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Only cash works in an emergency!

April 23, 2013 by Ron Delnevo — Chairman, Cash and Card World

In the U.K., TV advertising by National Westminster Bank has for months been focusing on their emergency cash service. The basis of this service is that if you lose your ATM card or damage it so that it is unusable, a phone call to the bank gets you a unique PIN that allows you to make a cardless cash withdrawal.

It is heartening that, amidst all the hype and multi-million dollar marketing budgets of card schemes, a major bank has faced up to the reality that cash is what is needed in an emergency.

I suppose it is obvious, really.

In a world where more than 80 percent of all transactions are still made using cash. In most of the 200-plus countries, cards are hardly used at all. We western folks tend to see cards as vital to our daily lives. Odd, when in more than 150 nations, cards play almost no part in economic activity.

For example, try paying with a card in almost any street food market — the very places where most people on our planet feed themselves — and you will find that you face starvation!

By the way, the same applies to the use of clever "apps". Great in the West, where we can indulge ourselves playing with "clever" ways of using our smartphones. Elsewhere — i.e., most places — people most often simply use phones to talk. Mr. Bell would have understood this perfectly.

Some may question my use of the West to define the only "card-tolerant" zone. Much is made of the creation of large middle Cclasses in countries such as China and India. However, of the two billion or more people who live in those countries, more than half are still living in poverty. Which explains the very high use of cash in both.

Governments also recognize the pre-eminence of cash in times of need. When quantitative easing is required, the printing presses start rolling to produce more banknotes. I have never heard of a central bank issuing cards to get an economy moving again!

So, in an emergency, personal or national, it is the warmth of cash on which we all tend to rely. Unforgiving  plastic is left where it belongs — firmly out in the cold.

About Ron Delnevo

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