As alternative payment methods become increasingly popular, central bankers are starting to worry about the security risks linked to a decline in cash usage. This summer’s Visa breakdown in the UK is a very concrete example of how vulnerable many economies have become to system failures and the risks linked to dependence on electronic payments. Indeed, the country came to a standstill for what seemed like a never-ending 8 hours.
Quoted by Politico during a conference, Governor of the Austrian National Bank Ewald Nowotny said “Increasingly, central banks insist that cash will also play a role. We do not foresee a totally cashless society,” particularly making reference to a scenario where there is an energy blackout.
With a growing number of essential services moving to the digital world and with it, more intermediaries that are taking on the role of facilitators of this or that service, the risk of an attack or a breach grows exponentially, increasing vulnerability.
This is why a number of regulators “argue in favor of keeping a robust system in place – ie., cash.” Sweden has ruled that public entities must accept cash while the British government is working to preserve cash as a payment method. In June, the EU also announced that it would not impose any restrictions on cash usage.
“When the trolley came around on the train and the card payment wasn’t working, the only people who could eat were those with cash […] there is really no backup”, commented Kevin Curran, Professor of cybersecurity at Ulster University in Londonderry, Northern Ireland, in relation to the Visa breakdown.