Has cash had its day?

3 September 2011

It is a worrying development that cash is no longer acceptable as a method of payment in some circumstances.

It is becoming expensive to handle cash and more and more businesses are refusing to accept payment with cash.

Electronic handling of money is much cheaper and faster, but the public are concerned about security.  A proliferation of passwords, checks and balances, are not much use when a hacker can run off with thousands of these in one successful operation.  Nor is it much use when the internet crashes, or there is a power cut.  We need security on these issues as well.  Risk has been the measure of success in our boom and bubble years, and now that the bubble has burst we need a new generation who understand what security means.

There is a growing discouragement of credit cards (which borrow money to be paid back later) in favour of debit cards (which use money already in one’s account).  By charging an extra fee for using credit cards, people are being persuaded to spend what they already have rather than borrow to pay back later.  Anyone renewing their road tax online will have come across the difference.  However, if electronic handling of money is cheaper than cash, it is questionable why this charge is levied for a credit card, and why it should be a percentage rather than an administrative or handling fee.  It looks like another way of creaming money off the public, although it has the salutory effect of curbing the credit boom.

“Cash is king” still applies in the sense that those who have funds are preferred to those who are in debt, but it does look as if the only metal worth holding these days are gold ingots, silver and precious metals rather than coins in your pocket.  As for notes, with bank promises to supply the bearer with the relevant funds, they are going the same way as the IOUs of the past - a system which only worked as long as people kept their word.  However, promises by politicians and even bankers are worth little nowadays.

American insurance companies are planning to sue the banks for bad advice.  After the public has bailed out the banks with public money, the insurance companies want to get their hands on that public money.  If the banks had been allowed to crash, there would be no money for these insurance companies to collect.  This public bail out should have been ring-fenced from these opportunists.  There is not enough Christianity in our societies to protect us from the sharks circling the wounded.  “What shall it profit a man, if he shall gain the whole world, and lose his own soul? Or what shall a man give in exchange for his soul?” Mark 8:36-37.  Some people are losing their soul, and we need the grace of the Gospel to recover society.