On Friday, a problem with a Microsoft third-party update caused chaos around the world. Digital payments stopped working in some areas, supermarkets closed, and even the NHS booking system was affected. The disruption made us realise just how vulnerable our digital systems are. It highlights just one of the reasons why we still need cash in our society.
The Move Away From Physical Currency
In the past two decades, we have moved increasingly away from physical currency towards digital transactions. Companies are moving to cashless payment systems, and some are refusing to accept cash at all. This sets a dangerous and short-sighted precedent. People still prefer to use cash over digital payments for various reasons.
Prezzo, an Italian restaurant chain, has been cashless since the pandemic. It may or may not be a coincidence that the chain posted a £ 31.5 million loss in 2022, but customer reviews frequently criticise its cashless policy.
It is clear that consumers still value cash. A move to a cashless society would isolate many people who rely on it for everyday transactions. In a world that values accessibility, removing cash would seem to make the world less accessible for many people. Here are five reasons why we still need cash and why we should do everything we can to preserve the use of physical currency.
Five Reasons Why We Still Need Cash
Accessibility and Inclusion
According to the World Bank, about 1.7 billion adults globally do not have a bank account. For these individuals, cash is often the only means to conduct transactions. Cash is essential in many developing countries where financial literacy is low, and digital infrastructure is lacking. In the UK, some people still prefer to use notes and coins rather than digital currency. Those with poor vision who may not be able to read a digital console have to place their trust in the system and may be unable to spot mistakes, leaving them vulnerable. Older people often distrust digital transactions, preferring to use physical cash for everyday spending.
Privacy and Security
While digital transactions offer convenience, they also raise concerns about privacy and data security. Every electronic transaction creates a data trail that can be traced, analysed, and exploited. Cash provides a way to conduct transactions without leaving a trail. Moreover, cash transactions are immune to cyber-attacks, becoming increasingly sophisticated and prevalent. The risk of digital fraud, identity theft, and data breaches has made many people wary of abandoning cash.
Reliability in Emergencies
As the Microsoft issue has proved, cash proves its worth during IT outages, emergencies and natural disasters when electronic systems can fail. Power outages, network disruptions, or cyber-attacks can render digital payment methods useless. In such scenarios, having cash on hand ensures that essential transactions can still occur.
Small Transactions and Local Economies
Small businesses and local economies often rely heavily on cash transactions. Street vendors, farmers’ markets, and small retailers frequently prefer cash due to lower transaction costs than credit card fees. For many small business owners, cash transactions mean immediate access to funds without the waiting period associated with card payments, which is crucial for their day-to-day operations and financial stability.
Cash Does Not Require Users To Be Tech Savvy
Technology, whilst often beneficial, is not embraced by everyone. Some people, such as the elderly or those who are not tech-savvy, can feel intimidated by things many people take for granted, such as digital banking. Cash remains universally understood and easy to use for everyone. Some people inherently mistrust digital systems and feel that their money is not safe in digital form. Cash cuts across the digital divide, ensuring everyone can use it regardless of their technical knowledge.
Some companies have pledged to remain cash-friendly. These include Aldi, Asda, Coop, John Lewis, Waitrose, and Lloyds Pharmacy. Hopefully, more companies will join the movement and realise that society still needs cash to function inclusively and reliably.
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