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Sunday, February 26, 2017

Going cashless will leave the poor even more marginalised


IT’S been four days now and I still haven’t spent any cash; money yes, but not cash. It’s part of a little personal experiment thanks to US President Donald Trump.
When he suggested at a rally in Florida last week to look at what was happening in Sweden, I did as he said. And sure enough, there it was: a terror non-attack in a society that could be completely cashless in less than a decade.
As it stands, you can’t buy a bus or a metro ticket with cash for love nor money. Almost half of the country’s banks are cashless and, soon, the same will be true of shops: cash is used in just a fifth of all transactions.
Even the street vendors and church collections are paid in plastic, or through a mobile phone app. Last year, one church in the capital, Stockholm, said that 85% of donations were made by phone.
Sweden was the first European country to introduce a banknote in the 17th century, so it seems rather fitting that it will also probably be the first to consign it to history.
Many are happy — advocates say the digital economy helps to tackle corruption and it is quick, fast and easy. Others warn of the lack of privacy; every tiny transaction from buying a newspaper to a health-damaging pack of cigarettes leaves a digital trace. In the wrong hands — indeed, in any hands — that kind of information is open to all kinds of abuse.
Not surprisingly, the debate has divided along demographic lines with older people holding on to the idea of cash. Pensioners make up a large proportion of the Cash Uprising movement which campaigns to ensure older Swedes will still be able to deposit and withdraw cash at banks.
There’s also a lot of sense to the argument that a cashless society will push the poorest even further towards the margins. When Indian Prime Minister Narendra Modi took 500 and 1,000 rupee notes out of circulation overnight last November, chaos ensued.
At the time, he said that he wanted to put a stop to India’s ‘black’ economy, now he’s stressing the notion that cashless equals modern. Where does that leave the 600 million Indian people who don’t have a bank account or the one in five who are without a smartphone, or the rickshaw driver and market seller who can’t afford a card reader?

Here in Ireland, the card continues to gain ground on cash. Last year, the Banking and Payments Federation Ireland released figures to show that each of us withdrew, on average, €5,388 from ATMs in 2015, but made debit card payments of €7,442.
For the little things, though, we still use cash and that’s where my four-day card-only trial is starting to hurt. I can’t find it within me to pay for a packet of chewing gum with a card, or to buy a newspaper, stamp, or loaf of bread with plastic. Some shops still say they will accept cards only above a certain amount.

So instead, I buy in bulk. And there’s the rub. There are any number of studies to show that we tend to spend more when paying by card. (Let’s not even get started on how contactless payment can lead to overspending in six effortless taps.) However, what I’d miss most in a cashless society is the cultural side of hard currency. It would be a sad day if we could never toss a coin again. How would we start a match, resolve a dispute, decide who pays for the coffee and buns?

What about our buskers? I can’t see too many of them investing in a visa reader. And what of the homeless magazine sellers? In Sweden and Amsterdam, some of them have already made the transition to digital but that means there can be no unofficial extra contribution to a seller who is standing in the damp of a hostile afternoon.

Speaking of unofficial contributions, the kindly relative who pressed a note into your hand at the door might very well up-skill to send the money by app. In return, they might even get a text to say ‘thks’. But what a loss: the look of complicity between donor aunt/uncle and eager recipient is one that should be bottled. That exchange is what subversion, at its very best, looks like, capturing as it does the moment of a surreptitious handover conducted out of sight of certain-to-object parents. Stealthy philanthropists (my Uncle Jim was a master of the art) will take a hit in a new cashless society.

There’ll be no rooting down the back of the sofa for unspent coins either. No cash registers, no cash cows, no phrases to be coined. What will we put in supermarket trolleys?
Archaeologists, too, will be at a loss. Coins are one of best dating tools there is. A coin stamped with the head of a Roman emperor is one excellent way of placing an object in a time period.
Digital data, however, is notoriously hard to preserve yet easy to manipulate and hack.
The thought of an IT banking failure doesn’t even bear thinking about. Remember what happened in the summer of 2012 when 600,000 Ulster Bank customers were left without access to money because of an IT glitch.

Meanwhile, back in Sweden, news broke of riots in a predominantly immigrant neighbourhood just days after President Trump’s comments. Some cars were set alight, a police officer was injured and a suspect was arrested on drug charges. A spokesperson said the incidents were regrettable but unusual.

Even though 45% of Swedes believe refugees are more to blame for crime than other groups, according to a 2016 Pew Research Center survey, the same centre found they also think growing diversity makes the country a better place.

Still, I bet the riots will be used to add grist to an increasingly ugly but prevalent anti-immigrant discourse. I’d even put cash on it.
Clodagh Finn