Is Cash Still King? – Wednesday Blog by Seán Thomas Kane
Over the last week, I’ve been thinking about how much I still use cash, and what that says about my lifestyle as a whole.
One of the chief ways that ordinary people would interact with their government was through the coins or banknotes in their pocket. We get to know the faces on our currency better for that role than for the things they did that got them printed onto dollar bills or Euro coins. Many were probably more familiar with the late Queen because her face was on the currency in the United Kingdom and all the Commonwealth realms more so than in any other fashion.
Yet, in the last five years, my cash usage has dropped significantly from a high around the mid-2010s when I used it more than my cards. Today, when I go to the bakery or when I buy concert tickets, I do so digitally. I prefer to use contactless payments on my phone over any other for the ease of use, and the security of not having to pull out my wallet in public. Still, I realized early on last week that this was a question better answered by more than one mind.
So, to answer this question, I turned to my Patreon supporters (only $5 a month at patreon.com/sthosdkane) to ask them how much they still use cash.
One of my Patreon supporters who agreed to talk to me this week was regular Wednesday Blog film expert, Alex Brisson who offered a few thoughts of his own from his home in New York City.
How much do you still use cash?
SK: When I moved to Binghamton, when I was going out there to go look at an apartment in May of that year, my Dad gave me $50 in $5 bills and said “Go, drive to Binghamton,” we were in Niagara Falls, “go, drive to Binghamton and find an apartment and be back here by tomorrow to catch the train to Toronto.” And that was the last time I ever used cash for tolls. Traditionally, I’d use cash for tolls, taxis, and really small family run Chinese restaurants. So, let me ask you then: how much do you still use cash?
AB: Almost not at all, extremely rarely. Unless it’s an arcade game that only takes cash, or once in a while the street hot dog vendors in New York only take cash, which is a big mistake in my view, and sometimes there’ll be one cart that takes card next to one that takes cash will get all the business. I’m making constant financial transactions; I’m buying things every day. New York City is just a big shopping mall. I use Apple Pay the huge majority of the time, unless a place doesn’t accept it.
SK: Yeah, it’s much more secure than even using your card. You don’t have to pull your wallet out, and also the encryption of the card number helps.
AB: Yeah, and also there are those machines that can steal your card number going around, so Apple Pay is more secure against those, though Apple Pay might be just as easily compromised, I don’t know. Definitely, money has gone from being a physical, gold-backed thing but now money is purely digital.
One of my Patreon supporters is closer to home, and we were able to do an in-person interview. – “Hi, Mom!” – “Hi, Seán!”
SK: How much do you still use cash?
ED: Very little. I carry maybe $20 for an emergency, but I rarely use cash.
SK: How much do you still use cash?
GV: Not as much as I would like to.
That’s George Vial, who spoke to me from his home in County Donegal, Ireland.
SK: So, you would prefer to use it over card?
GV: Compared to using it over card, the inaccessibility of getting to an ATM is probably the biggest drawback. Today, I had to pay a guy working on a car, and to find an ATM that would dispense the amount took two different trips, so I eventually got him the money. It would’ve been easier if he had taken a bank card, but that was the first time I used cash in almost two weeks.
Do you prefer cash over card or vice versa?
SK: So, you prefer cash over card, I get that. When you’re in the US do you use cash or card more than in Ireland?
GV: I use more cash than card in America, and vice versa in Ireland for one simple reason: Euros don’t fit in the wallet, they were never designed for wallets, and the amount of coins over here is too much. If you go out with €100 your trousers are falling down by the end of the day.
SK: Yeah, I stopped carrying a coin purse. The trouser leg didn’t look right with that in there. What do you think are the benefits to your preferred payment method? You talked about a couple of the drawbacks of using cash in Ireland, what are some of the benefits?
