A campaign group calling for the end to physical cash has launched a “Manifesto for Cashlessness”, setting out how countries can move towards an era of digital-only money.
CashlessWay, an Italian association of online payment providers, launched the manifesto at the Money2020 conference in Copenhagen this week. The manifesto outlines an argument as to why cash — notes and coins — should be abolished and replaced with digital payments like card or Apple Pay. The launch coincides with the 6th annual “No Cash Day” in Europe, which was on Tuesday and is organised by the group.
CashlessWay is obviously pretty biased — if we get rid of cash then who benefits? Guess what, it’s the online payment guys who make up the organisation. But it does highlight some interesting arguments as to why digital trumps physical when it comes to money.
One is the idea that online money makes criminal activity harder. Here’s an extract from the report (we added the link in for reference):
The European Commission has already said that it wants to investigate the connection between cash (specifically €500 notes) and terrorism. Cash, however, is desirable for all sorts of criminal purposes, not merely terrorism. Now, clearly, removing cash won’t end crime. The reason to make electronic money a firm policy goal is to raise the cost of criminal activity. Whether that crime is drug dealing or money laundering, bribing politicians or evading tax, cash makes it easy and cost-effective.
Physical money doesn’t automatically leave a paper trail as digital money does, which is perfect if you’re selling something illegal or funding ISIS. There’s no link between you and the group.
With digital, there’s almost always a register of who paid who what. That makes it easier to spot dodgy activity. (Bitcoin famously eschews this, aiming to make online money transfer anonymous much to the annoyance of regulators.)
As a consequence, CashlessWay is calling for governments in Europe to promise to: “remove €100, €200 and €500 notes from circulation within five years and €50 (and £50) notes from circulation in a decade.”
Here are the manifesto’s other stepping stones to a post-cash world that governments are being asked to sign up to:
- We will halve the total social cost of the payment system in the next decade, starting by allowing retailers to surcharge for all forms of payment including cash, except for “card present / cardholder present” debit.
- We will regulate for an on-demand electronic payment account capable of holding a maximum of €1,000 without further KYC other than unique recognition (e.g., a mobile phone number).
- We will create a privacy-enhancing infrastructure for transactions and for the sharing of transaction data, beginning with a law preventing payment cards from displaying the cardholder name either physically or electronically.
The last one might sound like it contradicts the group’s claims on criminal activity, but the idea is to protect people’s privacy so that data is automatically anonymised. If suspicious activity is identified, the regulator will be able to find out who’s behind it but by default people will be hidden. That’s the idea anyway.
Other arguments put forward by CashlessWay as to why we should ditch cash include more efficient money supply, boosting financial inclusion by offering better access to things like direct debit, and better regulation.
A world without cash might sound crazy but it’s actually rapidly becoming a reality in some parts of the world: cashless payments overtook notes and coins for the first time in the UK in 2014; Sweden has made so much progress toward turning itself into a cashless society that it now has 27% less hard cash in circulation today than it did in 2011; Denmark wants to allow shops, including restaurants, gas stations, and clothing stores, to stop taking cash; and the Bank of Korea has said it’s aiming for a cashless society by 2020.
You can kiss your hard earned notes goodbye.