Thursday, January 05, 2017

This Place Will No Longer Accept Cash

I. Where have all the rupees gone?  India is phasing out cash. In the US, the penny costs more than its worth in exchange and may be eliminated. In the global trend to "demonetize" (that is, "strip" official currency of value), will we have to rely on "blockchain" accounting systems? And: will our money be safe from electronic theft? Stay tuned! Before you know it, we'll be resorting to barter systems and new forms of "black market" trading. 

II. Living in a "red state" dominated by Republicans, I have found the demonetization process at work even locally. That is to say, this is happening regardless of the party in control, or geographical location. A bulletin arrived recently in the mailbox, delivered by postal service, that reads in part:

"[Place X] Will No Longer Accept Cash

In an effort to improve security, accounting procedures and productivity, [Place X] will no longer accept cash for services. This means bills, citations, fees and other payments to [Place X] will only be accepted with a check, money order, and credit or debit card. 

[We] hope going cashless is not too much of an inconvenience [haha], but [Place X] also has online payments . . . so people could pay at home or work [assuming they have a home, work and a computer or smart phone].

There are three overriding factors [that] contributed to the decision [by whom?] to not accept cash: simplicity, security, and timing.

In terms of security, there is less of a worry about cash floating around [Place X] and it makes bookkeeping and keeping track of bank deposits a lot simpler.

Cash is inefficient. 'It is expensive (and dirty) to handle cash* -- you have a natural loss; you have to pay staff  to count, deposit, and reconcile it; and it increases transaction times,' [no source for this quotation] No cash means no traveling to and from the bank. Plus, not handling money will make [Place X] safer.

The improved procedures will be effective January 1, 2017 . . ."

*Ludicrous!  The mail is "dirty;" credit cards are "dirty." This characteristic never stopped their use before. Wash your hands!

Paper money has been widely used for nearly 1000 years. "Genghis Khan was instrumental in the spread of paper money as currency. . . [I]ntrigued with the paper money he discovered when he conquered China in the 13th Century, [h]e used paper money as a uniform currency across his vast empire. " (Source: "A Short History of Money," link here.)

"Black markets" (informal economic exchanges not authorized by the ruling party) have probably been around since there were more than a handful of people on Earth. Going back to cashless will inspire a revival of bartering, trading and other creative forms of exchange. People will want a fall-back position when computer systems crash or hackers come a'hacking.

I'd be willing to barter with bottles of wine and sacks of coffee beans, among other things. How about you?

Today's Rune: Breakthrough. 


Charles Gramlich said...

A big issue is that with cash a thief can steal limited amounts of it at a time. When it's all electronic, a thief can steal it all.

Barbara Bruederlin said...

We have been seeing creeping demonetization here in the great white north for some time now: first the elimination of the two dollar bill, then the one dollar bill, then the penny.

There is now talk of getting rid of the Canadian nickel. The Canadian nickel! It has a beaver on it and everything!

Fascinating what is happening with money in India and the fact that you need to use a credit card to buy a glass of wine on an airplane. I think I will take you up on that wine barter offer.

the walking man said...

I have never been in favor of cashless, less opportunity, anything. I like to use dirty untraceable money but then it is only worth the ink and paper it is printed on. I doubt not having cash raises the value of the numbers on the bottom line.

In reverting to a barter system man I am going all high power, weed and firewood.

thejspotjodi said...

Erik-I almost always use plastic. Hate carrying too much cash-ola. Back in the day, I traded haircuts for wine! xo