The barmaid passed the pint of Forward Pass over the bar to me, smiling.
“Thanks” I grinned, holding my smartphone out.
Grabbing the electronic card reader, she held it to my phone, which dutifully chirped, signifying that the £3.60 had been transferred from my current account into the club’s coffers.
Taking my pint to a quiet table, I sat down, musing about the transaction.
Only two years ago, my club would only accept a card payment if the transaction value was over ten pounds. This was to cover the 2.0% transaction fee levied by the card processing company.
Not being a heavy drinker, I rarely spent over ten pounds during a post-work visit to the club, except on Friday nights, when I would meet with the “Last of the Summer Wine” crew and I would stand my round.
So, on Fridays, I would always hit the ATM at the Co-Op on the way home and withdraw enough cash to cover me for the weekend, and for coffees and snacks at work for the following week.
Two things have caused a seismic shift in how we pay for things.
In 2014 Apple introduced Apple Pay, enabling contactless payment transactions to be made using Apple smartphones. Initially, like a lot of people, I was suspicious of this as a means of payment.
However, six years of advances in security including the use of thumbprints and facial recognition technology has meant that I now feel much more comfortable with using my phone to pay for items.
Some retail outlets such as Tesco’s limit the maximum contactless transaction value to £30.00, but in many places, including department stores and garages it is still possible to pay using a smartphone or a debit card.
The other thing that initiated a quantum shift in payment methods is that the UKGovernment banned debit and credit card surcharges on January 13th 2018.
All of a sudden, retailers were no longer able to charge for the use of a debit card or credit card payment, so almost overnight the need to carry cash became far less urgent.
So, is cash being phased out as a means for paying for goods and services?
Cash has been with us for over 30,000 years, before written history – and evidence of accounting using tally sticks goes back to the later stages of the stone age.
The Ancient Roman author and scholar Pliny the Elder (AD23- AD79) writes of the best woods to use for tally sticks.
Cash is a meaningful and tangible token of worth, and is universally accepted within a society as having a standard value – as opposed to barter, where individuals trade specialist skills in exchange for goods and services.
Because of the universal acceptance of cash, both coins and notes, it is used as an instant way of paying for goods and services. It is also largely untraceable, so whilst two individuals may conclude a transaction there is no record of payment being made or received.
One of the advantages of anonymising transactions, is that it makes the use of cash attractive for the conduct of criminal activities, and in the past ransoms have been demanded to be settled in unmarked used bank notes.
Even otherwise honest members of society may unwittingly commit crimes by defrauding the government of income tax.
Tradesmen who would never steal from, or swindle their customers may routinely offer a discount for cash – meaning that such transactions never go through their books, and are therefore free of income tax or VAT.
This benefits the tradesman, as the cash received may be used for personal spending, and the buyer saves overall on the cost of the item or work.
There is, however, an indirect advantage to this, which is that the cash earned is frequently injected into the local community, either in the local shops, or pubs and clubs.
Call me a cynic, but the rapid introduction of digital banking is positively welcomed by governments globally. as all transactions will be traceable and identifiable.
Only a year ago, the BBC reported that the use of cash is in decline, and will only account for 10% – 15% of all transactions by 2026.
Obviously, there are also advantages to a business becoming cashless. Retail premises such as pubs, clubs and restaurants may save money from not having to buy expensive sales terminals and then enjoying lower insurance premiums as a result of having no cash on the premises.
Intangible expenses such as employee time wasted in cashing up, and paying in money at the bank’s premises are immediately removed. The inadvertent acceptance of counterfeit money is also eradicated.
Losing cash forever, would, in my ‘umble opinion, be a bad thing, as the elderly, the poor and the disadvantaged would be unfairly penalised if their way of paying their way were denied to them.
The merciless march of automation and the ruthlessness of the digital economy may well change our society for ever.
Brave New World?