Universal, Foolproof, Anonymous: Why Cash is Here to Stay
Cash is anonymous, stable and widely accepted, and in many countries there’s more of it circulating than ever despite the rise of cashless payment options. The reasons why are explored on a recent episode of The Quartz Obsession, a podcast offering fresh takes on everyday ideas in the context of the global economy.
Opening the discussion, show host Kira Bindrim highlights the chief characteristics of cash that lend it an enduring popularity and, ultimately, make it well worth protecting.
Even as digital payments increase, there are more coins and bills in use than ever before. Why? Because nothing—not even cryptocurrency—is as universal, foolproof and anonymous as cash.
Finance reporter John Detrixhe notes cash is at a paradoxical point where it is used less for payments in many countries while simultaneously being more popular than ever. Its reliability and tangibility make it a reassuring store of value and the number one choice for emergency payments when other options may be unavailable.
Detrixhe also highlights the trust that cash inspires, meaning it remains a more popular payment option in major economies such as Japan and Germany. Even in China, where urban centres are becoming increasingly cashless, rural areas continue to see high cash use.
Ultimately, he notes, people will use the payment option that’s most convenient for a given purpose. When people do choose cashless payments, cash still serves an important function, since it provides a backup when other options fail, whether due to an error on the part of the payment provider, an internet outage interrupting the transaction, or even user error such as forgetting a PIN or not having topped up a mobile wallet.
One of the pros to using cash is we can just do it. I don’t need to have electricity, or a computer. I don’t need to figure out whether [the vendor] accepts Visa or MasterCard or Alipay… And I can do it privately.
In conclusion, Detrixhe points to the way in which cash serves democracy as another strong argument for its continued relevance now and in the foreseeable future. Thanks to the lack of oversight when paying in cash, he explains, it provides ‘a counterweight to government influence’. This and its other unique properties suggest that while its usage may decline, it will continue to serve an important function in the payments landscape ‘because it has certain properties you just can’t reproduce digitally.’