The growing advocacy in favour of a cashless world might sound attractive, popular and convenient – at least that’s how it’s being depicted. But who’s depicting it? Who’s behind this global PR campaign and why?
The answer lies in simple economics and big banks’ perpetual search for profit. Cash is not profitable. It must be produced; it must be managed and dispatched; it has to be protected when in transit and must be constantly checked for fitness, otherwise it is shredded and recycled.
Yet, cash is also the cheapest payment method for the public. In fact, it “brings them [banks] few profits, yields no usable data, and generates tedious administrative requests from government agencies”. But banks are not alone. There are other players in the payments world that are in favor of the disappearance of cash because they all know that an already profitable business would be even more so without the currency threat.
To a lesser extent, governments would benefit from a cashless society as it would offer greater control over financial transactions. Nevertheless, there is growing evidence to support that such a scenario would only make payments more anonymous and ethereal. Banks, like governments, want greater control of payments, but for other reasons. They know that “whichever part of the economy is left to cash is out of their market” such as retail spending (mostly carried out in cash) and other smaller transactions that are useful to better profile consumer habits.
Finally, contrarily to what is often believed, digital currencies also have a high maintenance cost. A Deutsche Bank survey has found that up to 7.3% of their revenues are spent on securing their IT systems and transfer lines, double the amount spent by other industries.
The bottom line is that the push for a cashless society is far from unbiased and the greatest losers will be the usual suspects: the public.
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