Apart from our local coffee shop, everywhere else I go take cards. Interestingly, Sweden seems to be the vanguard of moving to a cashless society. The Guardian reported back in 2016 that ‘According to central bank the Riksbank, cash transactions made up barely 2% of the value of all payments made in Sweden in 2015 – a figure they predicted dropping to 0.5% by 2020. In shops internationally, cash is now used for barely 20% of transactions, half the number five years ago.


Sweden leads the way to a cashless society

Sweden is now close to being cashless, and so is Norway. Researchers previously predicted March 2023 as the date at which accepting cash would no longer be profitable for merchants in the country. Swedish readers will know if that has happened.

Portugal outlawed any payments in cash over 3,000 Euros several years ago, the tax office won’t accept more than 500 Euros in cash. You may ask, is this for our benefit or the tax office who like to track all payments, or for the bank's benefit. I have little doubt that it’s for the bank's benefit, though the tax man approves.


Retailers in some countries now refuse cash

Mint Directors Conference (MDC) conducted research of 6,000 people in Europe and Australia and that confirmed that many retailers are refusing cash payments, which causes enormous problems for social groups who don’t qualify for cards, who don’t have a bank account or can’t afford or don’t know how to go cashless. Look around you in a local café and you will see people ‘of a certain age’ who in all probability only deal in cash, as they have all their lives.

Before you say, they will have to get used to it, accept that it’s just not that easy. Try not using cash for just seven days. Please leave a comment to say how you found the experience. Was it actually possible to pay everywhere without cash. That’s not good news for those who always pay cash.


Is it a good deal for the retailer?

The website Cash Essentials said this “Our research indicates small businesses believe they are being placed at a disadvantage by the move to cashless payments. In Australia, small businesses considered themselves as the losers in a potential cashless society which would ‘give more control to institutions and banks’ with a strong view that new technologies were very expensive for business in regards to merchant fees”.

Even worse, you should be aware that all your transactions are being tracked and analysed. What you spend, what you spend it on, where you spend. Even what time of day or days you shop. Guess what, all this data is apparently sold on to data mining organisations who make it available to interested companies. Your identity is not revealed, nor is your bank account, but your spending habits are of great interest to retail companies especially. There is a simple rule, if it's electronic, it's trackable.

Money has been part of human history for at least the past 5,000 years in some form or another. 1966 seems to be the year card payments started, but they got off to a slow start. The introduction of contactless payment started in 2008. In less than twenty years we have changed 5,000 years of cash payment. The last five years has seen a rapid explosion of contactless payment in even small shops and stores such as the coffee shop.


Banks are phasing out personal service

The majority of all these changes are to the benefit of the banks. They want everything to be automated and they are reducing personal service as fast as they can. A colleague related to me that she went to a branch of Santander to deposit. The multi-bank machine was broken down so she went to one of the five assistants. Sorry, we don’t accept deposits over the counter anymore, you have to use the machine. But the machine is broken. You will have to come back later she was told. Many clients needing to deposit, that resulted in many very unhappy clients. The staff had actually been instructed by the management not to accept deposits, whatever the circumstances.

If you have a Vale Corriero (a post office cheque) the multibank machine won’t accept it. Nor will many banks’ staff. You are told you will have to go to the post office to cash the cheque and then deposit the cash in the machine. Can it get any worse, probably yes.

The banks want to reduce staff, close or limit the opening times of branches and force you to do everything online or at the multi-bank machine. Of course, they will charge you a monthly ‘service fee’ (what service?) to ‘look after’ your money. If you want your money to be earning some interest, good luck. If you can get 1% you are doing well. If you want to borrow money, use your credit card or take out a mortgage, the interest could be as much as 30%.

Cheques have virtually disappeared from everyday use. When did you last pay by cheque? Cheques had to be processed by hand so that was another department that could be closed down.

The Encyclopaedia Britannica classifies banking as a ‘service industry’. Who are they kidding? Unless you are a major company or a wealthy individual, there is no personal service for you.

The old expression is ‘laughing all the way to the bank’. I seriously doubt anyone is heading to the bank this morning with laughter. Anything but!

Author

Resident in Portugal for 50 years, publishing and writing about Portugal since 1977. Privileged to have seen, firsthand, Portugal progress from a dictatorship (1974) into a stable democracy. 

Paul Luckman