Life without cash



Today, the bbc news website mentioned that some UK festivals may go cashless.







This makes me wonder:

(A) is this part of a more general move towards a cashless society?
(B) if so, is that a good thing?

Are we moving towards a cashless society?

There was a survey commissioned by Visa USA in 2007. It suggested that 79% of Baby Boomers and 74% of Echo Boomers believe that our society will one day operate without cash.

But then I suppose it would be in Visa's interests for people to believe that.



On the other hand, a study carried out for ATM operator Bank Machine in 2009 suggested that Britain would "never" evolve into a cashless society because of the "psychological impact of the recent financial crisis".

Sounds like a bit of a hefty leap of reasoning if you ask me.

So what do I think then? Well, the proportion of transactions that are paid for by cash currently seem surprisingly high. Or it surprised me anyway.

An article in the Telegraph suggested that 40% of payments are made by card, and given that fairly few transactions happen by cheque, most of it must be paid for by cash. I would have expected a higher proportion, especially given that it's weighted by the amount paid in each transaction.

I do suspect that the proportion paid for by card will increase, especially if "contactless" systems progress, which will make payments for small items quicker and easier.

But I would be surprised if we were ever entirely cash-free.

Would a society with fewer cash transactions be a good thing?

The Telegraph article I quoted earlier suggested it would. But then that was the views of the executive vice president of Visa Europe, so there's bound to be some bias there.


I read about a study which got two sets of people to bid for tickets to the see the Boston Celtics play. One set of people were told they had to pay by cash. The other set were told they had to pay by card. It turned out that those who paid by card bid twice as much as those who paid by cash.

To my mind, this supports the claim that people are more likely to spend money unwisely when paying by card.

Don't get me wrong - I recognise that there are advantages to payments by card. Indeed I tend to use them myself.

However, we've already seen unwise borrowing and lending get us into a credit crisis.

Could a trend towards more card-payment transaction encourage more volatility in consumer spending, debt, and the rest of the economy? A worrying thought if it's right...