The subject of the “cashless society” has been on the lips of entrepreneurs and people in business for well over two decades now. In fact, you could argue that cash has been on its way out since the 1970s when Mastercard and Visa got people into using plastic, charging them for the privilege.
But money is a funny thing: it seems to stick around, despite the fact that it has been largely obsolete, according to many, for several years now. Why is this?
Well, for one, many businesses are still catching up. Governments know that if they move to wipe out cash, companies will go under and day to day transactions will come to a halt. They also know that wiping out cash will require some pretty draconian policies which are unlikely to be popular.
This means that the best way to move away from cash is to use the power of technology. But here again, there are problems. There’s a big difference between a business using a credit card reader with a built in card sensor and a business operating entirely on bitcoin. Bitcoin is the precise opposite of government money, like dollars, euros and pounds. Unlike government money, it can’t be counterfeited, either by the government or by private individuals. And it can’t be tracked either. Currently, Western governments are abandoning their liberal ideals of privacy and a respect for individual property rights and using new laws and powers to track money wherever it goes.
Bitcoin remains the biggest challenge to cash, but it offers a very different future to the one advocated by most cashless society groups. Totalitarians want to get rid of cash because it is a way for people to transact with each other and escape detection by the authorities. They see cash as a way for car dealers and plumbers to avoid paying taxes, and think that money should be constantly surveilled, just like emails and text messages.
Businesses that use bitcoin would be able to hide all of their transactions behind an as yet unbreakable encryption, meaning that their transactions would be invisible to the outside world. For people who care about liberty, this would be a major victory, but it would be very unpopular among politicians if it ever got off the ground.
There is another form of digital currency, of course, that practically all business uses. It’s regular cash, sloshing about in digital bank accounts online. In many ways, this form of money is far cheaper to hold and more convenient, and yet physical cash remains nonetheless.
Perhaps in time, we’ll see companies offering solutions that will make small payments more convenient. This is the province of cash right now. Things like buying coffee and paying for parking at the parking meter are traditionally cash-based. But as entrepreneurs develop these systems further, we’re likely to see the need for cash reduce more and more. Eventually, paying by cash will be as easy as tapping your card against a smart terminal or a ticket machine. In fact, in many places it already is. Is your business ready?