The move to a cashless society; the societal and security implications
Chair: Martin Gill
James Shepherd-Barron – Humanitarian Adviser at Cash Essentials, and Disaster Management Consultant
Paul Nicholls – Business Development, Oberthur Cash Protection
Andrea Nitsche – Chair at Cash Matters Org
James Shepherd-Barron accepts that smart financial technology is a good thing offering a number of benefits including speed and the empowerment of those who are often disadvantaged. That said e-transfer platforms are not an unqualified good as they serve to disadvantage low income societies. You will hear him explain how digitalisation causes indirect harm to those affected by pandemics and other hazards. He outlines five factors that affect risk. The first concern privacy, and he notes that data captured by aid organisations is exploited by governments that are not benign. Second, cash is resilient and acts as a back-up when systems fail and moves away from using cash slows recovery. Three, cash does not discriminate, it does not rely on access to expensive devices, and he notes that 90% of humanitarian aid transfers are received in cash by recipients. Fourth, cash is more efficient, usable by all in local markets and you will hear him discuss multiple benefits. Fifth, cash is crucial in reducing vulnerability to the impacts of disasters, and e-payments stimulate over borrowing; 20% of refugees default on loan repayments and are then financially excluded. Part of the difficulty in communicating the message is that it is akin to David taking on Goliath; the other side is much better funded and connected.
Paul Nicholls argues that the extensive coverage in the press about the demise of cash exaggerates the argument. In any event it is the only safe form of payment. Discussing the impact of Covid 19 he notes the increase reliance on e payments, even Germany known for favouring cash has moved to digital payments. He quotes the retailer ASDA announcing that it expects the pandemic has moved the cause for a cashless society forward by 10 years, others he says, put that figure at 5 years. We learn that poorer parts of the UK still used ATMs once again linking disadvantage to cash use. This underpins the democratic benefits argument for cash and there are a number of points about this in the webinar. Paul for example notes that in the digital world big brother can see every payment, cash affords anonymity.
Andrea Nitsche puts forward a powerful case for the benefits of cash, and the public good that it alone provides. She also emphasises the personal freedom it alone provides and consider it a pillar of an independent society. Its use by one person does not include its use by another, and it is trusted all over the world in a way digital currencies and systems lack. In any way these are profit oriented, they are run for that purpose, in a way cash is not. You will hear Andrea make some interesting points about how countries perceive cash. She believes there is more awareness now that a cashless society is a bad thing but there is still more work to be done, and Cash Matters is at the forefront of these efforts.
As Paul notes, the time it is taking to eradicate the use of cheques suggests cash won’t disappear soon, but he accepts that it will eventually, meanwhile there is a need to recognise and harness its benefits. What comes through in this webinar is not just that security of e-payment platforms will always be a challenge but crucially there are reasons of fairness and justice, as Andrea says, democratic pillars to operating with cash, and they need a broader understanding.
18th March 2021