November 29, 2022

Lakeway Parks

The Smart Business

Cashed out: a fond farewell to coins and notes | Money

What’s in your wallet? Do you even know where it is? In March last year I stuck a bank card in my pocket; since then, I’ve pretty much given up on the card, too. For the purposes of this exercise, I found and checked my wallet: there’s a £5 note I accidentally ripped in half years ago, folded up very small, plus 38p. “The £20 I’ve had since I was sent home from work on 27 March 2020,” says one friend, fairly typically. “The same £10 I’ve had in my purse for over a year.” “£10.70 – the last of the £50 I took out at the beginning of first lockdown.”

And when did you last use cash? For me, it was a cucumber plant (£1) two months ago. The plant guy is one of the few hold-outs among the off-grid types at the local “food circle” market – every kale-selling hippy has a sleek contactless terminal. We keep coins for supermarket trolleys, occasional parking, and some window cleaners are wedded to cash. These and tipping – many of us don’t trust big companies to distribute digital tips fairly, with some justification – are the few remaining pockets of semi- consistent cash use among my friends and acquaintances.

This anecdotal stuff is backed by hard fact: cash payments fell by 35{ef1bfe4afb8c637c3d9b733b168b5a276a6c840b9e3c68899db88d855f264c06} in 2020 in the UK and five out of six payments are now cashless. In 2019, the Access to Cash review predicted that only one in 10 payments in the UK would be cash within a decade; now, chair Natalie Ceeney says, “Covid might have accelerated that to next year.” In April, Rishi Sunak announced a joint Treasury-Bank of England taskforce to explore the scope for a central bank digital currency (CBDC) in the UK: it’s intended to provide a sort of official, ultra-secure alternative to bitcoin.

So is that it? Is dirty cash (90{ef1bfe4afb8c637c3d9b733b168b5a276a6c840b9e3c68899db88d855f264c06} of dollar bills test positive for cocaine residue) over? Covid compounded our suspicions around banknotes – the preserve of drug dealers and tax dodgers – with since-discredited warnings of contagion risk and government advice to retailers to favour contactless payments. Now, given the ease and ubiquity of mobile payment, why seek out an increasingly hard-to-find and grimy ATM, skirting pools of beer or worse, when you have everything you need on your phone?

Once the habit was disrupted, cash started to seem weird as well as suspect: grubby paper and discs of base metal in return for goods and services. Admittedly, contemporary cash is no stranger than other systems of currency. Felix Martin’s Money: An Unauthorised Biography recounts an American anthropologist’s 1903 encounter with the Pacific Yap islanders, whose currency was fei – vast stone wheels up to 12ft in diameter. These rarely if ever physically changed hands: one family’s wealth was in a large fei that had sunk in a shipwreck several generations previously (they are still used even now, for symbolic exchanges).

We know money is only an idea: a headline I love from the satirical magazine The Onion reads; “US Economy Grinds to Halt as Nation Realises Money Just a Symbolic, Mutually Shared Illusion.” Does it matter if we lose the physical expression of that illusion? Sweden suggests not. Already basically cashless, it’s committed to being entirely digital by 2023. One Swedish friend says she “hardly knows what our new notes and coins look like”. “Cash is useless,” says another. Swish, the transfer service has spawned a verb, swisha, and most homeless people (yes, Sweden has a few) usually have a smartphone to take Swish payments.

Tipping point: eight million people in the UK would struggle in a cashless society, mainly those on lower incomes. Illustration: Justin Metz/The Observer

But even in Sweden, there are rumblings of unease: the Kontantupproret movement (Cash Rebellion) warns of the potential cybersecurity, individual freedom and privacy implications of a cashless society. There’s also the question of what happens in the worst-case scenario. “Isn’t cash the last resort between us and anarchy in the apocalypse?” asks Gottfried Leibbrandt, one of the authors of The Pay Off: How Changing the Way We Pay Changes Everything. “Your bank is not infallible digitally,” warns Gareth Shaw, head of money at Which? “Cash is the ultimate backstop, a bulwark against lots of things.” That seems to be reflected in Bank of England data indicating there are 10{ef1bfe4afb8c637c3d9b733b168b5a276a6c840b9e3c68899db88d855f264c06} more banknotes in circulation since the start of the first lockdown: we may not be using cash day-to-day, but some of us want it around, just in case.

