July 2023

EDITORIAL: Cashless – the risk of loss of inclusion

In a world of growing uncertainty – climatically, geopolitically and economically with the growing cost of living crisis – there is often a heightened sense of insecurity, leading to many people increasingly reverting to tangible, secure and minimal-risk assets.

These are some of the unrecognised attributes of cash, and it is at times like these that policymakers must ensure that cash is readily available for those who fit this profile.

There are numerous examples throughout the world, even after the passing of the COVID pandemic, where an overstated fear of the transmissibility of cash was being peddled and people were unable to access or use cash. Some retailers refused then to transact in cash and continue to do so, banks are closing down (which appears to be escalating), ATMs were and are being relocated, and hospitality venues have joined retailers in refusing to accept cash.

The risk for policymakers is the loss of inclusion created by the unfettered and unconsidered move to a cashless society.

We have stated previously that in the Euro area alone, there are an estimated 12 to 13 million adults who are unbanked, let alone many more who use cash due to their socioeconomic status, demographic profile, or physical or psychological disabilities.

Policymakers must be reminded that these people must not be left behind.

Recently in Australia there was an online movement established to use only cash for a week. This was in response to complaints from tourists and residents frustrated at not being able to use cash and sick of paying fees on card transactions.

The availability of cash will ensure that many people irrespective of their status can buy the essentials of life with cost-free, generally safe money that has legal tender status, is easily recognisable, and is seen as consistently representing the value of its denomination.

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