WHAT IS HAPPENING TO OUR CASH?

Author: Rita Sharpe & Mark Kilgour

Have you noticed how we are using cash less and less? Why is this do you think? Is it all about convenience, the collection of information, bank charges? - Who benefits most from the demise of cash?

Could it be the banks and large retailers?

High Street banks and supermarkets seem determined to control how we use our own money and increase their profits at the same time. They both make huge profits already and are now increasingly appearing to find ways to make even more by making it ever more difficult to use cash. Indeed, NZ banks are some of the most profitable in the world, making billions of dollars in profits in 2023 (1Rob Stock, 11th Aug 2023, The Post).

Banks used to welcome customers to their branches but now there are less branches and we are being encouraged to use internet banking instead. Is the aim to reduce staffing numbers so they save money on salaries? What do we customers get out of it, especially us older ones? Another apparently service that is making money is contactless transactions such as PayWave. It is even easier to use your cards than cash – is this just what they want given the fees that are charged each time you tap? Consumer NZ has recently identified just how large those fees are (2RNZ, 16th Nov, 2023). Every time you swipe or tap your contactless card such as payWave, or use your credit card, someone clips the ticket. Transaction surcharge fees of 1-2.5% may not seem like a lot but on each transaction that adds up. Imagine how much money you would make if you took 1c out of every dollar spent on every retail transaction? This begs the question: who wins when we can’t get access to cash?

Of course, some big businesses and supermarkets absorb this transaction fee but for your small local businesses this is yet another charge. More and more cafes and small owner-operator businesses are now having to pass this cost on to their customers, which they find very embarrassing. They do explain that by using your EFTPOS and pin instead of PayWave you can avoid being charged. My suggestion is - use cash! Another part of the card only drive is information. In China you can pay with card but also some places allow you to pay by facial scan3. In the US and other countries, you can walk into a store and walk out without swiping or seeing a teller at all. Your items are automatically scanned, and your money deducted from your account. Matching your purchase data to you through the financial payment method is a wonderful tool for organizations who want to match customers to purchases. Of course, all this begs the question of data security, trust, and civil liberties. You may trust your supermarket (may), but do you trust their data security 100%? Can anyone trust data security systems 100%?

Supermarkets are also reducing labour costs in a very direct way whilst insisting the changes are there to help the customer using ‘self service’. Self serve checkouts can be very useful if you are in a hurry and you only have a few items BUT there have always been the express lane checkouts for fewer items so why do we need self-service? Have you noticed that many of self-serve checkouts are ‘card only’? Have you noticed that the number of staffed checkouts is less than previously, making us use self-service checkouts? If they gave a staff discount for checking out our purchases ourselves then maybe it would be a benefit to their customers, but I’m not sure that benefit to customers is their primary priority?

More and more cash are not accepted for many services and so cards and technology is the only way we can make some purchases. I was recently in Heathrow airport in London and at the only cafe at the bus terminal there was no interaction with staff. Orders were made on a screen and payment had to be made by card. How do people with no technical knowledge get a drink? These things are a problem not just for many older people but also those with other challenges and there is no ‘other’ option.

We need to keep using our cash before we lose it (4Anna Murray, 26th Oct 2023, 1News). How else would we make street donations to charities, how can we give a koha at meetings and events, how can our schools raise money by having ice block days etc.? I have just seen the programme for the Hamilton Arts Festival. There are a great variety of events, but I noticed that at the event evening festival hub cash will not be accepted and no cash out facilities will be at the site. I was looking forward to going a couple of times but now I will not. For me the equation is simple, the consumer must decide. If a shop does not accept my cash, I will go elsewhere. If the bank closes too many branches or ATM’s, then I will change banks. For me cash still has an important place (5Hamish McRae, 9th Mar 2019, The Guardian), and we will miss it when it is gone…

1Rob Stock, 11th August 2023, The Post “What World Bank, Reserve Bank and Treasury data says about NZ banks’ high profits” https://www.thepost.co.nz/business/350052582/what-world-bank-reserve-bank-and-treasury-data-says-about-nz-banks-high-profits

2Leeloo Tang, 20th Mar 2022, Revisiting Facial-Recognition Payment: Old Problems Still Lingering, Neilson Norman Group, https://www.nngroup.com/articles/facial-recognition-payment/#:~:text=Now%20facial%2Drecognition%20payment%20(FRP,at%20the%20checkout%20in%20stores.

3 RNZ, 16th Nov 2023, “Consumer NZ faults businesses over excessive card surcharges”, RNZ https://www.rnz.co.nz/news/business/502580/consumer-nz-faults-businesses-over-excessive-card-surcharges).

 4Anna Murray, 26th Oct 2023 1News , “The end of cash? What a cashless economy would look like By Opinion and Explainers Editor”, https://www.1news.co.nz/2023/11/05/the-end-of-cash-what-a-cashless-economy-would-look-like/

5 Hamish McRae, 9th Mar 2019, The Guardian, “A cashless society is closer than ever before, and it’s a grave threat to our civil liberties, https://www.independent.co.uk/voices/cashless-society-uk-philadelphia-older-people-bank-cards-low-earners-poverty-a8815271.html