By Allan Hewitson
Although I am not a fan of a cashless society, I frequently run around town with my trusty debit card and very little else to jingle in my pockets. But I don’t really like it when I do.
I immediately deleted my bank accounts from my cell phone after temporarily adding them to the device to accept some cash I was owed. Frankly, I have little faith in the safety of data on my phone, although I am becoming more comfortable with internet banking and online purchases on my better-protected laptop.
My son derides me as old-fashioned – but the more I watch people buying groceries or anything else with a tap of a plastic card or a flash of their cell phone, the more my discomfort increases. I’ll buy in as a senior somewhat by-passed by technology.
That’s something I’ve become used to, although my life has revolved around a computer for over 24 years. I know I am “behind the digital times” – even repetitive actions on Facebook give me trouble from time to time. I’m not much of a “liker,” and my memory is often suspect.
But I’ve been doing a little reading over the past few months as more and issues emerge about unexpected consequences of the drive to cashlessness.
This week, for example, the New York Times revealed that in that city, a wide range of urban workers whose income relies on cash tips – people like doormen, hairdressers, bartenders, and waiter staff are being hit hard by the change in the advance of a cashless society.
This seems to be especially so when tips are representative of appreciation for exceptional (or poor) service. Spontaneous small cash tips are considered an essential part of an employee’s wage structure and employers are often slow to respond to this kind of gradual trend as some jobs find themselves left out in the cold in the cashless world.
I do get it that this is nothing new. Money is tech and tech is money. Civilization brought barter and evolved to the development of money, coins of precious and less precious metals, making shells, whales’ teeth and other primitive forms redundant.
The printing press and paper money bumped precious stones and metals into another category.
Jumping ahead, electronic banking put paid to “the cheque in the mail.” Contactless payment is now doing the same to cash, which is becoming less convenient, which doesn’t suit the market. A new commercial shows a guy making a purchase using his watch. I’ll wait till Timex has that feature, thanks.
North Americans and Europeans are leading the charge, despite the example of India to demonetize in an effort to curb counterfeit money caused chaos at banks after the government declared 500 and 1000 rupee currencies worthless overnight.
This, in a country where over 90 per cent of working poor use only cash for 100 per cent of transactions and most are in informal off-the-books jobs or small businesses.
It didn’t go well either in Cyprus or Greece when banks closed on lines of people anxious about their savings.
Earlier this year, an American bank survey showed cash is already “half-way out” with 50 per cent of Americans carrying cash only 50 per cent of the time. I did not realize how close my habits actually are to so many Americans because $20 to $40 seems to be an average, in the survey – my average too – not what most people would expect.
Bulging wallets are that way because of credit cards, not big bills. When a cab ride, coffee, pizza delivery or a beer can be bought with a plastic tap, instead of spare change, it’s really no wonder some workers not as involved in this digital economy might be feeling a cash pinch.
The bank study also showed that when using cash, consumers studied preferred cash to pay for dining (36 percent,) travel/transportation (15 percent), parties (14 percent), and family functions (14 percent).
The Times report quotes one New Yorker who said his tips were down 60 per cent over 2008 when he took his doorman’s job on Park Avenue. Another blamed the changing habits of condo tenants ordering everything from Uber to pizzas.
In some tip jobs the impact is not so bad for waiters, for example, who carry touch-screen debit/credit card tablets which lean to a 20 per cent option or cash tips.
Why do some observers see dangers in a cashless economy – that’s an easy one. If every dollar is on-line it’s traceable online.