The Risks of the War on Cash

“Quick and easy is winning the war.”

By Don Quijones, Spain & Mexico, editor at WOLF STREET.

On January 1st, Londoners woke up to a rather perplexing reality: all of the cashless Oyster card readers on the city’s buses, rail and tube stations had stopped working. With cash as good as banished from the London transport system, attendants had little choice but to wave passengers through open ticket barriers and onto buses without paying, until the problem was fixed.

Serious Pause for Thought

Ironically, the costly glitch came on a day that new fare increases were to be introduced, with journey prices going up by an average of 1%. According to research by the UK Labour Party, rail fares have risen at three times the rate of wages since 2010, with campaigners saying ticket prices have become “increasingly divorced from reality.”

While for London’s commuters the glitch offered a welcome respite from ever-spiraling transport costs, the temporary collapse of the Osyter Card system should give serious pause for thought about our growing dependence on electronic cashless payment systems, especially as government, central banks, financial institutions, credit card companies, and large corporations conspire openly to pull the plug on cash [read: The War on Cash in 10 Spine-Chilling Quotes].

Just this week the UK Department of Transport announced plans it is developing with banks, credit card companies, and train groups to extend the London Underground’s cashless payment system across the entire UK rail network.

“We are in the early stages of exploring how passengers could pay for and store tickets on their contactless credit or debit cards as part of our wider aim to improve the experience of rail passengers and move towards smarter types of ticket,” said Jacqueline Starr, managing director of customer experience at the Rail Delivery Group, which represents Network Rail and train operators.

The move is part of plans to push Britain towards a cashless, paperless society in which people use cards or smartphones to pay for restaurant meals, check in at airports – and everything in between, reports The Daily Telegraph.

The Abdication of Cash as King

If recent trends are anything to go by, it appears to be working. In March 2015, the volume of transactions made via credit and debit cards and other cashless methods finally outstripped those made with cash. The number of cash transactions is expected to drop to just under 13 billion by 2023, while the number of cashless transactions – including checks, credit cards, debit cards, contactless cards, direct debits, and standing orders – will rise to over 27 billion.

In terms of value, cashless payment methods are winning hands down, since they are generally used for much bigger transactions. According to the UK Cards Association, credit cards and debit cards surpassed cash in terms of value more than a decade ago and now account for more than 75 % of retail sales. A Lloyds Bank survey recently revealed that a quarter of Brits think that in just five years’ time they will no longer need cash at all.

Simon Black, the chief executive of PPRO Group, a firm offering “end-to-end financial solutions enabling international electronic payment processes,” took the cashless meme to a whole new level by proclaiming that cash could be obsolete in the UK by 2020:

What’s for certain is that we are firmly set on course for a cashless Britain. We live in a culture of increasing convenience, which has influenced and will dramatically transform the way in which we’ll pay for items now and in the future…

“Quick and easy is winning the war,” he added.

When Convenience Trumps All

There’s good reason why a partial observer like Black chose to highlight the speed and convenience of cashless payments. After all, a cashless economy would have little more to offer normal, everyday people. The real beneficiaries would be government, big banks, card companies, and other financial intermediaries, like Simon Black’s PPRO.

And who’s to say that promoting payment systems that encourage consumers to seek instant gratification at every turn is a good thing, apart from for banks and credit card companies?

It’s probably no coincidence that as the use of cashless payment systems has exploded in the UK, so too has the amount of non-mortgage personal debt. According to the report from PwC, “Precious Plastic: How Britons Fell Back in Love With Borrowing,” people’s ability to remain in control of their debt will be challenged in years to come, especially if the Bank of England raises its base rate off its historic 0.5% low. The total household debt to income ratio, including mortgage debt, is projected to reach around 172% by 2020 – surpassing its previous peak in the run-up to the Financial Crisis.

There are plenty more potential downsides of a cashless society, as I warned in “Who Exactly is Trying to Kill Off Cash?”:

They include the complete loss of personal anonymity and control over your own finances; the very serious risk of identity fraud, especially when biometric measurements are introduced; the ease with which government authorities will be able to confiscate (and probably never return) our hard-earned money; the likelihood of new or increased fees as financial intermediaries proliferate; and perhaps most grievous of all, the danger that your government or financial institutions can cut you off altogether from the money you own and need to survive, just as happened with Wikileaks when it published the biggest leaks in journalistic history, in October 2010.