GV: The benefits of cash are that you stick to what you have. When you do digital payments you tap your card, while in America it’s still a lot of swiping. Here there are no minimums to how much you can spend by tapping, so you spend more freely, whereas with cash if you have €200 in your pocket that’s how much you can spend.
SK: Do you prefer cash over card or vice versa?
ED: I prefer to use a card or to actually use Apple Pay so I don’t have to pull something out of my bag. Although, at restaurants in the US you have to give them your card and they take it away from you to run it whereas in Europe they run your card for you there at the table.
SK: I’m starting to see more places in the US where they do have the portable card reader that they bring around, or even the big chain restaurants that has the machine at the table that you can play games on and also use to pay at the end.
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AB: Money has gone from being a physical, gold-back thing, and I guess the gold is still somewhere, and now money is just a number on a screen.
SK: So, the value of the money has gone fully abstract then, in the last 120 years. So, now instead of being valued off gold it’s an abstract concept. So, what do you think are the benefits to your preferred payment method?
AB: Mainly that I no longer carry a wallet. I have my phone and there’s a little pouch on the back where I carry my cards. I’ve consolidated the things that I carry in my pocket, and as a man in New York City your pockets are prime real estate. Another one is the convenience of my phone being my payment method. Unlike cash, it can’t get wrinkled or blow away or you can’t really steal my Apple Pay. It doesn’t have to be replaced all that frequently like a credit card does, and because it’s contactless it’s safer in terms of transmission of germs and things. During the pandemic we realized we’re passing around all that dirty cash. The main people here who use cash are homeless people because they need you to give them cash, but if you don’t have cash on you then you circumvent that, which is kind of a low thing to say. And, also unlike with cash not carrying around a finite amount of it I can access all of my funds potentially, not instantly but nearly instantly if I shuffle things around.
What do you think are the benefits to your preferred payment method?
SK: So, then do you see any benefit to using cash over card?
ED: I suppose if you don’t want your purchase tracked then that’d be a benefit, or if you’re going to a farmers’ market, but even those will take cards. There are a few places that are cash only but they’re few and far between now.
SK: And inflation has impacted that now, because you have to use more cash to buy stuff now. I remember when I was little you could get a candy bar at a gas station for less than a dollar, and now it’s probably close to $2.
SK: What do you think are the benefits to your preferred payment method?
ED: It’s more secure, if my wallet were stolen I could stop the card immediately, any of the cards I carry. The same cards work globally, so I can travel and not make many changes. It’s the convenience and the security, although I will say back when I carried cash I had a budget for discretionary spending per month. With a card it’s much harder to do that. It’s really easy to spend more with a card.
SK: When I lived in London, I found it was very beneficial to only use cash if I could because I could control my spending, whereas with my card and contactless it was very easy to buy stuff.
ED: It’s something we all need to figure out how to manage our lives now. I spend a lot more time in the bank app on my phone than I used to.
SK: I found that when I went overseas this most recent time in October that I’d get Pounds and Euros out but this time I used my card everywhere, so I never needed to stop by an ATM, and that was bizarre, even going into the Tube in London, like with OMNY in New York, I just used my phone to get in, and that’s a new thing just within the last 5 years. In New York, you used to have the MetroCard instead.
AB: You’re right, because the Apple Pay and credit card transcend borders. You can use it anywhere in the world. You don’t have to convert your cash.
SK: That was a huge realization, because I realized when I got there that I forgot to get cash out, so I started paying for things with my Apple Pay and quickly realized that I wouldn’t need to get cash out at all. I got to Brussels and paid for my first croissant and thought, “wait a second, I don’t need to get cash out here.” Yeah, that was a big benefit to it. Then, do you think cash will fully ever disappear?
Do you think cash will ever fully disappear?
SK: Yeah, so you’re doing the mental math and figuring you’re borrowing from a future paycheck to pay for this. Do you think cash will ever fully disappear?
