OPINION: Personal finance columnist Jill Kerby looks at the topic - do we really want to become a cashless society?
It has been some time since I opened The Child’s backpack and found a note from the teacher instructing me to send him back to class with €5 or €10 or €20 for to pay for the latest school outing, or for vital class printouts/books/plants/charity collections / sports day prizes… etc.
We’d then go through the same process with the Scouts.
Either the school/Scout envelope included cash notes or a cheque. But those were the days when everyone still used cheques and the banks didn’t look upon them like used tissues to be processed by a machine in their increasingly-empty lobbies.
On February 28, the National Payments Plan, an agency set up by the Central Bank of Ireland five years ago to help ease us into electronic payments and a future cashless society, announced a pilot project for schools that would see the end of cash payments like those above.
“About time too!” I can hear parents saying everywhere. With cheques being rapidly phased out and parents resorting to rummage around the bottom of handbags and down the side of sofas to find the right number of notes, this is a win-win for schools and parents.
But how far should cashless transactions go? Have we become so enamoured with the idea of not having to use notes and coins anymore that we lose sight of the bigger picture of loss of privacy (hello, Facebook!) and the further encroachment of Big Brother – the State and its agencies – into our lives. And what about how much power this gives Bigger Brother, the private banking sector.
Contactless purchases have become so commonplace – one in every four payments now - that I find myself (unfairly) bristling at retailer who don’t feed my little purchases under €30 (and soon to be €50). People with proper Smart-phones use tap-on debit apps, instantly bypassing their debit card and the need for printed sales receipts.
Interestingly, as the use of cash continues to fall - Banking and Payments Federation Ireland (BPFI) expect that cashless transactions will surpass the use of cash and cheques here in just two years - a country that has been at the forefront of the cashless revolution for the past two decades, Sweden, is starting to have serious reservations about the consequences of being entirely cashless.
Last February, reported The Guardian, its central bank governor, Stefan Ingves warned that soon all payments for goods and services by Swedes will be controlled by their four private banks. He wants new legislation to secure public (ie government) control over the payments system.
“Most citizens would feel uncomfortable to surrender these social functions to private companies,” he is quoted as saying. “It should be obvious that Sweden’s preparedness would be weakened if, in a serious crisis or war, we had not decided in advance how households and companies would pay for fuel, supplies and other necessities.”
Anyone whose bank account has been hacked, or their on-line service interrupted – Ulster Bank customers went weeks without proper access to their money a few summers ago – knows first hand how vulnerable they would be it a there was a focussed, technological attack by dedicated criminal, especially if they were sponsored by a hostile government.
A former Swedish police commissioner Björn Eriksson, 72, leads a group called Cash Rebellion, or Kontantupproret, which had been dismissed as a bunch of old cranks has also warned about living so close to Russia and in having too much faith in the banking system to always do the right thing.
In Ireland we neither trust in the banks or government as much as Swedes do but, like the Swedes, we’ve enthusiastically embraced the convenience, simplicity and lower costs associated with contactless payments and on-line spending.
GPs, taxi-drivers, pharmacists, petrol stations and soon, even primary schools (and of course the Revenue) will mainly see the security upside of this remarkable technology. One of the main arguments that governments use for the use of less and less cash is that it makes illegal transactions less attractive, presuming of course that they, and their tax authorities will always be able to check everyone’s bank account records and spending activity.
Central bankers assure us that cash transactions aren’t going anywhere. (Really? Their statistics show an exponential fall.)
How would you feel – how would I feel - if some day we could never again move our wages or savings into cash because you wanted to make a perfectly legal, transaction that would be completely private? Or you had nowhere to safeguard your money from being monitored, traced and ultimately, accessed by the agencies that control the power switch?
I no more want to exclusively return to paper money and metal coins than I fancy writing this copy on a manual typewriter.
But that doesn’t mean we shouldn’t be having a serious conversation about a cashless society, before it happens.