For the last two plus years, I have often used my iPhone as a cashless device to buy things. Everything from coffee to petrol, supermarkets to car parks. I realised I was gradually becoming completely cashless and in this blog post, I ask if it is such a good idea or not.
I admit it. Being almost cashless is still a novelty, just like using my iPhone instead of cash. It’s so easy! I simply hold my phone near the card reader, see my bank card appear on the screen and use my thumb print to authorise the payment. Within a second a little ‘tick’ appears and this is accompanied by a little ‘ching’ sound. All good. Never has spending money seemed so easy. There isn’t even a limit, compared with the default £30 on a normal debit card (anymore than £30 has me scratching my head and fumbling to remember your PIN).
Let us consider some of the advantages which might include:
- it is just so easy to use a smart phone to pay for things. It is only a matter of time before I have a smart watch and then it’ll be even easier!
- carrying coins and notes is a faff these days. They still end up in the washing machine and between the sofa cushions
- making contact payments using a device feels secure through using my thumb print – no need for a PIN which can always be stolen
- I can still toggle between different accounts and the transaction is instant
Before I get completely swept along with the novelty and ease of being cashless, it’s worth considering who is really benefitting here.
Think of the times in a supermarket when you have been steered towards the self service checkouts by a helpful member of staff, suggesting it is more convenient and quicker for you. A step further is the smart shopping approach, where we scan as we go (when it comes to legging it out of the supermarket, this is even faster).
We might be nudged in that direction for sure, but is it really for our convenience or perhaps the ultimate benefit is for the supermarket? They can lower their costs without having to employ so many staff, customers can pay for their shopping much faster and then the supermarket can accommodate more shoppers to spend even more money.
Then there is data. Just as supermarkets will then understand more about my spending habits and be able to exploit that, the same is true of banks. Through the increasing shift towards electronic transactions, they understand more about the financial opportunities which they hope to fulfil through selling more financial products, or perhaps weeding out the less profitable customers. And of course they too can lower the need for costly High Street physical banks with expensive staff by driving us away from cash and cheques.
You could argue banks are like Google. Or Amazon. Google and Co must know so much about me through the things I might search for and when, what I “like”, how much social media I interact with and not to mention Facebook with their slightly sinister algorithms. Starting to sound a bit “big brother-ish”?
Then there must be a few other disadvantages too. In mulling this post over, I took the step of asking my Facebook friends what they thought about being cashless. Most liked it but there are still quite a lot of reservations which include:
- being cashless makes it easy to lose track of spending
- makes it harder to strictly budget our money, from week to week, month to month etc
- money becomes less “real”
- it is harder to teach our children about money without real coins or bank notes and actually using them in real life
- what about market traders, the gardener, the window cleaner?
- what about buskers?
- what about giving a present at Christmas or for a birthday?
- what about rural communities without banks, post offices or ATMs? They are forced to become cashless whether they like it or not
All this cashless lark depends heavily on technology and power. If we lose a wallet, that’s bad enough. But to lose a smart phone which you’re increasingly dependent on creates a big problem. Even worse if our devices get hacked, Wi-fi goes wrong, 3G, 4G or whatever G fails, we are in big trouble.
Perhaps the Coronavirus outbreak will be teaching us many things, including how the unthinkable can happen.
Systems can – and will – eventually fail.
It will be in those circumstances when having a little cash will seem such a lifesaver.