A cashless future? Sounds like a dream but don’t be fooled

https://www.theguardian.com/commentisfree/2016/oct/21/cashless-future-apple-tim-cook-smartphone-apps

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The tooth fairy is dying. Soon, there will be no more scrabbling under pillows in the middle of the night; no more wondering what to do with a tiny molar, swapped for the traditional pound. (Chucking it in the bin seems heartless, keeping it faintly grisly.) But although my nine-year-old is reaching the limits of belief in fairies, it’s not just the magic that’s fading. It’s the habit of carrying cash.

By 2025, three quarters of payments in Britain are expected to be made without notes or coins. We’re not quite Sweden – where even street beggars are starting to take plastic, via card-readers handed out by charities – but we’re moving in the same direction, towards a world of tapping contactless card to reader and paying by app, and who knows what else besides.

This week the former Barclays chief executive Antony Jenkins predicted the end of banks as we know them within two decades. What’s the point of these antiquated vaults, he suggested, when all that’s really needed to underpin the movement of wealth around the globe is a vast electronic ledger tracking who’s worth what, and some nifty apps for shunting it between us?

So by the time my son grows up perhaps pound coins will be for ceremonial uses only, like silver sixpences stuffed in a Christmas pudding, and kids with gappy smiles will simply swipe left on the tooth fairy app. But I can’t help feeling we’ll miss real money when it’s gone. For if cash is, as the saying goes, cold and hard then life without it may be more so.

The under-30s increasingly seem to regard forking out actual coins as akin to bartering with seashells

No more saving coppers in jars, dropping spare coins in charity boxes; no cash means no change, the end of that faint illusion of getting something back on the transaction. And the mind boggles at how men will mark their domestic territory, once they can’t leave small slagheaps of coins on every recently cleared surface in the house. But the bigger question here is who exactly a cashless society is designed to serve.

Last week in Japan, Apple’s CEO, Tim Cook, once again spelled out the company’s aim to wean the world off cash, preferably in favour of using the Apple Pay app to buy everything via their smartphones. And while his airy insistence that “we don’t think the consumer particularly likes cash” might be true for the under-30s, who increasingly seem to regard forking out actual coins as akin to bartering with seashells, it should set alarm bells ringing for the rest of us.

It’s not just that people tend to spend more freely when the money feels abstract, just numbers on a screen. Turn a phone into a virtual wallet, the one thing nobody leaves home without, and you’re shackled to it for ever. What was once an expensive toy becomes a necessity, a contract you can’t cancel if times get tough – but also, perhaps, a tracking device.

As any cheating spouse ever caught out by their credit card bill knows, paying with anything other than cash creates a trail, a record of transactions from which behaviour can be deduced. You don’t have to be a deranged conspiracy theorist to worry about the uses to which that information could one day be put, if not by authoritarian governments here or abroad, then by hackers. The freedom of cash isn’t something to be surrendered meekly or without thinking.

But even if we don’t abandon the folding stuff altogether, the drift away from it has costs. The tooth fairy is not the only one at risk of redundancy.

This summer, the last remaining bank branch in our nearest small market town closed down, which in retrospect was hardly surprising; every time I went in, invariably lugging bagfuls of change from school PTA fundraisers, there seemed to be fewer customers.

In the last financial year more than 600 high street bank branches closed, which is bad news for the elderly and those who can’t travel, but even worse news for people working in them. Jobs in banking will go and they won’t be the kind of bankers everyone loves to hate but modestly paid counter and back-office staff, holding down what would once have been considered steady careers.

Automation has been eating away for years at one end of cash transaction, replacing shop assistants with machines, but is now coming for the other end: the places where cash is moved and managed. It’s not robots coming for these jobs, but apps that link buyer and seller or lender and borrower more directly, blowing up established professions in the middle.

And while this world of fintech – the point where finance meets technology, almost certainly to the bafflement of most of us – should ultimately create jobs, they may not be the kind into which redundant bank cashiers can move seamlessly.

Ah, say the prophets of plastic, but think of the problems a cash-free society solves: no more black markets in drugs or guns; fewer street muggers and cash-in-hand traders dodging tax. Really? This is surely not the end of crime, just the beginning of new ones, where hackers and fraudsters replace bank robbers and thieves, and new black markets emerge, using either virtual currencies such as bitcoin or whatever else comes to hand. (A few years ago a craze for shoplifting Tide detergent in the US was blamed, somewhat surreally, on addicts bartering the stuff for crack.)

And for every would-be illegal immigrant deterred by the practical difficulties of surviving in a cash-free world, there will be homeless or otherwise marginalised Britons struggling to get by without smartphones and bank records. If we’re headed for a society where only the poor or the suspiciously shifty carry cash, it’s not hard to guess which outlets will carry on accepting their money and which will shut them out.

You don’t have to pine for the days of bringing wages home in a brown paper packet to worry about whether a cashless future serves corporate interests rather better than social ones.

Besides, even for those who no longer believe in fairies, there’s something oddly magical about money. Small enough to be slipped under a pillow or dropped in a busker’s hat, strong enough to be universally trusted, and foolproof enough to work even when your phone battery’s flat. Hang on to your cash. You never know when a rainy day is coming.