Beyond the Binary of Cash or Cashless
Apr 22, 2024
Payments are often presented as a binary choice—between cash or cashless—but the truth is that societies and individuals benefit most when both are in play, ensuring freedom of choice and supporting economic inclusion and resilience.
In the wake of technical failures that saw McDonald’s across Asia-Pacific and beyond unable to process cashless payments, and UK retailers Greggs and Sainsbury’s suffering similar problems the following day, The Fintech Times asks: ‘can the future really be cashless?’
Cash could be making a comeback. No really. After years of pushing to a fully digital payments landscape… it could all come tumbling down after a series of technical issues that has seen major retailers unable to process card or contactless payments and once again relying on notes and coins.
Cash doesn’t crash. There are no barriers to using it—no bank account or technical knowledge required—and its physical nature means it’s incredibly easy to keep track of, leading to it becoming a popular ‘life hack’ for people seeking innovative ways to manage their budget. At the last PAY360 Conference, Jessica Richards, Head of Market Development and Payments at UK bank NatWest noted: ‘while cash is in decline, its usage is actually going up in the younger generation’ largely thanks to this trend.
So, should everyone cut up their plastic, delete their payment apps and get themselves to an ATM? Clearly this is also not the answer, with cashless options bringing their own advantages to the table and competition between all payment options meaning consumers get the best deals possible. The answer is for governments and businesses to empower people with choice, and ensure cash is accessible and usable.
Access is the key issue for governments and banks, with Australians recently expressing outrage over the Commonwealth Bank’s plans to go cashless. While the story turned out to be fake, the increasing struggle to access cash services is very real, with new research published by payment technology company Waave showing 71 percent of Australians are concerned about society going cashless, with 63 percent believing it would exclude many population groups and exacerbate economic inequality.
Whether you’re younger or older, the psychology around cash is unique. We like the feel of it, the sense of control, and we tend to spend less when we pay in cash.
Usability—ensuring consumers have the option to use cash—is also a matter that can be legislated on by governments, but businesses too have a responsibility to make their goods and services available to all. Supporting cash payments also benefits their bottom line, with many of the McDonald’s branches struck by cashless outages turning to cash payments so business could continue.
Ensuring consumers have the option to use cash is a matter that can be legislated on by governments, but businesses themselves have a responsibility to make their goods and services available to all. Supporting cash payments is also very much in their own interests: it benefits their bottom line, as evidenced by many impacted McDonald’s branches turning to cash so business could continue.
We are told that going cashless is super convenient… but when card systems crash these businesses can’t seem to cope, and they don’t have adequate backup procedures in place to accept cash payments. Secondly, people who don’t carry enough cash are increasingly left high and dry and can't pay for their goods. My advice would be to always carry cash because cash doesn’t crash.
Harrison concludes that: ‘as wonderful as the conveniences of modern life can be, they can all come crashing down at the mercy of something as simple as one failed software update.’ The solution for equality, freedom of choice, competition and resilience is to throw away notions of cash as a thing of the past and embrace a future payments landscape that benefits from the strengths of both cash and cashless.