We might swerve the apocalypse, but cash still matters: nothing else currently offers all the attributes of notes and coins. Universally accessible without a bank account, fixed address, national insurance number or smartphone, cash can be received and spent by anyone. Notes and coins are also easily recognisable, which is important for visually impaired consumers, many of whom find the split-second digital display for card and contactless payments difficult to read. “We’ve seen a really diverse group of people relying on cash,” says Shaw. He describes the Which? Freedom to Pay campaign as “Trying to ensure we are not sleepwalking into a cashless society without some guardrails on it.” Eight million people in the UK would struggle in a cashless society, mainly those on lower incomes. Cruelly, those who rely most on cash find it hardest to access: free-to-use ATMs vanish from deprived areas at a much faster rate than from prosperous ones according to University of Bristol research.

Cash also offers the bracing “pain of paying”. That’s how behavioural economics explains the way we feel making physical payments, in contrast to the dismayingly discreet, frictionless, digital cascade of payments that exit our bank accounts for subscription services we’ve forgotten about and in-app purchases we don’t notice. It’s why cash is a cornerstone of budgeting strategy. “We’ve spoken to people in severe debt and one of the biggest pieces of advice is to cut up your cards and start paying in cash,” says Shaw.

For Leibbrandt, none of these problems is insuperable: “Mobile and app technology may allow for more elegant solutions.” He can easily imagine digital solutions regulating payments for those in need of budgeting help. Based in the Netherlands, another country far ahead of us down the road of cashlessness, Leibbrandt says: “I can go for weeks without having cash.” He only uses it for newspaper stands and occasional market snacks. He also highlights their use of QR code technology for charitable donations. In the UK, the Busking Project has piloted peer-to-peer payments for street performers, while projects such as StreetChange Glasgow offer a contactless alternative for those wanting to help rough sleepers.

Natasha de Terán, Leibbrandt’s co-author, is less gung-ho in the short term. “There are many things that need to be resolved societally before we would be happy with the complete disappearance of an anonymous, ubiquitously accessible form of payment… the anonymity question is one.” It’s something Shaw highlights, too: “There’s anonymity in cash – yes, exploited by criminals, but also for you. Do you really want every single thing you do showing up in your bank account?” That might be more than a matter of concealing your embarrassing takeaway habit: friends going through tricky divorces have fallen back on cash and as Shaw highlights, “We’ve spoken to victims of domestic abuse for whom cash was really indispensable.” Anonymity can mean safety.

So is it our civic duty to use cash if we don’t want it to die out, I ask Shaw, and does he? “I’ve always got cash on me because I’ve always got kids who want sweets. I’ve got to walk the walk!” More generally, though, he says, “I don’t think taking out a tenner a day is necessarily going to preserve things.” By contrast, de Terán does use cash on principle in the businesses around her Welsh home: “If I don’t and others don’t, it will go and that will cause big problems for people who haven’t got a resolution.”

We’ll lose more than our anonymity if we let cash die. Without it, all in-person shopping could soon resemble Amazon’s spookily dystopic Go stores. “So much of how shops look and how they are organised is based around the transaction,” retail historian Graham Soult explains (last cash transaction: a drink in an unmanned farm shop on a Scottish island). He cites the northeast’s Doggarts department store and its much-loved, Heath Robinson-esque system of pneumatic payment tubes, long since phased out, but fondly remembered (surely no one will affectionately recall those cursed “unexpected item in the bagging area” terminals).

“People’s memories are shaped not so much by what they bought but by the process of paying for it.” If our high streets lose the interpersonal element of a physical transaction, what will they offer? “One of the areas where bricks and mortar retail can deliver something different is that human interaction, that act of handing over the product and paying for it and being given it back in a nice bag.” If Covid has dealt cash a possible death blow, Soult highlights the new fondness for smaller retailers it has fostered. “After Covid, some people are craving that social aspect of shopping more than ever. It might not be about the act of payment per se, but it’s that human, experiential aspect that makes them stand out.”

We’ll also lose a rich cultural resource. The British Museum’s Money gallery has coins from around 200BC which are the only evidence of 22 kings and two queens ruling an area of modern-day Pakistan and northern India: we only know they existed because of the collection. The Royal Mint holds never-circulated coins for Edward VIII, created pre-abdication, so sensitive their existence was a tightly guarded secret. Tokens used daily to acquire goods and services are a perfect medium to convey political messages, too: Roman emperors sold the idea of empire through coinage. Soviet ruble notes of the 1920s exhorted workers of the world to unite in multiple languages, while coins depicted the bright Bolshevik future: a factory bathed in sunlight.

