Don’t celebrate the 50th anniversary of the cash point machine too much, we may not even want cash for much longer.
Cash is expensive, it feels so, well, so analogue.
According to a report from Mckinsey, cash costs the US economy 0.47 per cent of GDP. “The operational cost of cash includes the direct expense of producing, collecting, storing and safeguarding it; counterfeiting costs; and the time spent processing cash payments in merchant tills, business back offices, government agencies and banks,” it said.
But then in the US, cash is less popular than in other countries – in Russia cash makes us a very low percentage of transactions, and Mckinsey reckons that this accounts for no less than 30 per cent of the productivity gap with the US.
So, what are the disadvantages of cash?
For one thing, its anonymity encourages the black economy. Cash usage is high in Nigeria, and the black economy accounts for 63 per cent of GDP. In Finland, cash usage is low, and the black economy accounts for just 14 per cent of the economy.
Then there is convenience, and excuse the pun, the problem of using the conveniences. If you get caught short, and the call of nature becomes all encompassing, then nothing is more irritating that having to find some change.
In the age of smart phones, it is changing.
We can pay for our parking by phone, make micro payments by phone, we may soon be able to pay for the cost of spending a penny, by phone.
Maybe the biggest issue of all is keeping tabs.
Cash can just slip through our fingers – spend money using our phone and apps out there can give us a record of how much we are spending.
Okay, cash offers advantages, too.
But much of the resistance comes from the older generation.
Maybe they can change.
Jose Diaz, director of payment strategy at Thales e-Security says that “ATMs are evolving. In some countries, ATMs have become financial services service points with ability to pay bills, deposit checks and even buy football tickets. What’s more, the introduction of mobile devices and biometric technology will completely transform how we get out cash in the future.”
Maybe, but we do not need a hole in the wall, when we have a smart phone in our pocket?
As so called digital natives age, don’t be surprised if the idea of cash starts to feel as old fashioned as pounds, shillings and pence. The hole in the wall, may be filled in, soon.