The Coming Cashlessness?
On 16 November 2016, Prime Minister Narendra Modi made the surprise announcement that all 500 and 1000 rupee notes were being demonetized—they would become worthless paper within 30 days and people had a short window of 50 days (it was later shortened) to exchange their existing notes for new ones. The initially stated purpose was to stifle “black money,” corruption and tax evasion. Over the ensuing weeks, however, Modi spoke more and more of ushering in a digital economy, and digital payment platforms saw a brief uptick in demand for point-of-sale devices.
Modi’s move is one example of a growing anti-cash consensus, based on the idea that cash is linked to crime, terrorist financing, money laundering and the like. The Better Than Cash Alliance is a consortium of governments, nonprofits, philanthropic organizations, and corporations all united in the goal of moving the world away from physical cash and coin and toward digital payments. Sweden, ever the vanguard of modernism, is, we’re told, well on its way to a cashless society.
The Better Than Cash Alliance argues that by moving away from cash,
we can offer greater financial inclusion to millions.
Is Cash Still King?
Of course, many readers of this blog already live in a near-cashless state. Our paychecks are automatically deposited; we use credit and debit cards at brick and mortar stores; we shop online with PayPal or send money to friends using Venmo. When we need cash, we have to go to an ATM and get it. Cash is not just there waiting for us to use it the way it might have been when our mothers or grandmothers went to the bank every month to take out a huge wad of bills that they stored in envelopes in the kitchen cabinet next to the flour jar.
But is cash actually going away? Maybe, but probably not completely, and certainly not anytime soon. According to the Federal Reserve Bank of San Francisco’s Cash Product Office, cash continues to be the most frequently used payment instrument for American consumers. This is true across a variety of contexts, but especially small value payments.
Consider another 20th century digitization dream: “the paperless office.” Many of us work in “paper light” offices, but rare is a workplace with no printers, no filing cabinets, no signs reminding us that the communal fridge will be cleaned out on Friday. A character in Jim Butcher’s 2010 novel Changes compared the paperless office to Bigfoot, “Someone says he knows someone who saw him, but you don’t ever actually see him yourself.” Cash, like many paper technologies, will likely linger.
And yet we are seeing an explosion of innovation in the money technology of everyday life. Since 2012, according to the Fed, cash’s share of transactions in 2015 dropped from 40% to 32%. According to that same Fed data, preference for cash as a primary form of payment is declining across all age groups. In our research and from our students, we are always hearing about the fascinating—sometimes terrifying ways—that person-to-person payment apps like Venmo are shaping friendships and romances. Cashless need not be total to have an impact on our everyday lives.
Cash and Stuff
With all this talk of cashlessness, we’re often asked about the “dematerialization” of money. What will it be like when all transactions are “frictionless”?
But where others may see dematerialization, we see all sorts of new stuff. The world of digital payments depends on vast and variegated infrastructures, many interacting agencies and entities, and material stuff in the form of cables, wires, microchips, servers, air conditioners, boxes of all shapes and sizes full of circuitry, magnets, camera lenses, light-emitting crystals and plasmas, glass, metal and precious elements.
What are the cultural meanings and politics of these new technologies? How do they map onto existing social problems and opportunities? How do they create news ones?
Witness, for example, this image that circulated on Twitter the aftermath of Modi’s demonetization. Of course, a mobile money system would be happy to see paper bills pulled out of circulation. Does it matter that a private company was now doing the work that cash—a public infrastructure produced by the government—has long performed?
In Paid: Tales of Dongles, Checks, and Other Money Stuff, we asked scholars across fields, journalists, practitioners, and other folks interested in the future (and past!) of money to consider the meaning and politics of money stuff. Each chapter is robustly illustrated, like a museum catalog—indeed, the impetus was to imagine a catalog for an exhibition that never took place. We imagined a book about objects that, in their time, might have been considered trivial or trash, things that, once their network had died or their internal gizmos had worn out or their empire collapsed, would have gone to the dust heap of history. Not like the traditional objects of numismatics—gold and silver coins, hoarded, collected, and counterfeited for millennia. But physical things like the magnetic stripe credit card; digital things like the cryptocurrency Dogecoin; ephemeral things like the signature. The e-waste of money. Thinking about money stuff also opened the door to objects you might actually find in a museum, because money stuff is so often about record keeping and accounting. So, you will find point-of-sale devices alongside Inkan khipu, throw-away receipts next to Ben Franklin’s banknotes. This collision of objects creates a wonder cabinet: rather than sparking insight into Creation, we hope it sparks conversations about value, transactions, and transience—even the transience of the dream of a cashless society.
For original post - https://socfinance.wordpress.com/2017/06/26/blog-series-from-bill-maurer-and-lana-swartz-post-1-on-cash-and-stuff/
Professor Maurer will be virtually presenting on the "Data and New Technologies" session this coming July 2nd in Basel, Switzerland at the “Money, Debt and New Technologies in Africa” Workshop, organized by the Council for the Development of Social Science Research in Africa (CODESRIA) in collaboration with IMTFI and the Centre for African Studies Basel (CASB). Join the conversation! Click here for program information.