Countries like Sweden and India are pushing for a totally cash-free society. But as more shops and transport networks insist on electronic payments, where does this leave the small traders and poorest citizens?
Cash Free Society
In the first place, in London, we are hardly using cash any more. Almost everywhere acceptance of contact-less card and touch-and-go mobile technology are widely accepted for payments. Even Buses in the city no longer accept notes or change.
As a matter of fact, I like the idea of putting a fiver on the counter, and get my fish and chips. An all-electronic currency forces me to get permission from someone else to complete that transaction. Many major cities around the world are in the process of relegating cash to second-class status. Some London shops and cafes are now, like the capital’s buses, simply refusing to handle notes or coins.
Buskers and homeless people will not be able to accept spare change. In addition it will affect the market trader, the street fund-raiser and the donation box. Could we see a whole city go cash-free? Cities big and small are at the forefront of a global drive to go digital. Many of us are happy to tap cards or phones to hop on a bus, buy a coffee or pay for groceries, but it raises the prospect of a time we no longer carry any cash at all.
Exclusion of Low Income Citizens
There are concerns raised about conforming a two-tier system resulting in the exclusion of those on the lowest incomes becoming disconnected from mainstream commercial life by their dependence on payment with cash.
Modi’s Bold Move
Again, in India, the question of how the poor will connect with the digitised world of the middle-class consumer is now of utmost importance. In November, the prime minister Narendra Modi issued the removal of 500 and 1000 rupee notes from circulation. Modi’s government believes restricting currency and encouraging methods of electronic payment will help fight corruption and regulate India’s “black” Market.
India’s First Cashless City
In like manner, Modi is in favour of the state government to create “smart” cities by connecting their public services with latest on-line technology. Not to mention, Officials are aiming to make Chandigarh, India’s first cashless city. Identically, the government of Goa is attempting to turn its capital city, Panjim, cash-free by offering discounts on digitally purchased train tickets. Additionally by setting up classrooms to teach small traders e-payment technology.
Cashless or Senseless?
On the whole, huge queues remain outside banks as many Indians continue to demand cash. Moreover, Some of the poorest street vendors cannot afford card readers, and have struggled to operate Paytm payment transfers on their cell phones. Aires Rodrigues, a human rights lawyer in Goa, says traders in Panjim are suffering. Rickshaw drivers and fish market sellers are left with no alternative of accepting payment from middle-class customers now inclined to do everything digitally. “It’s senseless to try to make everyone go cashless,” says Rodrigues. “The government seems to have lost sight of the plight of the common man.”
By the same token, In Amsterdam, homeless people selling Street magazine Z!, the Dutch equivalent of The Big Issue, now struggle to find customers still using cash. Van Dalfsen says he is now talking to a major telecoms company to try to find a simpler way for homeless vendors to accept payment using only their mobile phones, perhaps with help of unique QR code on their ID badge. In the same fashion, many of the world’s poorest people, remain without a bank account. So even if they own a mobile phone, most fall back on cash.
Mobile Money Transfer
Moreover, Kenya may offer a guiding light here, having found a way to allow citizens without access to a bank account into the cashless society using cheap mobiles. Launched in 2007, M-Pesa has become the world’s leading mobile money platform. By allowing millions of users to transfer money by sending text messages and store their funds digitally. Similarly, in Zimbabwe, last year’s cash liquidity crisis led to distrust in the banks. Yet helped mobile money platforms flourish as an alternative means of doing business. Furthermore, the country’s most popular text-based service Ecocash now secures more than six million users.
Common Payment Eco-system
Overall, Dave Birch, director of innovation at UK firm Consult Hyperion, thinks it would be foolish to insist on clinging on to cash on behalf of the poor. “If you keep people trapped in a cash economy, you leave them to pay higher prices for everything. You leave them struggling to access credit, and more vulnerable to theft,” he says. The challenge for banks, regulators, innovators and officials keen to push forward “smart city” initiatives, is to make sure evolving platforms are accessible and keep everyone interconnected. In essence, if we can’t find a common payment ecosystem, we may find ourselves wandering through divided cities.