Article

The war on cash

It's more like a war on choice.

July 15, 2013

by Astrid Mitchell

There is a war on cash, or so we are told. Not one of those geo-political wars about power, influence, resources or ideologies, which is what real wars are about, but a one-sided and phony war over how people pay for things.

On one side of the divide — the credit industry — competitors have put aside their differences (up to a point) to take pot shots at those on the other side of the divide — the cash industry — which is by and large ignoring this so-called war.

Whether the cash industry should be doing so is a moot point. How do you respond to an annoying neighbour or colleague — ignore, complain or fight back? On the other hand, there is the biblical promise that "the meek shall inherit the earth," but as we all know, in the temporal world the meek get trampled on.

That aside, the past few weeks have not been good ones for the cashless fraternity, with a number of published reports demonstrating that cash is not on its way out, as they would have the public believe.

What cash proponents say:

Two examples are given in the July issue of Currency News — a report on the Future for Cash and a statement by the De Nederlandsche Bank, excerpted below:

True, debit card use has been steadily increasing while fewer and fewer counter payments are made in cash; but cash continues to play a pivotal role. The growing use of debit cards is in line with the ambition to make POS payments safer and more efficient. At the same time, DNB is committed to maintaining cash as a universally useable and available payment instrument and a smoothly functioning cash chain.

The statement was unusual in that central banks by and large remain neutral on the question of payments. But undoubtedly in response to the aggressive tactics of the cashless community in the Netherlands, the central bank has openly said that cash must stay.

Several other recent reports also point to the stability and even growth of cash, all of which is leading bloggers and other anti-cash pundits to beg the question, "Are we losing the war on cash?"

The real question, however, is why the networks declared war in the first place. Even those of us involved in cash understand the significant benefits of cards and other forms of cashless payments — convenience being a key one.

There is also the virtually universal acceptance of the major cards (unless, of course, your card provider doesn't like that you are in Bangkok when they think you should be in Bogota, and the card gets declined), usefulness for online purchases and large value transactions, less vulnerability to loss or theft, and so on.

We understand this, and so does the public. They don't need well-funded marketing campaigns, let alone macho but juvenile slogans ("Let's kill cash" anyone?) to tell them how to pay.

What card networks say:

Consumers' payment behavior is decided first and foremost by what suits them and their circumstances. Sometimes it's cash, sometimes it's cards, checks or direct debits, bank transfers of other forms of electronic banking. If the virtues of cards are all that they are cracked up to be, this form of payment will prevail without campaigning.

But given that there is a war, the problem lies in our war chest compared with theirs. Theirs is full of money being spent on advertising, social networking and lobbying (which we all, as card users, pay for); ours is virtually empty. 

As an industry for cash, we cannot compete with the financial resources of the competition (let's call them that, rather than "the enemy"). But we can work more closely together, as the cashless lobby is doing, to make the case for cash — preferably without the macho posturing. As long as the facts are presented fairly, they will speak for themselves.

And then consumers will make their payment choices accordingly, regardless of the phoney war — which is not a war on cash, but a war on choice.

Astrid Mitchell spent 25 years in marketing and strategic development for De La Rue, Applied Optical Technologies and Bundesdruckerei. Besides editing Currency News, she is a director for Reconnaissance International, editor of Tax Stamp News and event director for the Tax Stamp Forum, the Coin Conference and the High Security Printing Conference.

Published with permission from Counting on Currency

photo: sebastian dooris

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