I've been hearing more and more cheer-leading for the platonic 'cashless society', culminating for me in the Manchester cashless experiment and the recent transition of London buses to no longer accept cash. I would like to raise my voice in dissent against this trend and suggest that perhaps the benefits are not worth the hidden costs:
Electronic payments require accounts. Accounts require formal identity. Formal identity requires such things as documentation, address, paternity, occupation, nationality. Not all people have the privilege of access to these. By prohibiting cash payments we make life for those with limited means more difficult.
Financial transactions are an essential part of most societies we are familiar with. Cash is a utility to facilitate financial transactions. The cost of maintaining a cash system is borne by the public through taxation. By prohibiting cash payments we hand over control of the financial transaction utility to transaction processors such as Visa. These processors already impose a cost on merchants. If cash were indeed to be prohibited or deprecated then said transaction processors would essentially be allowed to extract rent from society for providing the transaction utility.
A related point is that society can exert increasingly less will on private institutions, so whereas we may have some say in how a public utility like cash is administered, we lose all control with a private transaction processor.
As with the privatization of any resource or utility, the ultimate benefactor will be the controlling party. Once the oligopoly of transaction processors is in place (most nails are already in that coffin) there is nothing stopping these institutions from levying higher fees. I admit that this is a 'slippery slope' argument, but there's sufficient evidence in other industries to support a hypothesis of price gouging within tightly controlled markets. Cash offers an economic alternative and thus anchors the price of transactions.
There is no reason why anyone needs to have a record of what I buy at the supermarket, where I take the bus or a myriad other daily transactions. No one has any right to know, and I assert the right not to tell.
This is my cash manifesto. Simply summed, cash is a wonderful public utility which has many social benefits over private transaction processors. I encourage everyone to support cash the same way they would their public drinking water, electricity or libraries. I will not support a cashless society until electronic payments are socially just and under public control.
Remember, when someone says 'cashless society', they're actually saying 'cash prohibition'!
Would love to hear your thoughts.