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Cashless society?


In my youth, ‘plastic money’ was something largely restricted to American films (and American society generally). Here in Europe we paid cash; but although many people in the USA still did too, they were increasingly inclined – and above all expected – to use credit cards. Since the whole idea behind credit cards was to encourage people to consume more by spending money they didn’t actually have, and cough up even more money to the banks to finance their accumulating debt, we Europeans tended to shun them. We didn’t want to get into debt. In America, on the other hand, the credit-card culture eventually meant that never getting into debt worked to your disadvantage, for it meant you could never build up a ‘credit history’ that lenders could use to decide if you were entitled to, say, a mortgage. In other words, people who kept their finances completely in order by avoiding debt and only consuming what they could afford were treated as financially unreliable. Surely the height of capitalist absurdity.

But soon after I moved to Switzerland in the mid-1970s the first bancomat machines (now known in English as ATMs, cash dispensers or ‘holes in the wall’) were introduced there. Until then I had gone to the nearest branch of my bank if I had to top up the cash I needed for my everyday purchases, including restaurant bills, and so I was tied to the bank’s opening hours (luckily the UN organisation I worked for had its own branch on the premises, so I could pick up cash during my coffee break). But henceforth I could go to a bancomat at any time of the day or night; and since then that’s what I’ve done, for the machines have been introduced throughout Europe, while banks now have very few branch offices left.

But the bancomat cards were debit cards – in other words, you could only pick up money that you actually had in your account, so there was no risk of getting into debt. You could even use the machine to check what your bank balance was, and decide how much you could still afford to spend that day.

It took quite a few years for supermarkets and other businesses to introduce a system of instant ‘plastic’ payment; and when I moved to Holland in the early 1980s it scarcely existed. You picked up your cash from a ‘hole in the wall’ and used it to pay for your purchases. But, as time went on, more and more places allowed you to pay electronically, using a four-figure personal identification number (PIN) to prevent misuse. So far so good.

However, there was already growing pressure from the banks and the business sector to encourage more and more people to consume beyond their means, and get into debt, which they then had to pay back at great expense; and the ‘ease’, speed and relative invisibility of plastic payment helped conceal from people how much they were actually spending. The shock came later when they found themselves deeply in the red, and unable to pay the rent or feed their kids properly. Meanwhile the use of credit cards had spread to Europe from America, encouraging even more financial risk and irresponsibility; credit cards could now be used in the same machines as debit cards, and not everyone seemed to realise the fundamental difference between spending money you had and money you didn’t have. The banks certainly weren’t about to remind you.

Not all their attempts to eliminate the use of cash were equally successful. One was the ‘electronic purse’, which was introduced in Holland in the mid-1990s under the name chipknip (‘chip purse’). The idea was that you would no longer pick up cash from the ‘hole in the wall’, but recharge yet another plastic card and use that to pay for your purchases. This had several disadvantages, which people were very soon wise to. Not all businesses allowed chipknip payments, so if you were going to recharge your card at an ATM anyway you might just as well get cash, which was accepted everywhere. And Dutch cities that made certain payments (such as parking fees) dependent on the chipknip quickly discovered that this presented an insurmountable problem for people from outside the city, or even outside the country.

A classic example was the imposition in the city where I live of chipknip parking fees – just months after the euro was introduced in 2002. German visitors, who often came from over the border to shop, now had the advantage of having the same currency as in Holland – but couldn’t use it to park their cars, for only chipknip payments were allowed. Not having Dutch bank accounts, they were unable to obtain the necessary cards; so they shopped in Germany instead, and turnover in local shops plummeted. The whole misconceived scheme finally collapsed about ten years later, and Dutch banks were forced to refund their customers any money remaining on the now useless cards.

But they keep on trying. One of the latest assaults on the use of cash is the elimination of all but a couple of supermarket cash checkouts – at the other half-dozen you have to use plastic. Since cash is ‘legal tender’ and businesses cannot actually refuse to accept it, they keep a minimum number of cash checkouts open. And guess what has happened: I now regularly see a dozen people standing in line at each of the remaining cash checkouts, while several plastic-only ones only a metre away remain unused and the cashiers there can be seen twiddling their thumbs. The supposed inconvenience and delay seems not to discourage people from waiting to pay cash, especially for small transactions – even though signs at the checkouts say you can use plastic for any amount. Deep down, people want to use cash – it’s part of their perception of how society should be. And it isn’t just old people who stand in line at the cash checkouts, but 80-90% of all customers. In Germany there’s even a national movement to promote and preserve the use of cash.

Another recent piece of nonsense is ‘contactless’ payment, whereby you can use your card to pay for things without a PIN number – so no security. Of course that means the card can be misused if it’s stolen – but ‘only’ for €25 per transaction, and just think of the ‘convenience’ of being able to pay in two seconds rather than ten…. Meanwhile, I’ve had the contactless function removed from my debit card.

So the banks and supermarkets have come up with another trick: self-scanning. You pick up a portable scanner as you enter the shop, scan everything you put in your trolley, and then pay for it all electronically at yet another machine, without ever coming into contact with a human being. Young people certainly do use this system; but many still seem to prefer exchanging even a few words with a flesh-and-blood cashier, and handling paper or metal cash to pay for their goods. And if you make a mistake with the scanner or the rest of the machinery, you may well find yourself humiliated by a loud computerised voice telling you and everyone else around you that you’re effectively a shoplifter. Not quite the same thing as going round to the ruddy-cheeked local butcher who gave your kid a free slice of salami or liver sausage and asked if your mother was recovering well from her broken leg.

What we basically want most is human contact – and that includes tangible cash, handled by real people. How much our cash can matter to us became apparent in 2005 when the Swiss National Bank held a competition for a new series of banknotes. In the old days banknotes survived in the same form for decades on end; and when I moved to Geneva in 1975 I was amazed at the old-fashioned, colourless appearance of Swiss money, which looked as if it had been designed well before the Second World War. Even today later Swiss coins look the same as they did then; but while I was living there a new series of brightly coloured banknotes was introduced. Since then the ‘shelf life’ of banknotes has decreased, owing to the risk of forgery; and by 2005 yet another new series was clearly needed.

After short-listing half a dozen graphic artists, the Swiss National Bank chose a daring series of designs by Manuel Krebs. Unfortunately he had focused on explicit anatomical depictions of blood vessels, lungs, an embryo, and even a skull as the watermark on the 1,000-franc note. Perhaps the bank felt this was trendily modern; but the Swiss public strongly disagreed, and so great was the protest that the winning entry was eventually rejected in favour of the runner-up, the work of fellow designer Manuela Pfrunder. All very embarrassing, especially for Krebs; and even Pfrunder’s designs were heavily revised and then held up by technological snags. But last year the new 20- and 50-franc notes finally came into circulation, and the rest will follow between now and 2019.

I’ve seen the Krebs designs, and can frankly understand why they were rejected. You don’t want to be confronted with pieces of Damien Hirst-style experimental art every time you go to the shops; and banknotes remain symbols of the nation’s everyday life, and will continue to be used, whatever banks and businesses may hope.

In the end, cash matters.

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