A cashless economy has been a staple of human thinking for millennia. The Garden of Eden was a cashless society. H G Wells portrayed a cashless society in The Time Machine.
In that classic novel the upper echelon of society, the Eloi, pursued a life of indolence and luxury, living, it seemed, off the bounty of the land. There is, however, no such as a free lunch, even in a cashless economy. The Eloi eventually paid the price with their own lives, after being lured underground and eaten by the Morlocks.
Likewise Star Trek has always been portrayed as a cashless society. And The Village in cult television series The Prisoner had a cashless society at its heart. It operated on a system of undefined credits.
Given that none of the captive villagers ever seemed to work to earn their credits, perhaps it was an example of a guaranteed universal income system.
Cashless economy: dream or reality?
Is a cashless economy actually possible? Many people think so. They point to the likes of Bitcoin and ApplePay as viable alternatives to cash. But they are missing the point. As clever and as high-tech as they are, these are cash equivalents rather than cash replacements.
Discussion of the possibility of a cashless economy has an embedded quasi-philosophical issue. How does one define cash? A simple approach is to describe cash as physical money. A truly cashless economy, then, will be one that has done away with physical money.
Life Ball in Vienna, courtesy of SIX, © Life Ball, Jürgen Hammerschmid
The Zurich-based provider of Switzerland's financial infrastructure, is active, even hyperactive, in its attempts to reduce the risk of physical money. SIX Payment Services (SIX) gushed recently that it is cementing its position as a leader in providing cashless money solutions for events.
It says it has been central to enabling a range of events across Austria, Belgium and the Netherlands to be cashless this year. SIX says that it has already provided or that it will be providing cashless solutions at the following events in 2017:
- Formula 1 World Championship, Austria
- Life Ball, Austria
- Hahnenkammrennen, Austria
- Eurosonic Noordersleg, Netherlands
- Fifteen Seconds Festival, Austria
- Nova Rock Festival, Austria
- Electric Love Festival, Austria
- Boomtown, Belgium
- Moto Grand Prix, Austria
Cashless money is faster
It states that cashless transactions are typically much faster than cash purchases, meaning that queues are reduced and fewer staff required, saving the event organisers additional costs. Cashless events also eliminate the need for additional security required to handle and store cash.
In the past three years, it calculates that it has now tripled the number of events for which it has provided cashless payments solutions. It then adds that it plans to continue to grow its cashless proposition in the future.
“From music festivals to motor racing, we are able to provide and service their individual needs which are sometimes very different,” explains Thomas Grabner, managing director of SIX Payment Services in Austria.
WiFi and temperature control
As well as equipping the area with a secure internet connection, SIX says that it also ensures that its terminals will function in all environments and temperatures – from -20C to over 45C.
However, even his own colleagues, are not prepared to accept cashless payment, says Andrej Eichler, head of financial industry services at SIX Payment Services in Zurich.
He has spent his entire professional life installing and maintaining networks of automated teller machines (ATM) and payment cards programmes. He feels very strongly that we will never achieve a fully cashless society and is not afraid to say so.
A true believer in demand for uncontrolled payments
Andre Eichler, SIX Payment Services, courtesy of SIX
“I am a true believer there will always be strong demand for anonymous uncontrolled payments, for good and unfortunately also wrong reasons, like from criminals. We are helping to automate ATM estates to reduce total cost of ownership or introducing features such as QR-based withdrawals.”
“If I want to reward a waiter for good service, I want to tip in cash to ensure the waiter gets the tip. If I pay using a card the waiter won't receive the tip. The boss will likely pocket it. And my grandmother still likes to send birthday cash to her grandchildren.”
“Another issue is that people like to feel secure. The money I own, if I want to I can take it home with me and count it. A small number of countries [including the UK] have passed the 50% usage of means of payment other than cash. It might take another decade to reach 65%.”
Strong fan of a cashless economy
He is, though, a strong fan of cashless payments for personal use, including the rapid transmission of money to his children should they need it. P2P payments like TWINT in Switzerland do the trick from mobile to mobile.
From the purely technical perspective, he is a fan of tokenisation as practised by Apple. “Apple issues a token valid for a limited time for a specific payment,” he says. “You can use your phone as a means of payment. If the phone is stolen, the token is rendered worthless. You do not lose your cash.”