We as a nation like to think that we’re in control of our money. We like itemised credit card statements, shrapnel jangling around in our wallets, and our pension savings concealed safely under a mattress (possibly safer than a bank at this point). But how well can we control the money that we can’t physically see?
Death of the cheque
Having recently celebrated its 350th birthday, the cheque is irrefutably on the decline. I blame the escalation of internet banking, chip and PIN technology and the fact that they’re no longer accepted…anywhere. Bit of an issue really.
The reality is that the last time I tried to pay for something by cheque I received a pitying look reserved for those who write actual letters instead of emails. The cheque, in its paper form, doesn’t fit in the digital age and so is considered archaic.
I have to question if cash is also headed for the economic graveyard. By cash, I mean the tangible coin and paper offering, and not numbers floating around somewhere in cyber space. Most of us would admit to enjoying the feeling of holding a crisp tenner. The same amount on a screen somehow doesn’t feel so good.
Ascent of plastic
Debit and credit cards seem to be taking over the world. Ever tried making an electronic payment without one? Even if you don’t physically need the card, you’d be hard pushed to make a transaction without your card details.
In terms of our spending, the annual growth rate for debit cards in 2008 was 9.5%, while credit card growth limped in behind at a mere 1.9%. Of course, the credit card has a distinct disadvantage: its initials CC (credit card, interchangeable with credit crunch) are not the most popular acronym at the moment…or maybe credit just isn’t worth as much as it used to be. Thankfully, the decline of credit-lending is one good thing to come out of the recession.
Problems with plastic
Why are we so plastic-happy? I can’t remember the number of times I’ve heard, ‘Sorry, we don’t take cards for orders under five (and sometimes ten) pounds – it costs us too much to process’. Suddenly, I really miss that fiver.
And ever since chip and PIN has taken over, there seems to be an ease with which people blindly punch in their ‘unique’ 4-digit number (still so many birthdays out there – not quite as singular as the hand-written signature) without even so much as a cupped hand to shield it from that opportunistic person over their shoulder.
Privacy and control
With pennywise brands like McDonalds, Primark, Aldi, Cadbury’s and Ryanair on the up, I would argue that it’s much more efficient to use cash for nominal amounts. The average cash spend per transaction totals a mere £12: just about the right amount for a few choice deals.
With cash, you enjoy an increased sense of privacy because it’s much harder for other people to trace exactly what you spend your money on. I like that I can buy small, inconsequential items without my bank knowing exactly what they are.
Furthermore, in these strapped-for-cash times when everyone is watching what they spend, it’s comforting to know that I actually have something literal to watch. Withdrawing a tenner for lunch for the week helps me budget much better than if I pay on my card (where it’s harder to judge the limits). Having even a minimal amount of cash lends me a feeling of control that’s hard to replicate.
Cash culture
Maybe there’s still a bourgeois feeling attached to how we pay for things. Surely, paying for a Big Mac with AmEx is just plain wrong, in the same way that buying a Porsche with cash would be considered highly dodgy. We’re used to paying for small amounts with cash, not with swipe-and-go-data-chip-embedded-mobile-fingerprint-Oyster-voice-recognition technology (the hybrid cards of the future). And when it comes to our currency, Britain doesn’t generally approve of what it’s not used to (Euro, anyone?).
I like being able to leave a few coins as a tip in a restaurant or in a charity moneybox and paying with cash at a market stall. These types of transactions have less to do with monetary value than they have to do with benevolence towards someone else.
Descent of cash
As electronic payments, online account transfers and even mobile phone banking continue to grow in popularity, cash transactions are inevitably slowing down.
But before I start to adjust to the prospect of a cashless future, I can take some comfort from the fact that banknote circulation and cash machine withdrawals are still as high as ever – perhaps testament to our basic need to check that the balance on the screen will actually churn out real money when asked.
If we do embrace a cash-free society where the emphasis is on speed (swipe-and-go) rather than control, gadgets rather than security (embedding a data chip in a flashy watch is surely asking for trouble), I can’t help but savour that feeling of money burning a comforting hole in my pocket with its very presence.
Maybe I’ll take a leaf out of Penny Millionaire’s GAAPweb blog and start holding onto my pennies…they’ll probably be worth something soon.
