It was historian AJP Taylor who first said 'nothing is inevitable until it happens'. Taylor was a renowned figure whose well-researched volumes and frequent television appearances established him as a twentieth century icon.
Forecasting the future is difficult, even for those with almost perfect knowledge of the past. There are just so many variables that nothing can be regarded as certain. And are there dangers in assuming something is 'inevitable'? In business we need as clear a vision as possible of the future market environment. Inevitably there are some things we cannot predict. All decisions involve risk and uncertainty. Without these where would the insurance industry be?
So, what are the uncertainties that surround the much talked about cashless society? Well, to begin with, is it just a first world issue? Although we have the well documented history of MPesa in Kenya, how typical is this in countries with high levels of poverty, an aversion to new technologies and large numbers of unbanked individuals?
In 2017 Business Insider reported that 2 billion people did not have a bank account or access via a mobile phone or other device. Worldwide, we hardly have the environment conducive to such a shift away from cash.
Where, when and why will cashless become a reality and, the key question, who really benefits? And while we're at it, does an increase in digital payments mean cashless or a combination of less cash and less card payments? Experts are beginning to question the 'inevitability ' of cashless. This week, an article on Finextra stated that in Germany, for example, Deutsche Bank research has concluded that 'rather than sounding the death knell for cash, the rise of digital payments will instead lead to the extinction of plastic cards'.
Even in a first world country, do we have the infrastructure in place to replace all cash payments? What payment options are available in a cashless environment? Is the technology infallible and if not, what is the backup? Apart from cash!
Another important question is, despite the hard sell marketing, are we sure people want a cashless society? Given the freedom and ease of use associated with it, is cash irreplaceable for many people? If cash's unique features cannot be replicated, is this a bad thing and how will people react to its removal? (Cash Matters, 20 January 2020). Indeed, are we already seeing the seeds of a backlash campaign?
In 2018 the Guardian featured an article entitled 'The cashless society is a con and big finance is behind it' (19 July), the article considers the difference between anticipating and creating change and in particular the practice of 'nudging' customers. It concludes that 'if a powerful institution wants people to choose a certain thing then the best strategy is to make it difficult to choose the alternative '. It goes on to say that 'the call for digital change is a direct result of a hegemonic project on the part of financial institutions'. Are financial institutions serving customers' needs or manipulating their behaviour? What are the limitations of such an approach?
There are a number of challenges facing proponents of a cashless society:
- In a truly cashless society there needs to be access for all to alternative payment methods. Is this really achievable or will it be discriminatory?
- Can digital payments become infallible? If not, what is the backup in the absence of cash?
- Is there public support for the move or does the only way of achieving a cashless society involve denying people access to cash?
- Is a cashless society 'inevitable' or is it, as has been stated elsewhere, just an 'elusive dream' as far as most countries are concerned?
In the meantime, cash continues to play an important role and will do so for the foreseeable future, so the question is 'How do you best deal with it?' We can help. Don't delay the inevitable. Contact Glory now.
