'The cashless society is upon us, scorching through Scandinavia and reaching just about every part of the developed world. But now there is pushback. We have just had this week a report warning that up to 8 million people in the UK could not cope with the disappearance of cash, while Philadelphia has just become the first city in the US to require retailers to accept cash instead of cards. There are a few exceptions, including services such as car rental, where the card guarantees the identity of the hirer.
Other US cities, including New York, Chicago and Washington DC are considering similar action.
This is one of those great tidal waves that sweeps across the world, as big in its way as the development of the iPhone. What should we make of it?
The arguments are well known. The case for cashless includes security, convenience, cost, personal preference, the avoidance of tax evasion, and so on. The case against is mostly social: that people who do not have a bank account (some 6 per cent in Los Angeles) are excluded from a large part of economic life. A cashless society discriminates against the low-paid, undocumented immigrants and older people.
In recent months the switch of retailing from high street to online has given a boost to cashless sales, but one further issue is quietly driving government support for the switch: the losses the authorities currently make from evasion. In the past year UK VAT payments are been particularly strong. Could that be because more sales are traceable?
There are however some practical issues that make the matter less clear cut. For example, the convenience argument could swing either way. Yes, in general, it is easier to use a card rather than cash, but there are times when it is easier to hand over a fiver than make a card payment. Pocket money for children is an example of that.
The debate is a bit like the one in the UK over the use of cheques. You can see the arguments in favour of doing away with them, and many European countries have pretty much done this already. But charities are terrified that if cheques were to go, they would lose a lot of their donations. They fear that older people, who are their main donors, will not faff about with setting up a bank transfer, whereas they will happily write out a cheque.'
Read more: A cashless society is closer than ever before, and it’s a grave threat to our civil liberties
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