The abuse Caroline Criado Perez received when she campaigned for Jane Austen to appear on new £10 notes in 2015 reveals a surprising attachment to currency as a symbol of national identity. Even now, who we put on our banknotes says something about who we are as a state. The UK’s brand-new Alan Turing £50 note is a powerful acknowledgment of the debt we owe Turing and the shameful treatment he endured: but will anyone see it?

An illustration of a digital hand pointing at a £10 note as it heads towards a bin
Paper chase: a cashless society means potential cybersecurity, individual freedom and privacy implications. Illustration: Justin Metz/The Observer

Anonymous and evocative, notes and coins are creative gold. The inexorable narrative machinery of Les Misérables turns on Jean Valjean’s instinctive decision to put his foot over Petit Gervais’s silver 40-sou coin, and there are academic journal articles about the role of “Benjamins” – $100 bills – in hip-hop. Meanwhile, cinema has given us a rich catalogue of iconic money scenes: the Joker burning bills in Dark Knight; Demi Moore and Woody Harrelson rolling in dollars in Indecent Proposal.

“Cash is live ammunition in a way credit just isn’t,” says Guardian film critic Peter Bradshaw. He highlights the classic movie trope of finding a bag full of money (No Country for Old Men is a prime example): “It triggers two competing emotions. One is hooray I’m rich – because the whole point is cash is universally transferable, it’s not like coming across somebody’s credit card; but then you think, somebody’s going to want this money back, somebody’s going to want to kill me.” Cash creates the conditions for cinematic hustle, too. Bradshaw recalls the banknote-based cons an eight-year-old Tatum O’Neal pulls off in Peter Bogdanovich’s 1973 Depression-era road movie Paper Moon (you can puzzle over them online). “I don’t know if it would have the impact it did until quite recently. It’s a whole dramatic language that relies on cash.”

You don’t need to be a numismatist either to feel the aesthetic appeal of physical money. Cash is deeply evocative, foreign notes and coins especially. Trips in the 80s to my Irish auntie meant hoarding lovely Irish coins, featuring salmon, horses and deer. My father’s desk drawer stuffed with velvety soft worn notes from far-flung places, decorated with strange men, flowers or birds was an imaginative wonderland. “Tangible relics of other worlds,” a friend says of her foreign coin jar. That transporting effect works over time as well as geography – it’s powerful to imagine the hands a coin has passed through. My friend Éireann, an academic and poet, brings Edwardian coins inherited from her grandfather into class when she teaches Virginia Woolf’s Three Guineas: “It brings the time right up to the tips of the students’ fingers,” she says. Other friends keep banknotes from lost countries and currencies for the family history they represent – Cambodian riels or gold krugerrands.

Even ordinary cash has an emotional pull. It is intimately enmeshed with family: a parent’s or grandparent’s gift; communion or barmitzvah money handed out; and tooth fairy money slipped under a pillow. An avalanche of family cash stories greeted my shout-out. There’s a mother’s last $50 still kept preciously in its card, nearly spent on a special meal, then, at the last minute, preserved for posterity. Grandfathers press folded fivers into infant hands or conjure £1 coins from behind ears. A father sent his daughter abroad regular 10-franc notes labelled “I bumped into M Mitterrand and he asked me to pass this to you”. My own father’s frequent £20 notes “for taxis” sustained me through much of my shambolic 20s. Cash is a silent proxy for love – envelopes pushed wordlessly across tables, notes slipped stealthily into pockets.

I think that’s over. For my teenage sons, pocket money is a number on a screen, not a pile of coins. They didn’t have piggy banks – I have an unshakeable sense memory of the rusty little key turning in my green plastic one – and will never know the thrill of searching a slice of Christmas pudding for a greaseproof paper-wrapped £1 coin. The emotional heft of a money gift is lost when it’s BACS. One son was recently gifted a £20 note by a family friend. He looked at it blankly, then handed it over, asking for a transfer. I, meanwhile, am wondering what to do with this crisp purple note. While I decide, I’ve tucked it in my wallet, just in case.