IS COLD HARD CASH NOW OBSOLETE?

IS COLD HARD CASH NOW OBSOLETE?

There was a time when if you had cash in your pockets you could buy just about anything. Well, the world of hard, cold, cash has now come full circle. More and more I am encountering situations where suppliers will not take cash, they require a credit card. For example, if you fly on Westjet and want to purchase a gourmet sandwich you can only pay with a credit card - your ten-dollar bill is not acceptable. It does appear that we are headed more and more towards a cashless society. Is that a good thing or a bad thing? I think a little of both.

Americans used cash for an estimated 26% of transactions last year, down from 40% in 2012, according to surveys by the US central bank. The decline is not unique to the US. In the UK, the proportion of cash payments has dropped by more than half since 2008, sinking from 60% to 28% in 2018. In Sweden, cash accounts for just 6% of transactions, down from more than 35% in 2012. When I look around me I see the same phenomenon.

I am still a traditionalist when it comes to using cash. I find it the most efficient way to monitor how much I spend on a daily or weekly basis. The evil of using plastic is that you often tend to let the ease of use lead to financial surprises. When a monthly accounting of your expenditures arrives it is often for far more than you realized. Credit card debt is one of the biggest financial problems faced by millions. It disturbs me to see teenagers paying for a three dollar hamburger at McDonald's with a credit card. It seems so unnecessary to slowly accrue debt, with high interest payments, over a simple Quarter Pounder.

The eventual disappearance of cash is imminent. Paper money, in particular, is dirty, destructible, and needs to be replenished on a regular basis by the government. Many coins, including the vanished penny and the current nickel coins, cost more to manufacture than their purchasing power. Credit or debit cards are much more practical and very easy to use. And they continue to evolve. We used to have to imprint our credit card number on a paper carbon-copied sheet, then the electronic “insert-your-card” machine arrived and now you just have to tap your card on the debit machine. How could spending money get any easier? And the banks and credit card companies just love our addiction to the magic plastic card.

The advent of the smartphone has pushed the use of actual cash even farther into the background. With banking apps and “digital wallets” on cell phones, today's generation is well versed in ordering their food selections online, paying for it with their digital bank account and just picking up their food order without ever having to touch a coin, a bill, or a credit card. The ultimate sophisticated young consumer can go even one step farther and have a delivery company like Skip the Dishes pick up and deliver your order to your door.

Upper and middle-class families will soon all start becoming cashless in their shopping habits. Unfortunately, some individuals are unable to qualify for credit cards for numerous reasons so they will certainly be disadvantaged. I am still quite taken aback when I finish a meal and ask for the check and the waitress also returns with the hand-held electronic banking machine. When I show her a twenty or fifty dollar bill to pay for the meal, she is often startled and isn’t sure how to handle it. It might mean she has to make change and that is a challenge no young waiter seems to deal with. I am sure it won’t be long before I am told “Sorry, sir, we don’t take real money anymore. You need to pay by credit card.” And that my friends is called progress!