The real value of cash

For how much longer will you have cash in your wallet? If Visa has its way the answer is not very long. Cashless transactions are more convenient, says the payments network. They’re also more secure. What’s not to like? Particularly if you are a small business and Visa gives you $10,000 to refuse to take cash (see page 30); or if you are an ordinary person who never quite gets around to going to the cash point (me).

I’m in Cornwall at the moment. Usually when I am here I find myself endlessly tripping back and forth from the cash point at Asda to get cash. No more. Everywhere that only used to take cash now takes cards as well – and in most of these places I can pay contactless. So I do – for coffee, for ice cream, for pasties and for postcards. In 2017, pretty much the only things in the entire county anyone still pays for in cash are the shells on the quay in Charlestown Harbour (pound coins in an honesty box) and beach car parks (cash in a pay and display).

Not long now and hanging out south of the Tamar won’t be that different to hanging out in Beijing (in payment terms at least). There, in urban areas at least, says Paul Mozur in The New York Times, cash is “rapidly becoming obsolete”. Three years ago everyone used cash for everything. Today, go to a restaurant and the waiter “will ask you if you want to use WeChat or Alipay – the two smartphone paying options (run by Tencent and a subsidiary of Alibaba respectively) – before bringing up cash as a third remote possibility”.

Even buskers have rejected cash: instead of hats to collect coins they have boards with QR codes that allow passers by to transfer tips to them directly. The result? China’s mobile-payment market is now 50 times that of America’s (although it is worth noting that the US payments market is remarkably backward).

Where will this all end? Exactly where Western politicians and central bankers want it to. They all hate cash. The Bank of England reckons it makes monetary policy harder to manage (we can avoid negative interest rates by hiding cash in safes in our basements). Politicians reckon (quite rightly) that it facilitates tax evasion. And they’d all like to ban it.

We have long been firmly against this idea: without the option to use cash – and with every transaction recorded – how can anyone anywhere ever have any privacy from the prying eyes of data collectors (in both the public and private sector)? But here’s the problem. Last year Andy Haldane, chief economist of the Bank of England, suggested banning cash. He later said that it probably wasn’t worth the effort of legislating against it – cash would probably disappear all by itself. And it is starting to do so.

We all think we want to hang on to the last vestiges of our privacy. But we clearly don’t want it enough to brave the Asda carpark. Which is a shame.