places cash refuses to go away too. I'm reminded of the struggle to get rid of cheques (which aren't as old as cash, but date back in some form or other several hundred years). Who would expect some of the biggest remnants of cheque usage to be Americans, French, British and Canadians? (India and Russia are perhaps less surprising). Cash will surprise us at least as much.

When will cash finally be gone?  As each country has their own governance and interests, when they will eliminate cash is up to each of them to decide in their own good time. In the end, nobody can answer the question at the start of this paragraph for any particular nation-state.  

The final death of cash will be a long drawn-out affair. Cash will die a slow and lingering death of a thousand cuts. The death of cash will be a process involving many factors. Technological research, startup companies, software designers, smartphones, computers, the internet, governance, law, regulation and consumer choice, will all play an important part. The pickup of habits by the young of today will pretty much determine the outcome of where cash is headed to tomorrow.  

New consumer habits such as using virtual wallets, contactless debit & credit cards, wearable technology as well as implants under one’s skin; suffice to say that the other killer will be generational change through the uptake of new, efficient, reliable, convenient, safe, and more enjoyable methods of spending your money that are based on financial integrity.

If you were to ask me what would be the harbinger of the end of physical money as we know it, I would point to Denmark’s legislation making the acceptance of cash optional in businesses in specific sectors of their economy from 2016. This was lobbied for by the Danish Chamber of Commerce on behalf of the businesses that they represent nationally.

The Danish Chamber of Commerce cannot possibly be characterised as a radical organisation. Sweden, Denmark and other countries around the world including several African countries, have an advanced or very progressive culture of cashless payments in their own states. This Danish policy of optional cash acceptance by businesses within certain sectors could not possibly have even been suggested, if that country did not have an advanced culture of cashless habits and practices that an overwhelming majority of people have freely taken to by choice.

There is no question in my mind that the Danish initiative is the harbinger of the end of cash, alongside a multitude of commercial, legal, regulatory, political, sociological, criminological, technological, economic, and consumer factors. The combined effect of all of these matters will play an important part of reducing cash use the more that we move towards the future.

Sometime in future cash will be reduced to such an extent that it will engender a plethora of national debate about whether it should be removed by an act of a democratic society. Part of that debate will be a consideration of privacy issues and whether or not the poorer parts of any society will be taken care of without their ready access to cash. In my opinion the end of cash is inevitable and only a matter of time as to when it will happen.      

According to this BBC article from BBC, cash is growing, not dying:

1. In the seven countries ... — Australia, Austria, Canada, France, Germany, the Netherlands and the United States, 46-82% of all transactions in 2012 were conducted using cash.
2. In the United States, cash in circulation grew 42% between 2007 and 2012, and the amount of American money floating around in bills and coins is expected to grow by about 5% each year. The average growth globally is 7% per year.
3. ...card payments in the Netherlands have been growing by about 8% annually over the past few years. And yet, cash is still king. In 2012, there were 2.7 billion card payments, but an estimated 3.5 to four billion payments were made with cash.

So much for the death of cash - it's not only not dying but it's actually growing. All over the world. Even in Sweden and Denmark - "leaders of cashless crusade".