The pandemic and cash » Tech T100

IMAGE: Didier Weemaels on Unsplash

Apparently, the relationship between the pandemic and the use of cash dates back to its beginnings, when we still knew very little about the details of the transmission of the virus, and mistakenly believed that it could be transmitted by contact with surfaces.

That hypothesis took time to prove false, and in fact, it has left us with some habits that seem difficult to eliminate, such as the use of hydroalcoholic gel in many places (completely useless, except because it makes us all go with a little cleaner hands) or the abandonment, by many people, of the use of cash, identified as something dirty and dangerous.

If we add to this false information the effects of a confinement during which we used the credit card to buy all kinds of products through the network, we have the recipe for the perfect storm: the pandemic has caused many people to abandon the use of cash, and that many establishments now accept payment by card in any of its forms (card as such, telephone, watch, etc.) for any transaction, even very small amounts.

In reality, the pandemic has only been one more step in the abandonment of a technology, cash, which had been in sharp decline in many countries for some time. In certain areas of the United States, China or Sweden, for example, paying in cash can mean at least a strange look, and at most, not being able to do so if the establishment expressly indicates it. In Sweden, in fact, where only 1% of economic flows take place in cash, they are practically coming back: the abandonment of cash makes many citizens, generally older, genuine marginalized, which has led to some to point out the problems of a very fast adoption.

In other countries, such as India or Germany, cash has many more followers, although in the case of Germans there is also a recent setback due to the pandemic. Central banks have long been envisioning a world without cash and putting on the table the possibility of launching their own digital money, while many others are considering the appropriateness of the cash for many types of transactions, their poor traceability, their anonymity, and whether their abandonment will not represent a problem in the absence of a technology that meets the same requirements.

At the moment, what we are seeing is the growing difficulties of many workers in occupations and countries where there is a tradition of tipping. Room cleaners in hotels, for example, are very used in many countries to receive tips that guests usually leave on their pillows, but now, those guests simply do not have money in their pockets, and the reduction in that income, that helped them supplement their generally meager salary, is notorious.

The same happens with other occupations such as the hotel industry, in which some establishments still do not accept tips on the card due to the problems posed by subsequent accounting, or many other jobs, from someone who helps you with luggage in a hotel, station or airport to dancers in clubs striptease or even people who live on charity. In some churches, the brush is already passed electronically by adding a QR code to the coin container.

The issue is complicated by differences in customs: from countries where it is practically taken for granted that a certain percentage of the bill will be given as a tip and it is almost insulting not to leave it, to others where change is simply left or not nothing is left. When citizens get used to not carrying cash in their pockets because it is simply no longer necessary, going back can cost a lot. Increasingly, many people find themselves going to an ATM not because they need money, but simply because they are going to a hotel and need some money to tip.

On the other hand, there is no simple equivalent, some kind of apps that allows one user to make an instant and seamless payment to another, in a reasonably discreet manner and without even having to disclose phone number or identity. A problem if we think that tips or charity represent a part of the economic model that has a significant value for many people, and that the alternative of simply abandoning those habits because they are no longer convenient can end up being a significant problem for many. Will technology be capable of proposing a simple solution for those small but common payments in which no traceability is required, and without this implying a security problem?

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