Then there’s the risk of system collapse – a major power grid failure, cyber-attack or EMP event. People and businesses would be cut off from the money they supposedly own and need to survive, at least until the system is restored. Worst of all, there would be no payment alternative to keep the economy ticking over in the interim. Such a nightmare scenario is hardly imaginable yet could be a very real danger in the new cashless era our governments, banks and central banks seem determined to usher in. By Don Quijones, Raging Bull-Shit.

Your Children “Will Not Know What Cash Is,” Apple CEO Tim Cook told students at Trinity College, Dublin, as Apple too is fighting the war on cash. Read… Who Exactly is Trying to Kill off Cash?

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  51 comments for “The Risks of the War on Cash

  1. Petunia says:

    I still buy my own groceries and pay with cash. The people that use a debit card take forever to finalize their transactions. There is nothing efficient about it if you are the one next on line. In America, the poor are given debit cards to pay for groceries and there have been outages of the system, which is run by JP Morgan Chase.

    Overall, when the west goes cashless, the third world currencies will rule. I’m betting on China becoming the reserve currency of the world.

    • Nicko says:

      China is a nondemocratic, authoritarian regime, they would want nothing more than to abolish cash to better track their citizen’s movements.

      • Petunia says:

        China would never abolish anything that gives them status in the rest of the world. Asians care too much about what people think about them.

        Also, what makes you think currency couldn’t be tracked around the world or from one transaction to the next. I know how it can be done.

    • Bruce K says:

      Going cashless is a natural evolution. Of course there could be negative things associated with it; but it’s going to happen regardless of paranoid thoughts as to why it’s happening. Neo-luddidic thought is just fearing change and sticking to the comfortable. If we had always been paranoid about technology, we wouldn’t be on the cusp of printing organs, exploring planets, or really furthering our continued existence as a whole in an attempt to get over an Great Filter that may be coming our way. I just hope we don’t lose enough steam through conservatism to make that leap.

      • robt says:

        The Luddites are actually at the other end of the political scale. Leftists have to be dragged kicking and screaming to the next level of innovation by the dreaded evil conservatives. If the Luddites had their way we’d still have buggy wheel and buggy whip factories … and of course, even further back to the focus of the original Luddites, the spinners holding the wool while the weavers slowly weaved. The other goal of today’s Luddites is to attack and eliminate every advance in public health gained in the last 200 years such as food preservatives, additives and preventative measures such as vaccination now that the living memory of all the afflictions that jeopardized health and lifespan are behind us by a few generations.
        Debit and credit cards are fine, and I use them for probably 75% of all transactions, but for those garage sale and small store transactions you still need cash, or some form of it. Maybe all those bags of junk silver will find their use in general circulation again.
        Possibly, the goal of the elimination of cash is similar to the casinos insisting on the use of chips – it isn’t money, and you spend more, and boosting the economy is all about getting people to spend. With cash elimination and automatic credit (i.e. debt) extension you could automatically get into debt more and sooner – fulfilling the wish of the banks to make everyone debt slaves as early as possible in life (as they have done with student loans, encumbering young adults who owe a third of their future income for an often useless ‘education’).

  2. Kreditanstalt says:

    Quite seriously, only a major, lasting, slow-grinding economic recession/depression can save us all now.

    We need to see bankrupt entities actually go openly and undeniably bankrupt; governments forced to engage in genuine ‘austerity’; and rising unemployment – especially amongst the hitherto-protected middle-management, technical/engineering and government employee classes.

    This obsession with “convenience” at any price is omnipresent in “developed” economies. Not just the UK. People need to understand that there really is no free lunch: that monetary fakery cannot generate rising living standards. In short, the public needs to learn to scrimp and save, to do without, to repair and re-use, to share. To forgo consumption today for investment for tomorrow.

    Ultimately, they need to be reminded of WHAT “money” is, HOW it is generated and why it is NOT some government-created abstraction which magically confers wealth…

    Bring on the recession!

    • Toddy says:


      I can not wait. Really, I can’t hack it no more with this helium infused economy.

      What makes cash so exciting is the anonymity of it. Hence the interest in things like cryptocurrencies.

      If cash does go away physically, I am certain it only does so at the benefit of a digital version of it. How else would the shadow economy of money launderers, weapon, drug and slave dealerships do business?

    • Nigelk says:

      We already have that, just for the bottom 60% of us only.

      Those of us under $50K/yr can’t afford the lobbyists to compete with the Oligarchy.

    • Carol says:

      You speak much truth, Kreditanstalt. It will be painful for most of us, but a much needed mental resetting.

