Is cash on its last legs? Are we on an irreversible and irresistible march toward a fully cashless society?
According to a new study, 44 percent of British people say that they would stop using cash altogether if cards were accepted everywhere.
Perhaps not surprisingly, given their digital engagement almost from birth, 62 percent of those aged 25-34 say that they would pay only by card if they could.
The study was conducted by MasterCard and it comes on the back of an announcement from The UK Cards Association that contactless payments grew in this country by 10 percent in January. For the first time, they hit the £2 billion mark in July, up from £1.5 billion in March.
According to the Association, contactless options are driving the growth in card-based payments.
Although cashlessness is in some respects a very attractive option, offering faster transactions and less time-wasting at teller machines, we might want to pause for reflection before embracing a world without hard currencies.
A fully cashless society would arguably boost debt, because by removing the substantiality of physical money, we would further divorce spending from forethought.
Even the most financially careful among us will surely admit to the impact of ubiquitous modern marketing and the temptation toward impulse buying on our spending patterns.
A wad of cash grows less weighty as we spend, which means we have a ready reminder of our liquidity. A credit or debit card does not change weight as we use it, making it easier for us to forget ourselves and cast off restraint.
Binary currencies such as Bitcoin - or subcutaneous payment chips, which some now advocate as a serious alternative to cash - take this one step further. They remove entirely any physical contact with our money.
Removing physicality and weight further encourages people to spend without forethought, raising the prospect of higher personal debt. The growing number of debt-relief charities, not to mention payday loan companies, attests to the fact this is already a problem.
Some proponents of cashlessness argue that using cash increases the likelihood of theft and fraud. In fact, reverting to purely digital transactions makes it easier for fraudsters to hijack valuable pin-codes and other personal information.
In this way, fraudsters not only steal money, they build up identity sketches. ID theft is possible at its current levels only because of our rising engagement with the digital world, including our use of cards.
Cash carries no information at all about its carrier. There’s nothing for criminals to hijack.
For its part, MasterCard has a history of releasing studies promoting cashlessness. This is hardly surprising given that its product is in competition with cash.
Not long ago, MasterCard published a global study in which it rated various nations in the developed and developing world in terms of their openness to cashless economies.
That study, like the one cited above, was apparently based upon surveys conducted with samples of populations.
This is perfectly acceptable practice, provided that in interpreting the results, governments, businesses and consumers don’t forget to factor in the vested interest of a survey’s sponsor.
Using public surveys as a marketing tool is nothing new.
Cigarette manufacturers long used this technique to try to persuade us of the harmlessness of their product. Shampoo companies do it all the time, with their claims that x percent of x hundred people prefer their product.
With today’s strict advertising codes, most of these studies will be run by reputable research groups.
However, the results of any survey can be shaped in part by the type and tone of the questions asked.
If a chain of questions is asked, a general direction can be suggested which leaves the respondent only one real option when it comes to the final and often conclusive question.
A very basic survey on attitudes to cashlessness might look something like this:
Q1. Do you find bank queues inconvenient?
Q2. Would you prefer shorter queues at checkouts in supermarkets?
Q3. Do you ever feel vulnerable carrying cash?
Q4. Do you ever feel insecure using teller machines?
Q5. Do you often find paying with cards more convenient than cash?
Q6. Would you use cards only if you could?
Granted, this is an over-the-top and too obvious example, but the hyperbole is used to suggest a point.
If I were confronted with this survey, it would be difficult for me to answer anything but “yes” to the last question, given that I’ve answered in the affirmative to everything else. Especially if I were approached by a surveyor in a busy shopping centre, when I’m likely to be in a hurry to move on.
The last question is most likely the key question, which will be cited in the study’s results.
That said, there’s no reason not to believe that a growing number of people, especially younger people, wouldn’t mind seeing the end of cash.
However, even if we accept MasterCard’s figures, we also note that perhaps as many as 56 percent of Brits would like to retain the option of using cash. Even among young adults, 38 percent would like to have the same choice.
It is far too early to right off cash. MasterCard’s vested interest should make us wary in the way we interpret this or similar studies.
Moreover, we should consider long and hard the social consequences of making spending even less of a deliberative process than it is today.