On Treehugger Lloyd Alter is wondering about the future of physical cash in the era of the pandemic – and following it – as he compares it to various sorts of plastic cards.
Will this change after the pandemic? It is likely to. Cashless transactions are very quick and convenient for those who have money or credit, even more so if you have an Apple Watch. A lot of retailers aren’t interested in you if you don’t. People who previously used cash for small purchases like their cup of coffee are now paying with plastic. People who handle food and coffee should never have been dealing with dirty dollars in the first place. People may be reticent about handling money. People like me are getting really tired of collecting all that change. And people are really getting used to it; Nancy Skola of Politico talks to the head of Paypal:
PayPal’s Schulman sees all of this as part of a coming shift: Every transaction that we choose to do virtually instead of with cash builds up our muscles for the change, getting us comfortable with never touching that Alexander Hamilton bill again.
Or it could go the other way when people are poorer and less secure. It’s easier to track what you have when it is in your pocket or mattress. As Timothy Rooks wrote in DW: “In times of crisis, people like things they can trust. Things they can hold.” There is something to that.
As I read Alter’s quote of Rooks, it occurred to me that we need to put cash & plastic on the same footing for purposes of evaluation. Never mind that plastic is denominated in cash; it’s a valid point, but I think we can set it aside for the moment. Think of them as simply alternative currencies. Here are the points that Alter made in his post:
Plastic is more convenient than cash. True, and I don’t see this changing.
Plastic is less likely, in the minds of many, to transfer germs. That is currently true, but is this a permanent condition? I can easily envision – because we’re mostly there already – a machine that accepts cash and dispenses sterilized change. All we need to do is add the step that sterilizes the cash. Maybe a UV source, maybe a spray-down with an antiseptic? Folks, I think this would be easy. If we want to further reduce exposure, we could finally move on a proposal that my Arts Editor supports – non-production and even circulation reduction of pennies and nickels. Similar moves have taken place in the past with no disruption to the economy.
Now, moving on to an explicit lesson from a course I took in college 35 (!) years ago:
Plastic is far easier to trace and analyze than cash. And this will remain true. This is a trivial task for computers, and the results are demonstrated everytime you see an ad in your browser related to something you’ve recently bought. Cash, much like bitcoin, is anonymous – you take it out of your pocket, hand it to the retailer, and walk out of the store. Only store security cameras can vouch for what you’ve bought, and now we’re talking a far more computationally-intensive operation, because it’s facial recognition (however, the computer recording the transaction could be synchronized with the cameras).
When it comes to these comparisons, it may seem like plastic has an advantage. But it only takes one middlin’ disaster to render that advantage questionable, and that disaster is when they become unusable. Whether the credit card networks go down hard, for days on end (think: solar storm, terrorist attack, national adversary worming its way into the credit card companies), or some sort of mass corruption and/or theft of credit card data and funds occurs, the credit card industry is dependent on trust that they are up & running properly 24 hours a day. If they lose that trust, then all those retailers will walk away, because their customers may simply say You want credit card? I’m taking my business elsewhere. This demand happened to a local collection of eateries at the local mall Rosedale, BTW, before the pandemic hit.
But cash, for all of its faults – and they’re not all listed here! – remains operational in the midst of a credit card meltdown. Indeed, if a disaster occurs, the biggest trouble may be that banks cannot deliver enough cash to keep the economy well-greased. It’s not hard to be capable of handling cash 24 hours a day. The only, but substantial, concern is security.
And then what happens if & when a vaccine and/or cure is found for the coronavirus? Do we have permanent paranoia? Or do we return to prior norms?
It’ll be interesting to see.
