When I visited Austin, Texas, this year, I passed a homeless man on the street who said that for those who did not have cash to donate, he accepted credit cards. He had attached a Square reader to his smartphone, allowing him to swipe credit cards. I have to admit, although I was hesitant to use my card to donate money to him, I decided to do so anyway.
Around the world, gold and silver, goods and services, animals, and—in Yap, an island in the Pacific west of the Philippines—stones, are being used as currency. However, as cash-free payment systems become more commonplace, what benefits do we gain by continuing to use traditional money, if any?
BEHIND THE TIMES
With the increasing number of mobile payment apps, including Apple Pay and PayPal, as well as the emergence of digital currency, like Bitcoin, it seems to make sense to switch over to these systems. They are more convenient to use, and their transactions are much faster. And these systems eliminate the need to carry around cash, which is easy to lose or have stolen. Cash also costs money when we have to pay transaction fees and wastes our time when we run out of money and have to locate an automated teller machine.
It’s also no fun for small business owners. A good friend of mine says it takes him at least five hours a week to manage cash at his coffee shop business, because he has to match sales records to how much money is in the register and then figure out what went wrong when he comes up short. He also uses security cameras to check on whether employees are stealing, and another in the back office to protect the safe. Depositing cash in the bank also requires filling out forms, which is tedious when each sale averages less than US $5. He’s worried each time he goes to the bank carrying a large bag of money, which is mainly singles.
He’s looking forward to entering the age of cash-free payment systems. Of course these systems come with new concerns such as hacking, technical glitches, and not working altogether—which could lead to losing customers and sales.
But on the flip side, such systems have the potential to offer added security. Digital wallets, like Apple Pay, require a fingerprint to access—which is difficult for others to duplicate. MasterCard and other credit card companies are going a step further by using mobile apps to scan the purchaser’s retina before the payment is approved. Visa is working on implementing voice-recognition technology to verify the cardholder’s identity. And Amazon recently applied for a U.S. patent for “selfie authentication,” requiring its customers to take a photo of themselves every time they log in. This method has shown to be more secure than passwords.
Even Abba, the Swedish pop group that released the 1976 single “Money, Money, Money,” no longer accepts cash at its museum, in Stockholm. Björn Ulvaeus, who cowrote the song, told The New York Times: “We don’t want to be behind the times by taking cash while cash is dying out.”
Will you be behind the times and continue to use cash, or will you welcome the cash-free age with open arms?
Originally published here: Living in a Cash-Free World – IEEE – The Institute