We don’t know exactly how long it will be before we become a cashless society, but one can definitely see it on the horizon. When that time comes, will begging on street corners and unsolicited windshield washing services at intersections cease? Or maybe take a different form?
If any nation decided to impose a cashless society, the people would simply create their own portable wealth, which would just operate alongside the banking complex. That’s all cash is – portable wealth that the citizenry mutually agrees to recognize.
If just one nation were to go cashless (I’ve heard that Norway plans to), the simplest expedient would be to just use the cash of a neighboring country as picayunes to settle informal debts.
Cambodians now quote all prices in US dollars, paper only, with nearly worthless Cambodian currenty used only for fractional dollar amounts.
I wonder the same stuff about charitable or fund-raising efforts. I haven’t bought a candy bar or bag of popcorn from the scouts/ball team/cheerleaders/etc in front of a store in ages simply because I never have any cash on me. Likewise for efforts like Salvation Army Christmas collections.
A totally cashless society will only happen when we have an easy, portable payment system that everyone can carry, and allows you to pay and receive payment. And that’s everyone, including beggars. Some sort of smartphone or smart credit card, perhaps.
We’re getting close to that point already, with credit card readers that attach to smartphones. Most sellers at farmers markets and art fairs seem to have them now, as well as food trucks.
I like cash in any case, but as a purely practical matter we could not go cashless until personal tablet computer ‘wallets,’ or the equivalent, are so ubiquitous, reliable, and intuitive that transferring money between any two people actually is as easy as handing over cash. How do you give your kid the money to go get ice cream?
You can probably dispose of the credit card reader (even the one attached to the smartphone) and instead send messages directly from smartphone to smartphone.
The question is when everyone, including the homeless guy on the corner, can afford a phone capable of this.
Hasn’t everyone here at one point gone into a store only to find the credit card machines not working or your credit card not working and you have to pay with cash or checks? The cashless society simply doesn’t have the reliability many of us demand.
I don’t think it would really work if people had to pay for the system at all. Why should my ability to give someone money be dependent on their already having a certain amount?
Also, the essential element would probably have to be implanted, or based on a unique biological signature–something that people couldn’t just lose.
How would it affect crime? The drug trade is strictly cash. When I got into real estate, I was amazed at the amounts and volume of cash that is used every day in the business.
I believe organized crime is one thing that keeps cash going.
Looking at this Wikipedia table of cellphone use by country, it appears that in most countries, most people have some sort of cellphone. In India, for instance, there are 81 cellphones per hundred inhabitants. Realizing that some people have more than one phone reduces the penetration somewhat, but then again, very young children don’t need them.
We don’t. There’s been some occasional speculation and discussion about the issue, but it’s nowhere near a realistic assessment.
One of the effects is already seen, but routinely ignored. When you use credit/debit cards to pay for things someone takes a percentage of every penny spent.
That’s because the alternative of using cash also has costs involved. The banks charge money to deliver cash to the stores (especially the coins), the money has to be secured and counted, and there’s the possibility of being held up.
In short, cash transactions are not free.
Those are the costs of wholesale distribution of money. Once it’s in your pocket you get all of it’s purchasing power and so does the seller. The same cash can be spent over and over again without any additional charges. When you spend it electronically either you or the seller is going to pay someone for the privilege of using it.
It seems to me that two of the major problems with a cashless society are electricity and security. There was an article in Wired a few months ago about Sweden becoming cashless, and the people for and against it. It’s worked pretty well so far, with a lot of people using an app called Swish to do a lot of transactions. Bank robberies and muggings are down. But there are still issues, like this:
I’ve definitely been to stores and restaurants that were only taking cash at the moment because the system was down. And I like having cash as backup in case of power failures, which happens sometimes in Houston with our hurricanes and floods. Credit cards are sufficient 95% of the time, but that 5% of the time when credit cards won’t work things could be really annoying or really bad.
Also, from the article, while muggings and bank robberies are down, hacking is up:
I really don’t want to be mugged, but I’d rather be mugged and have $80 stolen from me, rather than my identity stolen and much more be stolen and it takes a lot longer to fix.
Even if everyone does have a phone capable of this, phones don’t always work, or the battery is dead, or the network is down, or your phone gets lost or stolen. If my phone is being weird and Facebook or Google Maps or something won’t work then I can live with it for a little while and try to get it fixed when I get the chance. But if my primary means of paying for things is on my phone and it’s not working, it’s a lot more trouble.
I don’t know if I would go so far as to say that organized crime is pivotal yet in the endurance of cash, but it’s definitely a factor. Human nature however doesn’t change that much regardless of the technology. As long as people want to buy products or services (drugs or sex) that the legitimate society doesn’t want them to be able to buy, some form of potable and untraceable wealth is going to exist. For this reason I don’t see cash ever disappearing.
Mobile Phone payment plans are pretty popular in most of the developing world. There is a small teashop the district courts in Islamabad which I frequent regularly and they pretty much expect you to pay through your mobile. And the average transaction is about the equivalent of 2 or 3 USD.
They usethis mostly.
I never carry cash. Really, never. If I am going to a restaurant or to get my son a haircut, I will make a point of getting some cash for the tip, because I know about taxes and tips, but that’s it.
I keep bags of non-perishable food in my car to give to homeless people. About 1 in 15 turns it down, because they really wants money, but when they have signs that say “Anything helps,” they usually mean it. I seen people take something out of the bag and eat in from my rearview mirror, so they really do want food if that’s what you have to offer.
Once in a while, I’ve had homeless people ask me if I had something like AA batteries in my car, because they need them for a flashlight where they are crashing. I oblige if I can, and I usually do have some in my car emergency kit. Maybe they really want them for some nefarious purpose that is unknown to me, but whatever.
I don’t carry cash, and I haven’t written a check in I don’t know how many years. I have on a few occasions had to get money orders because I needed them for something-- like when I moved into a new apartment, or when I bought a new car, but this comes up at most once a year. I don’t like writing checks because of the lags time for withdrawal. I do all my banking electronically even my rent can be paid electronically.
I’m already pretty much cashless, and it wouldn’t be much of a leap for me.
In short, some cash transactions are not free. Most are free.
In reality there are costs attached to every form of payment, whether it is a direct costs like a processing fee embedded in every credit/debit card system, or a cost of doing business like having to have a system and controls n place to manage cash.
Take my local gas station for example. Yes, they have to pay Visa a percentage everytime I swipe to buy gas.
But, lets say I pay cash. The business has to pay a person to take that cash, they have to have a POS system, they have to have security measures in place for cash, and they have to pay Brinks or similar firm to pick up and deposit cash for them. All of this “cost of doing business” or CODB, is something they have to account for when they set their prices. So yes, you are paying for the option of paying with cash. We all are. Much/some of this CODB would go away in a cashless society.
I never have cash on me. I have an iPhone case that holds three cards, in addition to the phone itself. A drivers license, one debit Visa, and one Amex. That’s all I ever have. I have a little leather pouch in the glovebox of my car with about $10 in quarters in case I ever hit a tollbooth, but that hasn’t been touched in years.