Five years ago I was uncharacteristically intolerant of credit card payments for trifling amounts, grumpy individual that I was. I would fume at the Starbucks counter as a customer offered a credit card for a £2.50 cappuccino. Card declined, try another. Why, oh why, I thought to myself, don’t they carry some cash. Negative judgments passed through my mind. There is no doubt that paying by credit card for small purchases was once something of a stigma, at least to my mind. No longer.
Now I’ve joined electronic payment party. I’m a fully paid up, card carrying member. I carry cash for emergency, of course, but the moths gather sociably in my wallet. My right-hand trouser pocked is mercifully bereft of small change, freeing up room for other essentials.
It’s the Apple Watch wot dunnit. Apple Pay and other similar systems have brought a sea change in payment habits. No amount is too small for the Watch, and payment is quicker than using cash, or, even, extricating a card and swiping it.
The result is that I no longer feel embarrassed using electronic payments. On the contrary. I am now intolerant of people who offer a £20 note for a cappuccino. Cash transactions take longer than touching a Watch on the card reader. The tables have turned.
Cashless society
Some businesses now make a virtue out of not accepting cash, and no doubt this trend will continue. Yet while I anticipate the imminent arrival of the cashless society, there are dangers. Many regard the primary problem lies in allowing governments to know where and when we spend our money. Without too much imagination it is easy to envisage a link between our spending patterns (and total outgoings) and our income, as recorded at the tax office.
This is not ideal, I admit, and has Orwellian aspects. But since I spend only money that is mine already and has been taxed heavily, I don’t really worry about having all my purchases recorded. It’s difficult to hide these days and there are many other ways of keeping a check on us. From a fiscal policy point of view, however, the increasing prevalence of electronic payments and reduced opportunity to pay in cash will help quell the black economy.
I probably would feel otherwise if I worked in that black economy and habitually stuffed my pockets with dirty £50 notes. In this country, that’s the only option for the shady customer — a miserable £50. It’s the biggest note we have.
£20, that’ll do nicely
While it was once a large sum of money, this is no longer so. Strangely, however, and despite £50 being of relatively low value, here in the UK most people seldom see a £50 note. The banks don’t dispense them through ATMs — as far as I am aware — and they are an inconvenience to use. In common with most Britons, £20 is the biggest denomination I’m happy with.
Below: How can an advanced economy function with a maximum-denomination note of £50/$65/€55? Britain does, and with the burgeoning use of electronic payments and cashless transactions, this country is well on the road to become a cashless society
In the Euro zone, by contrast, there are €100, €200 and even €500 bills — a recipe for tax jiggerypokery if ever there were one. The €500 note is banned in the UK, and rightly so, since it is largely the currency of choice for criminals.
It is said that when the euro was planned, it had been agreed that €200 would be the largest denomination. The Germans, who at the time operated one of the most cash-intensive economies in the world — with relatively low acceptance of cards — objected and insisted on a €500 note to match the DM 1,000 bill which was still widely used. This was a mistake. The USA, like Britain, takes a more pragmatic view, with $100 as the largest denomination bill in circulation.
Taxman likes the cashless
As inflation bites and smaller-denomination paper becomes more unwieldy, there is an incentive to adopt electronic forms of payment. Electronic payments are extremely good for state treasuries and for maximising tax income. And, of course, many see that as a problem. There are other problems, nevertheless.
By far the biggest danger inherent in cashless trading is the reliability of the underlying technology. A few months ago I was sipping coffee in a London cafe when the lights went out. It was an area-wide outage, something that almost never happens in this city, and it continued for a couple of hours.
The cafe couldn’t process my Apple Pay(ment). I had to use cash! It was a now-rare moment of deja vu. Nor could I buy anything elsewhere in the High Street as I realised that many stores and cafes had had to close because they couldn’t even open their tills, never mind accept electronic payments. This one small example shows how we are now almost wholly dependent on the internet and electricity in our daily lives. I hate to contemplate how we would survive in a future major crisis.
Fire and dependency
In my lifetime we have gone from a relative simple existence, where everyone could kindle a fire and cook without electricity or gas if needs be, to a total dependence on electricity and the internet. Even our gas boilers won’t work without electricity. Cashless payments only increase that dependency.
However, provided I can have a few pounds, dollars or euros stuffed in my back pocket, I can happily manage in the expanding cashless society. Where I used to withdraw a couple of hundred at a time and it would last me a week or two, I now content myself with two tenners (for emergency) and even then they can stay in my wallet for weeks. Good that they are now plastic or the rot would set in.
About the only airing my wallet gets is when I have a haircut, as I did this morning. My local barber takes only cash. It’s a small irritant. But in general, thanks to detailed reporting, I now have a much smaller “miscellaneous” account in my annual budget. I feel more in control.
