Without any governmental coordination, the share of non-cash payments has been on a steady rise for years, with the appearance of new payment methods. But cash still holds its ground, thanks to its unique characteristics. In an attempt to speed up the disappearance of currency, Visa has launched a new campaign which aims at making small businesses such as restaurants outright refuse cash payments. But the social cost of this economic revolution may be unbearably high for the poor and the destitute.
The call from the homeless man “any spare change?” could be a thing of the past, in a few years. 3 years ago, a Swedish bank took the initiative to make its smartphone-operated credit card terminals available to the homeless, so that they could accept virtual money while begging. The Guardian reported :”Stockholmers can now support their city’s homeless population in the most technologically sophisticated way possible, thanks to an initiative by Swedish payment firm iZettle. [...] iZettle provides a small unit that plugs into the smartphones, allowing cards to be swiped. The card owner then writes their signature on the screen, or enters their pin in the reader.” Cash has been less and less resorted to when making payments, in recent decades, and everyone is adjusting, including the world of poverty. Is the inclusion of the poorer segments of society into the virtual world of finance of any help to them, or is it an attack disguised as a handout?
While poor people tend to rely more on cash, other segments of society use it less and less. Companies which supply systems for non-cash payments have been benefiting the slow waning in cash’s share of the economy. Patrick Collinson says : “Debit card use is up 10% in 2015 compared with 2014, while credit card usage was up 9%. In total, 38.2bn payments of all forms were made across the UK in 2015, including 1.5bn that were made between businesses.” Credit card companies, financial computerized system firms and the likes are so keen to see the trend go further that Visa has launched a campaign aiming at terminating cash altogether: it will select 50 shops amongst its clients and reward them with a sizable check if they start refusing cash payments. Clearly, there is no evil intent behind Visa’s initiative, which is designed solely to increase sales figures, as Visa takes a percentage on each non-cash transaction. However, it is unknowingly helping an urban process which has silently been at work for centuries: gentrification by removal of poor people.
Cashless supporters claim that going cashless would profit the poor, with the following reflection: if cash disappears, then avoiding taxes will be impossible (everything will be on record), then governments would have more money to fight poverty. However, this relies on a very large “if”. As a clue, since the end of last decade US Federal receipts (effectively, the amount of tax dollars collected) has increased by a half-trillion, roughly. And yet, despite the American economy recovering well from the 2008 subprime crisis, poverty levels have risen dramatically from just above 10% of the population to over 15. In other words, while urges to ban cash completely become louder each year, more and more people are bound to rely on cash to survive. So why so much support to the war on cash?
One factor is that decision-makers, at the top of public or private organizations, tend to live in urban centers, where gentrification-through-economic-banning often works quite well. Public officials tend to promote image above all else, when reviewing their mandate. Many are therefore tempted with removing the poor, at the expense of the far more difficult challenge of addressing poverty at its roots. Making city-centers, where the shops are located, cashless outlets is therefore an effective way of making people who rely mostly on cash go somewhere else. As for private decision-makers (or supporters), the disappearance of homeless people from a neighborhood can have a dramatically positive effect on the value of their real-estate.
The war on cash, should it come through and ban currency, would be a social disaster for poor people, according to many NGOs. Dominic Frisby warns us of dangers and injustices of a cashless society : “It also has its uses for private transactions, for which there are many possible reasons, and by no means all of them illegal. Small businesses starting out need the cash economy. Poor people need the cash economy. The war on cash is a war on them.” The sisters of Saint-Joseph, a poverty-fighting charity in Australia had the same assessment in recent years, when the Australian government tried to force Aboriginals and other poor categories into the cashless world by handing out allowances on state-controlled debit cards :”Just one of these Interventions to Aboriginal people on Social Security was the BasicsCard. Later, chiefly to technically comply with the Racial Discrimination Act, the 50 per cent cash-quarantined card was spread to include other poor Northern Territorians [...] Living as a poor person with so little available cash has many difficulties. There is also the shame of using the distinctive grey card with the name of the for-profit operator, Indue, emblazoned upon it.”.
Few people doubt that an entirely cashless economy would be, in some ways, a technical advantage. But in a day and age where societies around the world are realizing that placing economic profit and performance ahead of all other matters is what causes inequality and imbalance, Visa may be accused of missing the forest for the trees. While a cashless world may bring ever more safety and convenience to the rich and the middle-class, it may definitively exclude the poor and the elderly, two categories of population who rely on cash, for lack of access to the computerized world.