    • d'Cynic says:

      Me, I pray with St. Augustine: “Lord give me chastity and continence, but not just yet.”
      Do you really know what you are asking for? The last time the financial system nearly imploded, the interest rates were reasonable for a reasonably short time, by today’s standards.
      Can you possible imagine what the economy looked like the last time barter trade ruled?
      Can you imagine the chaos when bank machines and credit cards would stop working?

      • robt says:

        One big solar flare would take care of the bank m/c and credit cards nicely. We barely missed one a couple of years ago.
        March 1989, Quebec Canada power outage gave us a small peek at the consequences. And August 1989 shut down the Toronto Stock Exchange.

    • MurdoMcSponge says:

      Spot on Kreditanstalt. You have hit the nail on the head!!!

  3. Jungle Jim says:

    I could not agree more. The thing that worries me is that it depends entirely on secure electronic communication connections. Anyone who is the least bit familiar with the Internet knows how insecure it is. John Barlow from the Open Source Group that largely wrote the programming for the Net has said quite openly that they intended that no government could ever control it. They may have succeeded, we don’t seem to be able to safeguard even our most sensitive data

    Our national enemies have developed advanced cyber war capabilities. This would be an engraved invitation to bring us to our knees. The worst part is that we might not even be able to prove who did it.

  4. Michael says:

    Cash will never be eliminated in the US. The drug trade is an all cash affair. The government likes cash because it can use the drug trade as a slush fund for its covert ops. The police love to seize drug cash for its own funding. A cashless society is the financiers wet dream. Its not going to happen here.

    • VegasBob says:

      In days past, when I worked in the DC area, the CIA in Langley, VA always paid for small purchases (the threshold used to be around $2,500) with nice crisp fresh new $100 bills. They like anonymity and unaccountability just as much as drug dealers.

      So I doubt the war on cash will succeed in the US.

      I always pay cash in stores and gas stations, except for large purchases like electronics or furniture. I really don’t want anybody nosing around my personal shopping habits.

      • Nicko says:

        With the latest biometrics and facial recognition scanners, they can track you, aggregate data with shared providers, and compile accurate reports of your movements and consumer habits…cash or no cash. ;)

  5. Paulo says:


    I think I will stop at the Credit Union tomorrow and pick up another $400. We’re getting down in the old hidden envelope trick. I have a high tree faller coming to to take down some dangerous trees at the end of the month. There is about 2 days work and I will pay him in cash, and the only receipt will be the mess to clean up. His work declaration is his own business as far as I’m concerned.

    Trudeau took 83 people with him to the Paris Climate summit, including an official photographer and a Govt. paid nanny. Speaking as a father who never had a child rearing freebie in my life, and who was a wage earner tax mule for almost 50 years, when they quit wasting my money I’ll quit dodging tax payments. Screw ’em.

    • Randy says:

      I think if you do some research it was 383 public servants and hangers-on!

    • PIGl says:

      It’s a preposterous conceit to that any government expenses of which you disapprove are a waste of your personal money. The Universe nor the planet nor even the nation revolve around you and your pocketbook. Canada has/had a major stake The Paris talks: of course a large contingent was sent on our behalf. Complaining about the nanny for the PMs children merely puts you in the company of the hysterical ill- nature whiners who very unconvincingly affected to find nannies horrifically more wasteful than hairdressers.

      And note that I, too, sabre-toothed commie that I am, strongly oppose a cashless society, for the very reasons articulated in this article.

      • Nicko says:

        Lets face it though, most people would go cashless and sacrifice their privacy for a discounted double-double at Timmies.

      • Corey says:

        Is this sarcasm or you actually believe this horses hire?

      • Robert says:

        It is equally preposterous to suggest that massive increases in national debt attendant to the sort of abuses mentioned have no effect on individual citizens’ lives: inflation and being forced into higher tax brackets with no increase in real income being two. Not that many years ago, a future President had to reassure the faithful that his wife did not have a mink coat- “I should say this— that Pat doesn’t have a mink coat. But she does have a respectable Republican cloth coat. And I always tell her that she’d look good in anything.”[Richard Nixon] These days, brain-addled Enquirer and People readers see nothing wrong with a Nancy Pelosi being squired around on Air Force jets.

      • Randy says:

        Paulo’s right! Politicians don’t abide by the rules they inflict on everyone else. They’re above the law, benefit personally from their positions of power and make decisions based on what benefits THEMSELVES not us. You, PIG, who are too blind to see this are definitely a USEFUL IDIOT to these people.

    • turlock says:

      With you bro….. cash and underground economy are the only REAL work and pay system keeping this foundering ship going

  6. Domenic says:

    I will never again underestimate the power of a desperate government. I used to think there was no way they could prolong the crash and continue the policies that have dragged financially responsible and irresponsible alike to the same fate.