I also exist in a semi paperless state — not the rather optimistic totally paperless office that was vaunted 20 years ago, but in a sensible environment were I keep only the most essential documents in paper form. Everything else is scanned and shredded. I intend to write about that change in attitude since I have just bought a new document scanner to replace my 10-year-old stalwart. The improvement is stunning.
All this said, I am aware that the readership profile of Macfilos is pretty mature, judging by many of the comments, and not everyone is open to radical change. I wonder how many readers have yet embraced the paperless home office or the cashless society.
Hi everyone,
I have been following this site for sometime but this is my first time leaving a comment. Believe it or not, the place I am living in right now doesn’t use Apple Pay yet. I am living on Guam, a US territory in the northwest Pacific Ocean. For those living in Britain, it is similar to the Falkland Islands in the south Atlantic Ocean or Deigo Garcia in the Indian Ocean. My first experience of a nearly cashless society was when I visited China this past July. China uses its own electronic payment systems & foreign systems like Apple Pay aren’t welcome there. I saw locals use their phones to pay for everything from a bottle of water to a meal. In some restaurants, there are no physical menus anymore, customers have to use their social media app like WeChat to look at the menu & order food! When I try to do that on my phone, it required me to verify my cell phone number. Since my number isn’t a local one, such process wouldn’t work for me. I had to explain to the waitress & she unwillingly handed me a paper menu instead. When I paid with cash at the counter, people looked at me like I am from another planet! I do embrace new technology as long as it is useful & helpful to improve our lives & getting our jobs done. However, technology isn’t supposed to be our "master", 100% dependent on technology is a disaster waiting to happen. Besides power outage, what happen if our phones were lost or stolen? Or even worse, being hacked & all our sensitive personal info will be exposed.
Yours Truly,
Patrick
Hi Patrick, thanks for your input. It’s always good to hear from someone who has been a long-time reader. I’m glad you find the blog interesting — and I suspect you are our only reader on Guam. We did have one in the Falklands for a time, which I know because it was a neighbour who was there as a consultant for a year.
You are right on our reliance on technology. It brings many benefits and we feel we could not exist without it. But we should be sure not to burn all our bridges in the rush to adopt.
The Gents toilet at Marylebone Station was free access for most of this year, it is now 30p to enter again.
In fact one Saturday last month it was free to use when I arrived in the morning, in the evening it had gone back to 30p.
Maybe it is to keep the riff-raff out?
Make sure you keep some loose change about your person for emergencies
Is this THE Peter Kelly? Well, Peter, I do keep two 20p and one 10p sewn into my sock in case of emergency at a mainline railway station. 30p is cheap these days. Many places charge 50p, as you know, and that place at Piccadilly Circus takes 50p “or one euro”. Much profit. All that said, it’s near impossible to find somewhere other than at railway stations and I’ve lost count of the times I’ve had to buy a coffee just to use the facilities. The recent relief (sic) on council tax for places of convenience might help a bit in encouraging local authorities to re-open those subterranean toilets that have long since been converted into night clubs. Where, I imagine, 30p goes nowhere…..
The department stores on Oxford Street have quite good facilities.
Most pubs are so busy they don’t really notice if you just pop in and don’t buy a drink.
Nice facilities at Harvey Nichols, Knightsbridge too where you can get whisked up from the ground floor to the fifth floor in an express lift.
I think I’ll start a blog about this subject!
The point is though Keith that there are many of us who don’t like being depenent on electricity. I dislike having to constantly charge my camera batteries,my phone,my iPad,my bike lights and so on. All the time.
I liked it when I could put 2 button cells in the camera and they would last for a year. This is why I wear a mechanical watch. Heck, even a quartz watch will run forr 3 years or so and keep perfect time. Your apple watch gobbles power like nothing else!
I find paying with my Watch to be incredibly convenient and don’t think I am any more reliant on the electricity supply than if I stuck entirely with cash. In a blackout the ATMs don”t work, the electronic tills in shops don’t work and the banks can’t issue cash, so I am no less disadvantaged in that situation. I carry some cash for such emergencies bur rarely need to use it. Like it or not, our lives are dependent in so many ways on electricity (including the abliity to charge our camera batteries!) so personally I see no point in denying myself one more convenience that relies on it.
I think that about sums it up, Keith, and it is also my attitude. We can’t deny ourselves the advantages of technological advantages just because the system may break down at some point. I mentioned the negative points because I knew that they would be raised by others and didn’t want to seem unaware of the pitfalls — while at the same time extolling the benefits of electronic payments.
