Cash use halves in one week over virus fears
Will the virus be the death of cash? Last week, the use of notes and coins in the UK halved due to fears of contamination, and a new banking app was launched – for seven-year-olds.
As dusk descends, the tooth fairy emerges for a hard night’s work. Darting swiftly from pillow to pillow, she bestows upon every gap-toothed child a few hard-earned coins.
But where she once reached for her purse, now she grasps her contactless card.
This could soon be the future of childhood. Last week, a new banking app was launched for children as young as seven. British company Revolut says their new Junior accounts, which are overseen by an adult, will help teach children financial skills.
Increasingly, the UK is moving towards a cashless society. By the end of the decade, cash may account for just one-in-10 transactions. And in only 15 years, many people think we will have no cash at all.
The benefits are obvious – cards and apps, like Apple Pay, are quicker and more convenient, especially in today’s digital world. Indeed, in 2017, debit cards took over cash as the UK’s most frequent payment method.
And, now, coronavirus could be accelerating the decline. Last week, cash use halved in the UK due to fears it may spread disease. Even before the lockdown, online shopping boomed and many businesses switched to contactless payment only.
There are even concerns that cash machines could run out of money if the workers that restock them fall ill.
Yet not everyone agrees with the idea of a cashless society. Lobby groups, like the Access to Cash campaign, point to the vulnerable people who rely on cash, such as the elderly and those who live in remote areas.
In fact, 1.3 million UK adults do not have a bank account. And a cashless society could be disastrous for the homeless – many of whom depend on donations for survival.
Cash makes us poorer and less safe, argues economist Kenneth Rogoff in his book The Curse of Cash. Paper money is propping up the shadow economy, enabling the drug trade, human trafficking, and condemning millions to a life of misery.
But others say the demise of cash would mean the death of free society. Using cards and online payment makes it easier for the government to track our spending. These days, it is almost impossible to remain anonymous online.
So, will the virus be the death of cash?
Yes, say some. The coronavirus reminds us of something we already knew: cash is covered in germs. Cards are not only more convenient, but also more hygienic. And bank accounts for children will come as no surprise to the generation born with a smartphone in hand. Literal pocket money will soon be a thing of the past. After all, in 2018, children in the UK aged between six and 18 earned £4.5bn.
Cash is here to stay, say others. Contactless payment may be on the rise, but there are still over £70bn worth of notes in circulation – twice as much in value as a decade ago. Health fears have been blown out of proportion: the virus will live on cash no longer than any other surface. And crucially, many people still rely on paper notes to survive, including the elderly and the vulnerable.
- What would you do if you were prime minister. Would you abolish cash?
- Does using a card make you spend more?
- Invent your own new currency with its own banknote. Create one note for everyone living in your house, making sure to include at least one hidden design feature so that nobody can make a forgery.
- List as many people that feature on banknotes or coins as you can remember. Which person would you put on a new banknote? Write half a side explaining your choice.
Some People Say...
“An investment in knowledge pays the best interest.”Benjamin Franklin (1706-1790), one of the founding fathers of the USA
What do you think?
Q & A
- What do we know?
- Much of our understanding of money’s role in society comes from Georg Simmel’s famous book The Philosophy of Money, published in 1900. It is widely accepted today that he was right in his analysis that the evolution of money out of a system of barter, created both more individual freedom but also more atomisation of society, loneliness. and alienation – especially in cities. This much is generally agreed.
- What do we not know?
- Whether the freedoms of cash are reversed when money goes digital. Simmel would have been fascinated by the way that banking apps can track every penny that you spend, your movements, and social habits. In the digital world, money becomes an easy means of controlling the individual and gathering data. No wonder big banks and powerful states tend to favour the end of cash.
- Presents as an honour, gift, or right.
- Launched less than five years ago, the business which provides app-based current accounts as an alternative to physical banks, has been referred to as a “tech super star”.
- Apple Pay
- With over 383 million users worldwide, Apple Pay is one of the most prominent mobile payment providers in the world.
- Lobby groups
- Bodies formed to influence legislation on a particular issue.
- Shadow economy
- Work done for cash, where taxes are not paid, and regulations are not strictly followed.
- Human trafficking
- The trade of humans for the purpose of forced labour, sexual slavery, or commercial sexual exploitation.
- The fall, end.
- Some of this money is in shop tills, wallets, banks, or cash machines, as you might expect. However, a large part of this money is likely being kept as savings, overseas, or being used for illegal purposes.