GV: I know they’re going to try, the banks of the world, but I don’t think it will. All it will do is create more of a digital black market, so it’s everything from the criminal black market to paying all of the little cash transactions of paying the babysitter or paying the car guy which they’ll be able to monitor, so they should just leave cash as it is.
SK: So, cash in Europe it’s coming out of the European Central Bank (ECB), whereas here it’s coming out of the Federal Reserve and the Mint, while when you’re doing a card payment it’s going through Visa, MasterCard, or Discover, or American Express, or take your pick. Do you see a way that it could be problematic that those particular financial corporations would have that much of a role in our everyday monetary transactions whereas previously it was a public enterprise that was managing it?
GV: Oh, yeah absolutely because it’s throwing the control of our money to these for-profit corporations, it’s totally wrong, and we know behind the scenes the amount of charges, there’s a meme going around talking about how to spend $100 locally, yet to spend that $100 digitally the amount of transactions and fees that go on makes it all very convoluted. I’m not a fan of the big companies tracking our money.
SK: Yeah, I absolutely get that.
AB: My immediate answer is that I’m not properly educated enough to truly venture a guess at that, that said it does feel realistic to think that you could have a post-cash society. That feels very feasible in my mind at least. There’s also this aspect that you only print so many dollars, or that you could track that digitally anyway. I bet we’re shipping a lot of gold and huge stacks of dollar bills from place to place, I bet there are people who are spending time counting money. And we’re handing over a lot of our societal things to computers these days, yet this is a logical usage of this.
SK: I only hesitate with that in 2 points: Jackson County, Missouri’s systems were hacked with a ransomware attack, and the systems were shut down for a while. Having all of your money going through computer systems leaves them up to attack in that sort of hack. Secondly, having your money going through a computer system means that every transaction you make is processed by a financial institution like Visa, so they are getting a cut or have some arbitrary control over the transaction. So, does that give them too much power?
AB: There’s also the data tracking aspect of this too. The thing you were saying about how it could be hacked and disappear is true for any form of currency. There’s an episode of The George Lopez Show where his mom keeps all of her money in a safe under her bed and there’s a house fire and all of it burns. So, is there a truly safe form of currency? I think the answer is no, there’s not. You can hope that each version is more secure, at least digitally there’s a record of its existence. So, if your bank gets hacked then there’s a record of what the bank owes you. Digital money then might be more secure. It’s truly hard to say. It’s scary, the new digital world is scary in a general way, I would say, and things are changing so rapidly. The minds of this generation, and all who are alive right now are struggling to keep up with it all.
SK: Do you think cash will ever fully disappear?
ED: Maybe. It’s expensive for countries to print bills or mint coins, I don’t know. I wonder what the percentage of people are that use cash? You can’t use cash at the new Kansas City Current stadium (CPKC Stadium). So, the more places that refuse to take cash the less we’ll see people using it.
SK: Some countries that I’ve heard about that have dropped cash all together, like Sweden, it’s because the Kronor there has so little value that you’d have to use a lot of it. During my four hours at Arlanda Airport in Stockholm, I paid 200 or 300 kr for a burger there at Max’s Burgers, I thought that was a lot but it’s actually around $10. So, will inflation impact how much cash we use?
SK: Because cash is controlled by the Treasury, with card transactions those are all done through the big companies, does that give those companies too much power over our national economy or our global economy if they’re the middleman in every transaction?
ED: I know bank transfers are still monitored by the Federal Reserve. Cash was just the vehicle to exchange for goods and services, right? So, you’re still doing that exchange, it’s just happening in a contactless or a low-contact manner.
Is cash still king? I don’t think so. I could see how it might return to its former position of prominence if we had massive technological failures, yet that seems remote and unlikely. I do agree with George about the need to have better monitors on the financial institutions that house and monitor all of our digital transactions, though. I wonder if the cultural role that cash plays as our symbol of prosperity will change? This, like many questions I consider here on the Wednesday Blog, remain uncertain in their answers.
Wednesday Blog by Seán Thomas Kane 