Spotlight On Going Cashless: Never Forget Cash is King
I support government efforts to ensure cash is maintained alongside digital payments
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Cash use is down, but how can we ensure it doesn’t go down for the count, with a mere 16% of all payments made globally at the point of sale? (stats HERE)
This OECD paper examines governments' policies to prevent cash from slowly disappearing. I support all of them, particularly enforcing the acceptance of cash!
Many with experience in Sweden, China, or big cities anywhere believe cash will become as extinct as dinosaurs.
To all who think this way, I say: “Not so fast!”
Even as the author of a book called “Cashless,” I do not believe that a world without cash is a good thing.
Signs from the UK stating “NO CASH” in coffee shops upset me, even if I never have cash in my pockets in Shanghai.
Governments like cashless Sweden recognize the need to promote cash, and a recent government publication, “In case of crisis or war,” tells citizens they should have cash at home. They recommend “enough cash for at least one week, preferably in different denominations.”
This is a good idea, and floods in China a few years back that knocked out cell phone towers proved how fragile digital payments can be!
As a cashless leader, China also mandates that cash be kept in stores, with spot inspections and occasional fines for shops that do not accept cash. Unlike Sweden, there is no need for government warnings. Everyone knows to keep some cash at home to preserve the tradition of giving “hong bao” or red envelopes as gifts.
Cash still works. It took my local Shanghai coffee shop 15 minutes to find the change, but when a foreign guest wanted to buy me coffee with cash, they could!
The argument for maintaining cash often focuses on the vulnerable and digitally challenged, as best exemplified by the elderly.
In Shanghai, food and other shops with elderly clients always keep a cash box, unlike my more gleaming and expensive coffee shop.
Surprised to hear me support cash? Never forget that cash is king!
👉Addressing Access to Cash (highlights)
🔹 National policies or strategies
➣ National cash strategy initiatives to ensure continued cash circulation are underway in the UK, Ireland, France, Finland, Australia and Poland.
🔹 Enforcing the acceptance of cash as a form of payment
➣Countries that enforce acceptance of cash: Australia, Belgium, China, EU, France, Italy, Slovakia, Spain, US.
🔹 Ensuring availability and provision of cash (including both legislative and regulatory initiatives as well as industry-led initiatives)
➣Sweden, under the Payment Services Act, required the six largest banks in the country to provide withdrawal services for private individuals.
➣The Post Office in the United Kingdom signed an agreement with a group of banks and building societies to provide cash withdrawal services, as well as basic banking facilities.
➣Hungary issued a new Banknote Decree in February 2023, defining the ATM network's minimum size.
➣Three large banks in the Netherlands collaborated on a joint ATM network to keep cash available. (Personal note: it was hard to find a cash machine there last year when I wanted to give kids cash presents!)
🔹 Expanding the regulatory and supervisory powers of oversight bodies relating to access to cash.
➣The UK Parliament asked the FCA to ensure access to cash through maintaining a network of cash services and facilities so that people reliant on cash for payments can withdraw and deposit cash.
➣Central banks in the Netherlands and Ireland have had their responsibilities altered to include responsibility for access to cash.
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