In the 1960’s when I was a young lad, I put my pocket money ( well. some of it) in the bank account my mother set up for me. I would go to the counter hand over my book and the cashier would take the money and write down the amount deposited by hand. It worked beautifully, Now we have computers and it takes much longer when I need to go to the bank. There are often problems with the banking system. In the news all the time.
I got a new passport last year. I had to do it on-line. It was a pain with no-one to answer my queries as I struggled trying to fill in the fields for each screen. Apparently this system is designed to save money. For who? It’s more expensive than it has ever been. I made it through the online application process and guess what? The first time I took the passport to the airport, it wouldn’t work for the scanners and I had to go to the desk and do it manually. Others were doing the same.
My local supermarket wants me to check out my own groceries myself.Should I get a salary for this since I am now doing the work of the supermarket staff AND paying for the goods.. I mean, if the technology is so clever why can’t it scan my groceries by itself? And how many people have lost their jobs because of this?
Don’t get me started on electronic systems Mike.
Cash will do me just fine and I’m sticking with it. By the way since phone companies have your address and data we are all one step away from people being able to scan your phone and find out everything about you, your age, where you live… what a nightmare. That’s where scanning tech is going.
Yes, of course, there are two sides to everything. I share some of your reservations, especially with the security procedures of banks. I suppose they have to do it. But when I was young and in the absence of any form of photo ID, our bank staff recognised me and just my face (they now call it facial recognition) was enough to cash a cheque. Now it’s all "give me the second, fourth and ninth character of your password".
Interesting piece and some interesting comments Mike, clearly I am not alone in being routinely contentious. I know that you are well aware of my attitude to government and its tendrils. Still you have said it here, so I won’t add anything…
Other than note that not only can this be a problem when there is a power outage, but the other day there was a major issue with 02 and its piggy backers, so I would venture to suggest that cash is still king.
On a slightly different tack, the other day, I picked up a new (old) toy, an HMV 102 portable gramophone, I won it on Ebay having seen some YouTube of a friend of mine using an old Columbia machine to play Kathleen Ferrier and others on his channel.
When I got it home, it barely functioned, it sounded terrible and it didn’t seem to want to play at the requisite 78 rpm. Unusually for me, I didn’t panic, after all what could possibly go wrong? I looked on t’web and found and downloaded the manual, which someone had helpfully scanned and posted.
HMV describe how to dismantle your gramophone for periodic maintenance, so I went to a clean desk and started… One flat bladed screwdriver in hand. Very soon I had a pile of bits, and a conclusion, all the greasy bits were gummed up, so a bit of WD40 judiciously applied, clean the ingrained dirt and reassembled, and about an hour later, Bing Crosby, Dean Martin, Perry Como and a host of other stars were filling my room.
So, HMV were happy for me to pull my machine apart, they were happy for me to understand how it worked. One of the best bits is a little spinny thing at the front of the motor with three stainless steel spheres on it. When you start the motor… or wind the spring as we tech people say, these little balls spin, apparently this is called "the governor"… and its job is to maintain the speed of the turntable (give or take) at 78 rpm.
I just thought that this was a great little allegory.
The governor is there to do one job, to stop stuff going out of control, nothing more, and we consumers should be able to to take the lid off and fix it.
Bravo with the gramophone, Stephen. But of course, your experience would be the same with a car of a similar age. In those days they expected owners to fettle machines, perhaps squiring grease into nipples every 3,000 miles. Gramophones would have needed similar care. With electronics and component miniaturisation, self-help is no longer an option. We live in a throwaway society because repairing something (fridges, washing machines and other machines, for instance) costs more than it’s worth. Buy a new one…. they say.
Yes Mike and as I am sure you are aware, that was not what I was talking about.
Your reliance on corporatist business models, will end in tears, and folk need to be able to have some control over how the strings are pulled and who pulls them.
I have issues with using either my phone, or watch for payments. I am a typical yorkshireman in that cash comes first, then I will use a credit card, and this year I added contactless use to my credit card. I don’t believe in a cashless society, mainly because all of the cashless stuff relies on electricity, and then the internet (which seems to defy both electricity, phone lines and other variables at times). I see these devices as making electricity the god of choice, with his deity being his ability to feed our devices with power.
I will stick to my cash for now, while watching the modern era flounder every time the credit card terminal goes down. lol.
Have they invented an electronic spade yet?
Not yet but I think i have a prototype almost ready to play with.
