Tom Spencer, chief organiser of the London Neoliberals, says YES
A move to a cashless economy has long been met with fear due to the small impracticalities it will have on few people. But we should be embracing this change because it will bring about significant economic benefit.
This is because the problem of the zero lower bound has been haunting most major economies since the 1990s. This is the point at which a country cannot reduce interest rates in a way that will have a significant impact on expenditure. Whilst we have created ways to avoid this, such as helicopter money and quantitative easing, there is still a point where we reach a liquidity trap. At this point a central bank is powerless to prevent the impacts of a recession – as a consequence we would see higher inflation, unemployment and lower growth.
Moving to a cashless society will help reduce that point. Under the current system if a bank adopts negative interest rates then people can simply withdraw their money and hoard it under their beds. On the other hand, under a cashless system, depositors would have to pay to keep their money in the bank if negative interest rates were adopted. This would help to incentivise more spending, speeding up any future recoveries.
Ariana Wolde, Contributor to Young Voices UK, says NO
The pandemic has sped up the decline of cash, but there are still many who aren’t ready to make the switch. 13.7 million people opted to live a mostly cashless life last year – nearly double the 7.4 million figure in 2019, according to UK Finance.
But going cashless freezes out the most vulnerable, those with lower incomes who can’t afford to tap away freely and need to keep a close eye on how much they have to get through the week. 1.7 million people in the UK don’t even have a bank account. Then there are older people unable to keep up with technology, those living in rural communities with poor broadband.
Putting a £10 note across the counter is also a lot less hassle for those with certain disabilities or dexterity issues than fumbling around trying to press the right buttons on a smartphone or using a card reader.
Businesses who pride themselves on a sense of social responsibility should think twice about excluding these groups. Having the choice is great, and has the potential to make businesses much more efficient, but it can’t come at the cost of millions of the most vulnerable.