By Lyndsey Hall
From contactless cards to Apple Pay, we’re increasingly becoming a cashless society. But is it all for the convenience of the consumer, or the benefit of the banks and businesses?
Parking in a cashless society
If you’ve driven and parked around Sheffield lately, you might have come across one of the many carparks that no longer have Pay-and-display machines. Instead, a sign asks you to call a phone number and set up Pay-by-phone parking, which takes a few minutes to set up the first time (not ideal if you’re caught unawares and in a rush), but claims to save time on future visits. There is also a PayByPhone app users can download to make parking even easier, which includes a countdown timer and sends notifications to your phone when your session is about to expire so you can avoid getting a ticket, or even extend your parking session from anywhere.
That all sounds pretty beneficial and convenient, right? And it is. We’ve all found ourselves short on change at the parking meter before, or resented having to stand in the rain and run back and forth to put the ticket in our car window when we’re late for a meeting. But the biggest benefit isn’t being enjoyed by carpark users, but those with access to the data collected by apps like this.
Imagine being a city council official. How illuminating would it be to be able to see exactly how many vehicles are parked in carparks around your city on a given day? Or at what times the volume of parked cars is at its highest on a weekend? How much easier would it make your job to know which areas of the city were the busiest on which days, and to be able to recommend another carpark with spaces available when one is full? The ability to track trends and view live data makes the jobs of many local officials much easier, whether the information is used to allocate budgets, decide on Christmas extended opening times, or just manage traffic using the ‘smart roads’ system.
Train travel in a cashless society
The government also plans to make all rail travel cashless by 2025, and who can blame them when the Royal Mint keeps changing the currency? Smaller railway stations are some of the last places where the old pound coin is still accepted by ticket machines instead of the new coin. It would be understandable if those machines are not changed until a completely cashless machine is installed, as the cost to change the machines at every station in the country when a new coin or note is released is astronomical.
Shopping and eating in a cashles society
Shops and restaurants are also jumping on the cashless bandwagon, with Waitrose piloting a cashless payment system and companies like Tossed, a healthy eating chain, only accepting card payments from customers. It’s become the norm for waitresses to bring a card reader to your table along with the bill, and adding a tip to your total when entering your PIN has been commonplace for years.
How businesses benefit from a cashless society
Banks and big businesses also benefit from a data injection, as well as a cash injection, every time we shop with our cards. Everything from where and when we buy, to what and why (Christmas shopping, anyone?) can be collected by these companies and then sold on to other retailers to inform their marketing and advertising departments. Using this information, companies can determine the average wealth of a consumer and use it to their advantage. Prices could be altered depending on the location of the branch or shop, or even the time of day, in a similar way to surge prices used by taxi companies like Uber.
Now, this may not bother most people as the information stored is purportedly anonymous, and with the new data protection law coming in next May (GDPR), there’s less risk of companies keeping your personal or sensitive data and using it to their benefit without your consent. But, moving to a cashless society is not without its risks.
The consequences of a cashless society
If cash were ever to be completely eradicated, as suggested by a member of David Cameron’s campaign team in 2015, we would be completely reliant on computer systems, which have been proven to be vulnerable to cyber-attacks. In 2015, £755m was stolen from Britons via online fraud and much of it transferred overseas before it could be recovered. The cost to the economy is already sky-high, and would likely continue to increase if more and more transactions were made online.
In the same way that moving completely to electronic cars would mean that in the event of an apocalyptic event there would be no way to travel long distances securely, moving completely to a cashless society would mean we couldn’t access our finances and would have to resort to trading in tinned goods.
As convenient as cashless systems are for the consumer, there is far more to be gained by the banks and organisations that collect the transactional data and use it to their benefit. What are your thoughts on the slow but steady move towards a cashless society? We’d love to hear from you below in the comments or on Twitter.