Many pundits have commented on the possibility of cashless societies. Some countries are trying their utmost to bring this to fruition now. However, there are conflicting notes online when you try to look further into the issue.
Banks are closing branches as they do not have the sheer volume of cash moving through them they were accustomed to. The business model for banks changed recently anyway, and we went from imposing, glass sliding, hidden tellers, to many less tellers, more open, and accessible. But walk into any branch now and you are greeted at the door by a friendly assistant, ready to direct your query. Possibly to one of only two tellers on the floor that day. Gone are the six or seven windows, with more office staff on hand to jump in if the queue became too long, and customers too disgruntled. And now we move from smaller branches with one or two tellers, to half of the branches shutting down completely.
The Reserve Bank of Australia can attest that there is still plenty of cash in circulation despite the prediction. There might be less of it, but cash is still king. In 2018, RBA Governor Philip Lowe spoke about the paradox and claimed that for every Australian, there are about thirty $50 notes, and fourteen $100 notes in circulation.
In the UK and some European countries that are phasing out money, there are claims older persons and vulnerable people would struggle with going cashless. Older generations are not as tech savvy, and carrying cash has always been the norm. Old habits die hard type of mentality, and many people are reluctant to adopt new procedures. People with lower incomes might not qualify for credit cards, and so the need to carry cash will always be there for them.
Then don’t get started on what happens when the power goes out! When all transactions are dependent on internet and online access, having systems offline can have an immense impact. Whether the electricity cuts out and stops the merchant receiving payment, or your phone battery dies, and you can’t access your account quickly, either can result in popping out for a few groceries, or lunch, and returning empty handed. Phone lines going down = no internet access to banking.
Only last year a certain Big 4 apologised as a major system outage left customers out of pocket. BPay, internet banking AND their app were all down for nearly 24 hours. Customers at this time were unable to pay employee wages, pay for taxis upon destination arrival, or buy groceries.
You can Google “online banking access problem” and see a dozen pages of banking institutions how-to guides on how they can help. Perhaps online banking doesn’t work on certain browsers, or the system crashes repeatedly for unknown reasons: one major bank going down twice in 48 hours in 2019.
Meanwhile, cash in transit businesses have had a bit of an increase as people are unable to travel to their closest branch. Employees having to bank the takings cannot lose time in their busy days driving half an hour to get to a bank, and that’s in metro areas! Whereas a manager might have let one or two staff pop out down the street to do the banking and perhaps grab a coffee, now it’s too expensive to pay an hour’s wages for them to queue at the only branch left in the area.
There is also an entire industry dedicated to producing and selling tamper evident bags for banking. This industry has exploded, and whereas there were originally only a few suppliers for carrying cash securely, there were seventeen suppliers reported in the recent Cash In Transit Bags Market Outlook. So the trend here seems to be that there is enough cash being transported to warrant multiple companies producing competing products.
Realists are looking at spending trends. Canada knows that cash is faster than card purchasing, and they can’t see a future without cash. A lot of people also shy away from online payment systems, having a mistrust of information storage. Fear of having details hacked and lost can lead to many just not trusting payment providers online.
A lot of smaller stores cannot afford the bank fees associated with providing EFT machines for customers. These are becoming the rarer, anti-EFTPOS shops, but they exist. There are shops you can now visit that only take cash and not cards. The horror! These are more common in regional areas, so be prepared when travelling to have to reach over the counter with cash in some places. Definitely research before you travel.
So, although for the most part we are all happy to go with the trend of moving away from cash and using cards or online payments for everything, it may be that we can never rid ourselves of cash. Whether our older generations or lower income earners rely on cash, or whether mistrust of privacy might lead to insecurity with internet access to your accounts, there are too many reasons to think that we can do away with cash anytime soon.
