How the Commodification of Payments Threatens Financial Freedom
May 24, 2023
The exchange of money for goods and services is a pillar of societies and economies worldwide. Given this pivotal role, payments should be usable by all, at no extra cost. While this seems like common sense, many cashless options tick neither box, while the use of cash—which ticks both—is being discouraged.
Tristan Dissaux, a socio-economics researcher at Belgium’s Université Libre de Bruxelles, recently explored this issue in an article for The Conversation. He opens by noting that while individually, there are advantages to increasing payment digitisation, it ‘does not necessarily translate into a vision of a desirable future for society as a whole.’
Given the central role that payment services play in our societies, they should be universally accessible and mainly free of charge for their users.
Citing data from a Europe-wide study of consumer attitudes to payments, he notes 55 percent of people believe it is important or very important for cash to remain an option in future. In France, 83 percent of people are worried about the disappearance of cash but just 10 percent of transactions use it. Why is there such a gap between what people say and how payments are being made?
Dissaux explains the digitisation of payment is not just a technical development, but rather part of ‘a greater commodification of the fundamental element of money’. Payments themselves have become another way to make money, with direct charges (e.g., surcharges added to transactions by card companies) and indirect ones (such as collection of personal payment data that can be sold to third parties). Digital payments also remove the anonymity offered by cash, meaning companies and governments have the opportunity to track and even permit or disallow payments. Modern transactions have thus become ‘a political and social issue’.
Cash is universal and free to use. It ensures financial and social inclusivity, safeguards freedom of choice and acts as a public good. It cannot be monetised by third parties in the same way digital payments are, meaning there is little incentive for financial institutions to promote it, and many reasons to discourage its use.
Ultimately, to ensure everyone has access to payments, and can transact in a way that suits them, the preservation of payment choice is key, and cash forms an integral part of this.
[Payments] are increasingly subject to commercial management, guided by profitability principles that limit their accessibility. This poses a risk to the legitimacy of our public institutions—to which money is always fundamentally linked—and to the trust we place in them.