“A Mark, a Yen, a Buck, or a Pound
Is all that makes the world go round.”
(film Cabaret: Kit Kat Klub, 1930, Berlin)
“ The love of money is the root of all evil.” 1 Timothy, 6:10
“Nothing impresses people quite like a huge wad of cash. Having a gangster bankroll is an excellent way to let everyone know you’re the life of the party. If you love to show off, a gangster bankroll might be just the tool you need.”
But we no longer need flat currency- cash – to buy “stuff.”
Most “stuff” today is purchased with debit and credit cards; internet shopping depends only on electronic transfers.
A large proportion of cash, or banknotes, are used for illegal transactions, to evade tax and for other criminal activities. More than 75 % are in the form of notes of the largest denominations, the US $ 100 bill, and the Yen 10,000 note.
In the shadow economy of the underworld, bank notes are popular. The demand for anonymity is high and so is cash. The world of crime is based on cash; the narco industry could not exist in a cashless society. Money laundering, with suitcases full of cash, has become an even larger form of crime, than the crime itself.
Cash thefts in shops at their check-out registers account for the biggest fraud and theft proportion of all cash transactions. A cashier steals cash from one customer’s payment and covers it up by taking cash from the next customer’s payment, is called lapping. It is a hidden cost that is passed on to the consumer, and a bleeder of margins to the entrepreneur. Therefore an increasing number of shopkeepers no longer take cash.
Even old-fashioned bank robberies have diminished. They halved in the US between 2004 and 2014, to be replaced by the explosive growth of cybercrime.
Sweden, Denmark, and Norway are leading in the world as cashless societies, with Sweden as the forerunner.
Swedish public transportation systems have not taken cash for years. Retailers are legally entitled to refuse coins and notes. Street vendors, even churches, increasingly prefer card or phone payments. In shops, cash is used for barely 20% of transactions, half the number five years ago, and way below the global average of 75%.
According to Central Bank of Sweden, the Riksbank, cash transactions made up barely 2% of the value of all payments made in Sweden last year – a figure some see dropping to 0.5% by 2020. About 900 of Sweden’s 1,600 bank branches no longer keep cash on hand or take cash deposits – and many, especially in rural areas, no longer have ATMs. Circulation of Swedish krona has fallen from around 106bn in 2009 to 80bn in 2015.
Money is not only a means to buy “stuff” but is also a way to deal with an uncertain future. We all remember the pictures in the media of bank vaults in China and Saudi Arabia, hoarded full of US dollars, supposedly as a buffer against radical future uncertainty but in the meantime causing deflation.
Björn Segendorf, an adviser at Riksbank’s financial stability department, is dealing with the complaints of elderly, who are still uncomfortable with the new cashless society.
“[Cashless advances] have been beneficial, but as with every change there are certain groups who experience problems,” he said. “We see the supply of cash services being too small, and that is what we want to address.”
Segendorf seems to be administrating the last rites to a dying breed of cash cows, that will be extinct soon. Do we need to place them first on the list of endangered species?
By Jacob Gelt Dekker
Opinion columnist for Curaçao Chronicle