Tuesday, March 10, 2015
"The end of cash as we know it?"
That's the title of an article in the Telegraph. It refers to payment habits in the UK, but I'm sure it's pretty similar on this side of the Atlantic. Two graphs in particular jumped out at me. First, the number (i.e. quantity) of transactions in cash and via automated credit:
And then the actual value, in British pounds, of those transactions:
There's more at the link.
Those graphics put a very different perspective on the situation, don't they? They help to explain why some businesses are now refusing to take cash at all. The value of the transactions that they execute in cash is so small that it's literally more trouble than it's worth to keep cash on hand for those customers. They'd rather do business electronically; and if you're not prepared to do that, they'd rather you took your business elsewhere.
I can only say that such an approach is fine, as long as the electronic network is operational. When it's not . . . not so much. I wrote about that in my 'lessons learned' posts after Hurricane Katrina, when those who relied on banks whose networks were literally underwater couldn't access their accounts at all. I daresay the routine reliance on electronic financial transactions, rather than cash, has only become greater since then; and when it goes down (as happened with the national EBT network in 2013), the results can be dangerous in more ways than one (such as, in the example cited, threats of rioting by frustrated EBT recipients and attempts to defraud supermarkets that tried to help them).
Personally, I make sure to keep a minimum of one month's expenditure (including all automated or check-based bill payments) available in cash at any time. Having "been there and done that" when things went to hell in a hand basket, I have no intention of being caught short like that again. If I need to buy essentials when the electronic payment network is down, I want to be able to wave folding green pieces of paper at the cashier. I'm willing to bet I'll be served, while those waving pieces of plastic will be SOL. BTDT.