Sorry Mike, but I’ve no idea as I’ve got neither smartphone nor smartwatch. I do keep a little change for the coffee machine in school. Otherwise I pay with my credit card whatever the amount. I rarely have more than 3 or 4 euros in my pocket. Yet your article raised issues I’ve often thought of about technical progress and speed (no pang of nostalgia whatsoever) and how it seeps into our lives sureptitiously. I’ve often watch my high school students and how they manage with smart devices and I’m amazed! But when you think of it some of us like Leicas because they make us slow down, they make us ponder about what we want in a picture. Yes it is a 24 or 16 or 12 megapixels camera with wifi and I don’t know what but do we want speed when we take pictures? when photographing people do we want a stolen portrait or have some sort of social intercourse with the person we’re taking a picture of? Yes we do shop on amazon but just as when we take pictures do we want to shop in local shops and have no social intercourse with the person we’re shopping at? do we want communication limited to fast text messages and an emoticons (which actually is the way the young ones communicate as far as I’ve seen since the smartphone arrived in school)? Sure paying with a smartwatch is fast, convenient but what about the human touch? don’t we lose something somewhere? I may have got off the point at some time in my comment. I’m image-addicted when I daily read the blog (no matter the camera or technology involved) and the site you’re running is great as people take time to look, to share, to ponder and comment… not a fast activity. Sometimes you just wish there were more than 24 hours in a day to have it slow
Jean
Well, of course, swiping a credit card is just the same as using a smartwatch or a phone, it’s just that the watch is easier and more convenient (no card to get out the wallet, the watch is always strapped to your wrist and is virtually impossible to lose or mislay. But you are right on the social interaction that is increasingly lost as we shop with Amazon. Soon all we will have in towns is food and drink establishments — until Amazon delivers freshly brewed coffee to your doorsteps.
One way of ‘watching’ your money, I suppose. I doubt if I will ever get as far as having a ‘miscellaneous account in my annual budget’. I admire people who can do that sort of thing without going mad every time they spend an extra penny.
William
Good point, William. I’ve always been fascinated by bookkeeping and accounts and I am the only person I know who can gain relaxation by filling in expenses on an accounts system. And as for reconciling a bank statement, well that is positively orgasmic. Hence, accounting for everything and not having miscellaneous stuff makes me feel good. I am well aware that I am considered odd
Although Mike if we are talking to our wrists we may well be taken for bodyguards! Seriously although I like having the option of paying with a tap of my card on a reader I’d miss the flexibility and anonymity of cash. However I wouldn’t miss the pile of pennies I seem to accumulate in my pockets.
The absence of pocket change is a great benefit which cannot be overestimated.
Mike: I’d only add a couple of things. Bitcoin is the ‘anonymous’ cash-like alternative (useful for mobsters and Zimbabweans and Venezuelans trying to retain some value in hyper inflationary economies). Also, a drag on conversion is the appeal of cash to small businesses: most are likely not reporting all income.
I do like the Watch. Payments, logging into the laptop and boarding passes are small, but nice advances in convenience. iPhone ended watch use for me and the Watch may eventually remove the iPhone for me – I’d like to just use an iPad with it. (Which may be why the Watch is tied only to the iPhone?)
-TR
All valid stuff, Tuco. I agree with you on the iPhone/iPad/Watch relationship. Since I got my first cellular Watch — the new Series 4, I could well manage without the iPhone. All I need is a pair of AirPods and I’m in business. Eventually, I suspect, voice communications will move to a wearable, such as the Apple Watch, and what we now think of as the iPhone will become what it really is, a small computer or small iPad.
Although, hopefully, rare events,nationwide power outages and failures of crucial central computer servers can halt many vital modern services and disrupt conventional ways of life.It is also vulnerable to hostile hacking. For those reasons we should all have a fall-back plan to continue some semblance of normal life.So a reserve of cash makes much sense. As does a camp stove in case electricity becomes unreliable. No coffee shops; not cash machines or registers in shops. Not of immediate concern to most people, but deserving of some thought and planning.
It’s a vast subject, David, and I was just attempting to be devil’s advocate and draw out some comment (which I seem to have succeeded in doing). I am planning some backstop precautions, such as the odd tin of baked beans and spam, a portable gas cooker and, even, a small generator to charge up the equipment. In these uncertain times it pays to be careful……
Pity the ‘poor’ people that cannot afford your expensive toys..
You state that you get annoyed because someone has the cheek to use cash, making you wait at least 10 seconds longer in a queue..
Must be terrible for you, how you must suffer…
You claim to be environmentally friendly, your paperless world. Gosh.
Have you ever looked into how your very expensive time device is made?
Child slave labour = batteries.
Cobalt is in your battery, and no matter what Apple tells you, children are still used to mine the stuff.
And in your camera battery.
And in your sexy MacBook battery..
You state that it is good that cash is now plastic..
Plastic and environmentally friendly do not go together, well in your head they do..
You are a advertisers wet dream..
I actually feel sorry for you.
Thanks, Timmy, for your constructive comment. Much appreciated.
CASH except big purchases, why would I want or need another hackable device that could cause serious damage?
Ah, I thought that would get you going!