Tuesday, August 2, 2016

Why Is Cash Disappearing, Just When We Need It Most?

Did you know: Cash Cats is a thing?

I know things are crashing down all around us, but do you have a few minutes to listen to me talk about cash? Specifically, why is cash disappearing now, just when we need it most?

Cash offers so many huge and unappreciated benefits. For one thing, it is mostly untracked. In the surveillance state and the surveillance economy, everything you do is being watched. The government is watching. Corporations are watching. Retailers are watching. Don't you find it a little creepy being followed around the internet by targeted advertising?

I recently recommitted to using cash on a regular basis, and I found that some retailers go out of their way to make this payment method painful. I wanted to buy a simple Wüstof at Williams-Sonoma, and when I said I'd pay with cash and refrained from giving my email address, the salesclerk said, in a threatening tone, "Really? I have to warn you, you're going to get a huge receipt, it's a big pain. Is that going to be OK for you?" Luckily I carry a backpack, so the "huge receipt" was not a problem.

I know cash is now going to be trackable and whatever, but still. For now, if you're a regular person using it to buy stuff, you're basically flying under the radar.

Another benefit of cash is that it is harder to spend than other, more up-to-date forms of money. It is a bit obscure to me why this should be true, since cash is a symbol of something and not, itself, the thing. And yet cash is harder to spend. In one study, MBA students were willing to pay twice as much for something if they paid by credit card than if they had to pay with cash.

This certainly resonates with my experience. If I'm thinking about buying some sort-of-optional thing, like a piece of clothing or a new backpack or whatever, I find my feelings shift noticeably if I think about paying in cash than paying by card. There's something about handing over a wad of twenties that just hurts in a way that paying by card doesn't. In fact, I'd say that paying by card can feel downright pleasant -- and this aesthetic aspect is surely something people are thinking about when they design systems like ApplePay.

I recommitted to using cash for several reasons. I fear that if people don't use cash, cash will disappear, and I don't want that to happen. I want to incentivize the ongoing existence of cash. I use it to keep track of how much I am spending over time. I occasionally take taxi cabs in cities where drivers really really prefer cash.

But my cash quest is a lonely one. People seem to prefer cards so deeply and by such a wide margin that using cash is almost unthinkable. On campus, students use cards even to buy a cup of coffee -- they even use bank cards, where you have to wait and type in a PIN, and wait again! Aren't young people supposed to  be the impatient ones?

Even though this article in the New York Times showcases research showing that because is harder to pay cash for things you end up liking them more, the researcher seems to treat the idea of cash as almost unthinkable: "I’m not saying we should revert back to cash," she says, adding that maybe there could be a buzzing noise or email associated with a transaction that would bring back the pain of paying by cash.

As with fake noises for electric cars, this makes me think how odd it is that our new frictionless systems have to build the friction back in somehow.

I live in Canada, where the cash system is working pretty well. Theres' a sensible distribution of coins and paper, no pennies, and fresh bills. I'm from the US, and whenever I come back to the US for a visit, I'm appalled by the cash situation, and especially by the ongoing inclusion of pennies in a cash transaction -- which is the main thing making carrying cash, paying with exact change, and receiving change all a huge pain in the ass.

This has gotten to the point where I have started considering the possibility that the powers-that-be are intentionally letting the US cash situation get annoying. How else to march everyone off to the promised land, where we all pay by app, there's no shady markets, there's no coins to give to people on the street, and there's 100 percent tracking and 100 percent surveillance?

Anyway, it's interesting to me to think about why modern consumers find the idea of cash so unthinkable. Is it just that carrying around some paper and metal is now an unbearable convenience? Is it self-surveillance, life-hacking style? Is it that the "pain" of paying cash is too painful, given all the other painful things going on? Is it something to do with wanting "payment" to feel like the fun of a video game?

Is it all of these things?

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