[Dave Birch] A correspondent writes

We had an earthquake. Yes, we have them every day and this one was not very bad as quakes go, but it starts the news folks doing the "are YOU ready for the Big One" stories, complete with lists of things you should have on hand should local services be unavailable after a quake. One thing to have, say the experts, is some cash because, the wisdom goes, electricity will likely be out for an extended time ( and in 1994, in many parts of LA, it was) and so ATM's and retail cash registers won't work.

This is a good point, isn't it? If there's no electricity, no mobile phones, no internet, then we'll need cash to get by? But if there's no cash, then how will we get by? I discussed this before with the case study of the Irish bank strike:

For several months, almost a year from start to finish, the Irish did it all with their own paper and no banks.

[From kashklash:: exchanging the future » Blog Archive » The Irish answer]

The case study notes that about four-fifths of the money supply disappeared because of the bank strikes, so the general public were left with the notes and coins in their pockets and nothing else. How did this society function? Since people could not go to the bank and draw out more money, they developed their own currency substitutes: some people began to use Sterling instead, but it was the cheque that stepped in to keep the economy going. People began to accept cheques from each other, and these cheques began to circulate.

In summary a highly personalised credit system without any definite time horizon for the eventual clearance of debits and credits substituted for the existing institutionalised banking system.

My conclusion: in "local" transactions, business can work perfectly well with no currency and no banks. But if there's no electricity, no mobiles, no internet and no banks for more than a few days, I'd suggest we have a lot more to worry about than a lack of a circulating medium of exchange.

But let's get back to the main issue. Nuclear war, Chinese cyberattacks on the power grid and zombie holocausts aside, is it possible to get by without old-fashioned paper and metal? Here's a challenge:

Have you ever tried to last a week without using cash?

[From When cash is king | Stuff.co.nz]

Actually, we had a chap giving a talk at last year's Digital Money Forum about going for more than a year without cash, so it's not that hard. I'm writing this in San Francisco, where I've been for the last five days, and I've still got the single $50 bill that I arrived with. I've paid with plastic in every single shop I've used — I even used it to pay a couple of dollars for an ice cream — and I got a Clipper card (the SF equivalent of London's Oyster card) so that I wouldn't have to use money on the Muni either. Last time I came to SF, I used money once, which was when the BART ticket machines wouldn't accept †he UK-issued prepaid card that I had with me so that I had †o go to an ATM to get cash. I used plastic at Starbucks and Borders, the diner and the 7-Eleven.

A particular factor in my cash-free time in SF was the arrival of Clipper, which meant that I no longer need dollar bills or quarters for riding Muni. It was better than an Oyster card in one way because as well as Muni and BART you can use it on CalTrain (which I did, whereas my Oyster card doesn't work on the train from Woking to Waterloo), but worse in another way because there aren't any load machines at the stations to you have to go to places like Walgreens to add money to it (or do it on line, naturally). Having a Clipper card reduced my use of cash to zero: even when the CalTrain ticket machines refused all of my UK-issued cards to pay for a ticket, I just went over to the ticket window (where the cards worked fine) and added money to my Clipper card instead.

Beyond San Francisco, more than once in the last year I've travelled †o countries for a few days and not even bothered getting currency at the airport. Have you ever tried to last a week without using cash? Frequently! And if it wasn't for my local Deutsche Bus that sells tickets the way the first omnibus service in England did (I hand over cash, they give me a paper ticket), then I could easily go for longer. In a developed country, it's not a problem, as the author notes. But she goes on to note a particular disadvantage that the lack of cash brings about.

This is the thing about not carrying money – it turns you into a skinflint. Scurrying past Big Issue sellers and cancer collection tins, head down.

[From When cash is king | Stuff.co.nz]

Well, that problem is sorted now.

Today Thursday 26th August, the chink of change was replaced by the tap of a card as passers-by used contactless technology to give money to the UK’s first ever cashless busker… Accepting contactless cards only, not cash, busker Peter Buffery entertained crowds on his specially designed guitar – fully equipped with contactless technology for listeners to make a donation to charity using cards provided by Barclays and Barclaycard.

[From Barclays Media Centre]

Of course this is a media stunt (and quite a good one). As we all know, it will be the mobile phone — not POS guitars — that spell the end for cash.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]


  1. Hi Dave,
    Using your UK card(s) is fine for all your payments, but how much are you paying in transaction fees? Your ice cream probably costs more in card and Forex fees than the value of the purchase itself!
    At least with cash from the ATM, I pay one transaction/forex fee and possibly another if I transfer the balance back to Sterling….

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