Oddly, just a couple of days after posting on the benefits of using cash rather than debit or credit cards, The Current aired a segment on the rise of digital cash.
Privacy, government control, security, hackers and cyber-crime were discussed as the biggest barriers to the widespread use of digital cash and I can see that they are real issues. Also briefly mentioned were the elderly or those who are not tech savvy. And of course there will always be the stupid human error stuff that happens, like going swimming in the ocean with your cell phone in your pocket and not being able to catch the bus home from the beach because your chip is now swimming in brine.
What only received a whiff of a mention by the host and was not at all addressed by the people she was interviewing was the affordability of the technology for using digital cash. Here’s an overview of the bits that contributed to the furrows between my brows:
[4:18] The total social cost of cash is really significant because it’s not just the cost of going to the ATM and getting money now, it’s the cost of the security trucks and the armed guards and the money that gets lost and stolen and all of those other things. But there’s also a particular problem with the way the costs of cash are distributed. You know, if you’re poor, if you’re trapped in a cash economy, which is not true for many people in Canada, then the costs fall disproportionately on you. So it’s two problems really, it’s the high cost and it’s the way that cost is distributed.
Huh? This confuses me. I’m not sure how being poor and operating in a cash economy means that the costs of cash fall more heavily on you. What about all the debit fees and the incredibly high interest rates on credit cards? Or the cost of owning a smart phone or tablet?
[7:02] Well technically, the most cashless country in the world, actually in more way than one I suppose, is actually Iceland. Something over 90% of all retail transactions in Iceland are already non-cash. And then you have other Nordic, you know, Norway is up at the sort of 70% level.
To clarify, this includes all cashless transactions not just the digital cash as it is being talked about in the interview. So, debit and credit card as well as chips. Iceland, Norway and the other Nordic countries have large middle classes and the proportion of the very rich and very poor are relatively low. 21.5% of Canadians and 25.8% of Americans are considered poor or near-poor compared to 14% of Norwegians. These figures are from 2004 so it’s probably that the percentages would be higher now for Canada and the U.S. but I’m not sure about Norway (Source LIS Data Centre). I guess my point is that I worry that the large numbers of people in North America who are poor or struggling financially will not be able to afford to keep up with the technology required to operate in a digital cash world.
[11:00] I think in the medium term you’re more likely to see a sort of digital divide opening up where, you know, middle class persons such as you and I will never see cash again and couldn’t care less about it. We’ll use our mobile phones by and large to buy and sell most things. And, you know, some people will want to hang onto cash, drug dealers possibly, prostitutes, that kind of thing and there’ll be a kind of … polite society won’t use it but other people will.
This is exactly my concern. That people who are already marginalized will be pushed even further down. I don’t have a smart phone (hell, I don’t even have a cell phone), a tablet or any of those other toys that are beyond my means right now. I could have them but I would either have to go into debt to get them or chose them over other things. And I’m no where near true poverty. What about all the people who are? Screw ’em? They’re probably just drug dealers and prostitutes anyway?
This is not an anti-digital cash rant. I’m not a luddite. I like technology and think the internet is a freakin’ amazing invention. I often find myself in situations where a cell phone would come in handy and I have to talk myself out of wanting one. Just wish this program had talked about some of the social issues beyond privacy.
And speaking of technology…
I’m a couple years younger than Louis C.K., which is probably why I relate to this video so much. Including it just because it’s funny and quite frankly this post has been a bit of a downer.