The real value of cash
Most people would prefer to see cash stick around, says Merryn Somerset Webb. But most if us don't want it badly enough.
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).
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
-
UK dividends rose in final quarter of 2025, but share buybacks ate into investor payoutsLast year saw dividend growth continue to fall below pre-pandemic averages, against a backdrop of increasing share buybacks.
-
Lifetime ISA reform: Retirement option could be scrapped in overhaulA consultation on a product replacing the Lifetime ISA is set to be launched this year, and the option to use it to save for retirement is expected to be axed in the shake-up
-
Inflation may be slipping but there is still plenty of misery aheadEditor's letter Inflation may be a little lower than last month as the prices of petrol and diesel fall back, but it remains structural and long-term, says Merryn Somerset Webb. And there are no painless solutions.
-
Beat the cost of living crisis – go on holidayEditor's letter As inflation rages, energy bills soar and the pound tanks, what’s a good way to save money this winter? Go on holiday, says Merryn Somerset Webb.
-
How to tackle rising inflation and falling stockmarketsEditor's letter Inflation is rising around the world. Even though inflation is widely expected to return to around 3.5% next year, it is still wreaking havoc. Merryn Somerset-Webb explains what to do about it.
-
How capitalism has been undermined by poor governanceEditor's letter Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.
-
Don't be scared by economic forecastingEditor's letter The Bank of England warned last week the UK will tip into recession this year. But predictions about stockmarkets, earnings or macroeconomic trends can be safely ignored, says Andrew Van Sickle.
-
The biggest change in the last 17 years – the death of the “Greenspan put”Editor's letter Since I joined MoneyWeek 17 years ago, says John Stepek, we’ve seen a global financial crisis, a eurozone sovereign debt crisis , several Chinese growth scares, a global pandemic, and a land war in Europe. But the biggest change is the death of the “Greenspan put”.
-
The wolf returns to the eurozone’s doorEditor's letter The eurozone’s intrinsic flaws have been exposed again as investors’ fears about Italy’s ability to pay its debt sends bond yields soaring.
-
Things won't just return to normal – that's not how inflation worksEditor's letter You might think that, if inflation is indeed “transitory”, we just need to wait and everything will return to “normal”. But this is a grave misunderstanding of how inflation works, says John Stepek.