    So to say that a cashless society will not happen is like me saying there is no way they can avoid the crash and continue to, now 2016. The consensus of a cashless society will first be introduced as a convenience and then it will be sold to the rest of us as a way to stop crime. You and I are being fearful of losing whatever we have left will concede to the new rules to keep what semblance of security we think we have.

    So if I sound like we have already lost, it is because I have lost any sort of faith I had left in the middle class. They have no idea of history and what money is. They have no idea how slavery is started and how it ends. I know it’s a dark way of thinking, however I have been looking for years now for some kind of good news and I don’t see it.

    • Randy says:

      Corrrect, the middle class is blind. That’s why we’re not coming back from this disaster. Buy 1000 half-pint bottles of vodka, they’ll be in big demand after the collapse. Lots of barter with that.

  7. Kreditanstalt says:

    Paulo, we serfs in socialist Canuckistan really do live like the Russians in Hedrick Smith’s book of the same name: you pretend to pay me and I pretend to pay you.

    The underground economy and routine disregarding of asinine government rules (which they hubristically term “laws”) is becoming a fact of life here. More and more people seem to (of necessity) increasingly be operating only minimally in the ‘wage-direct deposit-tax deducted-go to ATM’ economy. Why? Because we have little to no ‘disposable income’…

    The number of people with genuine non-government breadwinner-type jobs and paycheques, who are net tax payers and have disposable income, is declining.

    “People” are not getting poorer: the actual earn-pay tax-spend economy looks to be SHRINKING.

    Paying in cash is essential and I too keep wads of bills outside the banking system…I have no idea how any business which plays by the government rules can make any money.

    • rich says:

      Good post, Kreditanstalt. What’s true in Canada is true in the US. With 73% of US folks living paycheck to paycheck, there isn’t a lot of excess cash here either. Plus, we are already almost cashless. Just try to buy a house or a new car with cash and see how far you get.

      • Red Flag says:

        I bought my current car, a used one, from a dealer with cash and check. He was thrilled! Cash is accepted happily by all.

      • Genevieve Hawkins says:

        My parents bought their house old foreclosure in cash. Confusing when the US Embassy was asking for proof of their ownership f said house. I had to ask three real estate agents what a bill of sale in real estate terms was before I found one who knew what the paperwork was. But here I thought all the foreigners bought houses that way?

    • Nicko says:

      Read in G&M that household debt hit another record in Canada land at around 163%…the oncoming property crisis will be brutal.

  8. Ptb says:

    From a tax collection perspective, cashless has to be tempting. In reality, most transactions are digital nowadays. The retailer has less chance of “shrinkage” from the till both on purpose and by mistake. Theft and loss at a personal level is also minimized. So, the majority of law abiding consumers are already going very low cash. For all the reasons other posters have already stated, cash will probably always be available, but I think it will continue to play a dismissing roll.
    As many people are already so broke that what they use is actually credit anyway.

  9. Bruce Adlam says:

    Ĺook at Greece they are absolutely screwed by the EU they don’t have own currency to break away .England was smarter they keeped there currency and can break away should they need to . you give up cash you give up control of your own destiny and ultimately your freedom .human nature wants to control people at any price and that ultimately leads to slavery

    • Red Flag says:

      Greece has lost all its political will. They could have minted silver coins for domestic use. The party sold the people out, but the people let them.

  10. Gil Obrero says:

    U had one credit card in my life, many many years ago and realizing it was a waste of time I never renewed it. Simple reason I never needed credit.
    Now I have a system, works perfectly, any and all so called electronic payments I have friends who pay using debit or whatever and I give them cash.
    Cash I have lots of it and always a hand because there is no basis to keep any cash in a bank. Too risky for the return, and there is no convenience factor. None whatsoever. I have an account but the only cash that goes in goes out within the hour as a transfer to somewhere else almost always to an offshore account.

    i see this becoming more likely, if cashless is forced then more and more people will act as cashiers, taking cash and using cards on behalf of possibly hundreds of people.
    Quite simply they would become exactly the same as unregulated street money changers, instead of changing from dollar to yen they would change from dollar to electronic payment.
    And that would work so very very easily for online shopping such as Amazon

    • californiawoman says:

      Chase is limiting offshore transfers. Beginning of capital controls?

