Back in October, when no one (other than epidemiologists) was worrying about a global pandemic and chains of transmission of disease, the Danish coffee chain Joe & the Juice was defending its cashless policy as follows:
“We are sorry to hear that you have become concerned with our Cashless Policy.
In JOE & THE JUICE the safety of our juicers and the food safety of our customers are of highest importance. The reasoning for removing cash from our stores is to protect our staff against robbery and the like, and to increase the food safety in our stores by minimizing the risk of transmission of diseases.
We do understand that this may seem inconvenient for some guests, but we strongly believe that the safety of our juicers and the highest possible food safety overall increases our juicers enjoyment of their workplace and the overall customer experience.”
That was on Tripadvisor, in response to a customer’s comment criticising the chain’s “no cash” policy. The customer had noted the implications for tourists – “you will be racking up those charges on your card” – but Joe & the Juice explained it was safer that way for all sorts of reasons including “minimizing the risk of transmission of diseases”.
Ten months on, the chain can legitimately be seen as somewhat prescient although some of its employees also apparently offer, other less public-spirited reasons for the cashless policy. (Click here for an anecdote about Joe & the Juice in Palo Alto, where cashlessness was supposedly meant to deter homeless people from buying a drink and staying “all day”.)
Whatever Joe & the Juice’s reasons to stay strictly cashless, the coronavirus pandemic has made the policy increasingly popular.
Many people and stores now have a jolly good reason to limit transactions to contactless card payments. Coins and banknotes have become suspect ever since it was reported the virus could be transmitted through handling them. This belief has persisted despite it being disputed by the World Health Organisation (WHO). At least one infectious disease expert has wryly noted that cash is not a vector of disease “unless someone is using a banknote to sneeze in”.
Even so, within weeks of the WHO declaring a global pandemic, cash usage in the UK, for instance, fell by more than 60 per cent. The trend has been replicated in many advanced economies. Howard Davies, the first chairman of the UK’s Financial Services Authority and current chair of the Royal Bank of Scotland, recently noted the impending “demise of the paper krona” in Sweden, with the mobile payment system dominating small transactions.
That said, Mr Davies has cautioned against rushing to conclude that physical currency is doomed. He points out that while the number of cash transactions has been falling, “the volume of cash in circulation has in fact continued to rise in many countries. Since the end of last year, according to the BIS, the value of currency in circulation has increased by 8% in Italy, and 7% in the US”.
Add to that the muted political backlash against cashlessness in Canada, the UK, Sweden and parts of the US such as New York City, San Francisco, and the state of New Jersey and it’s obvious that coins and banknotes will still be around as part of a mixed-economy payment system that also features card and digital transfers.