  11. Bobcat says:

    My wife recently discovered her credit card had a “block” on it. Her card was declined when she tried to pay for a meal. When she called her card issuer, their explanation was that she had made an excessive number of purchases the previous day, about 3 in an hour at a drug store and 2 grocery stores. They made no attempt to contact her to inform her of this blockage. Needless to say, she was irked.

    Cash doesn’t get “blocked”.

    • Wolf Richter says:

      ALL my cards got blocked when I went to Japan a few years ago. I found out when I was trying to buy a Shinkansen ticket for two from Tokyo to Osaka. It was quite a bit of money. I pulled out one card, and it didn’t go through. I pulled out another, and it didn’t go through. And so on. People were piling up behind me, thinking that I was a gaijin frauster, or something.

      Until then, I’d paid for everything in cash, which is normal in Japan (except the apartment, which I’d paid for by wire transfer). But this purchase exceeded my cash in fist.

      When I finally got the credit card company on line, they informed me that it was a fraud prevention feature … that when my card was used outside the normal range, they’d block it. They’d just forgotten to tell me about it in advance. Now I know to call in advance to tell them about upcoming trips. You never have this kind of hassle with cash.

      • robt says:

        I’m glad they blocked my card a few weeks ago, even though I never knew it from having a charge refused. Some clowns were billing thousands of dollars against it, probably after buying the info from hackers for 40 or 50 bucks.
        The bank sent me an email, to which, after checking on line, and finding that most commenters reported it as a scam, I declined to respond either by phone or return email because it sounded like one of those spoofing/phishing messages. Of course, my suspicions were further aroused by any comments that said it wasn’t a scam, because wouldn’t the scammers plant such messages? Major head trip for those of us ultra-suspicious types.
        Then the bank called me, for which I’m grateful, and all was fixed.

        • Wolf Richter says:

          Yes, robt, I too was glad when they sent me a new card with a new number after something or other on their side got hacked. And they blocked your card AFTER a debacle had happened. And sure, I’d be happy too.

          But they blocked my cards without telling me in order to prevent a POTENTIAL future debacle that THEY would have had to pay for…. and it left me stranded in Japan unable to buy a train ticket. Have you ever tried to use your US cellphone in Japan? Forget it (that was a few years ago, but not much has changed since). You find a phone booth in the middle of the night to make an international call to your credit card company and beg them to reopen your account…. I was furious.

          If you’re dependent on electronic payment systems (as I was in Japan at that moment), you surrender all control.

  12. Vernon Hamilton says:

    It is interesting to note that the bug/feature of a cashless future was the opening scene in Canadian author Margaret Atwood’s novel The Handmaid’s Tale, which was published in 1985.

    • polecat says:

      Well… at the rate things are going, we’re headed straight for “Oryx and Crake’!

  13. migel says:

    The precious metals are going to follow the same suit. Once cash is banned you will be unable to convert metals into electronic money and will be force to use it only for barter. This will drive the demand down with the price.

  14. polistra says:

    Not arguing with the main point, but there’s a ‘baseline’ problem. The article implies that the takeover of non-cash is recent. Not so.

    Even in the 1880s when gold and silver were legal and active, physical cash was only a small part of money movement. A book in that era listed: 95% of all money moved by check or money order, 4% by paper currency, and less than 1% by metal.

  15. OutLookingIn says:

    Cash tells no tails and leaves no trails.

    For that simple reason, “cash” will not disappear.
    If cash is regulated “obsolete” by governmental dictate, then that portion of the population which depends on it’s use, will just transfer the “cash” value designation of a transaction to another form.

  16. Chicken says:

    So if the system is down, we receive a banker-style free ride on the taxpayer dime? That’s the new definition for a level playing field?

  17. walter map says:

    Cashlessness will make it impossible to avoid participating in bank bail-ins. The coming bank bail-ins are inevitable.

    The bankster cartel has been engineering inflation and crashes, revolutions and wars to confiscate and consolidate the world’s wealth since the 19th century. Cashlessness will complete the process comprehensively and efficiently. People who have lost everything will not quarrel with their masters.

    This will all end in tears.

    Comfort? Comfort scorned of devils – this is truth the poet sings,
    That a sorrow’s crown of sorrows is remembering happier things.

  18. George French says:

    How 30million ‘wi-fi’ credit cards can be plundered by cyber identity thieves exploiting contactless payment technology

    You can get charged on your debit card and Oyster card together and thieves can scan your card with a reader in close quarters. It seems they lost the war. Never mind if the lights go out.

  19. Chris says:

    They’re hoping hackers don’t successfully launch a ‘war on cashless’. Then what’ll they do, say to heck with it and give everything away free?

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