Everyone has a debit or credit card, and most of us are across internet banking. So why are people still so keen on cash? We examine the ties that bind.
A strong cultural and emotional connection to cash may be slowing the nation’s move to a cashless society. The bond many of us have with the notes and coins in our purses and wallets runs deeper than most would suspect, experts say.
After all, people in Australia keep coins on hand to feed parking meters, buy that morning coffee, drop in a charity tin, buy a soft drink from the vending machine and, of course, the tooth fairy wouldn’t be in business without $2 coins. We put notes in birthday cards and we use notes and coins to pay for goods at the odd cash-only business.
People in Australia have a strong emotional bond with cash that cannot be replaced quickly, corporate behaviourist Philip Owens says.
“Cash has a special place and meaning in the hearts of people,” Owens says. “The biggest emotional draw of cash is that has a physical form – it is a tangible item that a person can receive, hold and even lose. This creates a cognitive bias that endows cash with greater value than its electronic equivalents.”
This visceral connection between cash and pleasure is ingrained in popular culture
Perception of value
A study conducted in New Zealand by a marketing lecturer at the Auckland University of Technology, Jashim Khan, found when people use cash
there is a heightened awareness that something of value is being transferred. Using cash was also perceived as reflecting better money management and control of spending.
In analysing emotional responses to payment modes, Khan found “an expressed enjoyment when paying by cash in the context of ‘special’ purchases”. This enjoyment factor suggests an attachment difficult to break with contactless cards, let alone Bitcoin and cryptocurrencies.
In popular culture, dollar signs are often used to symbolise success and hedonism. Movies, television and popular music perpetuate this link – think of the “make it rain” scene in Martin Scorsese’s film, The Wolf of Wall Street; and Jesse Pinkman in the cult TV show Breaking Bad describing “fat stacks” of cash.
This visceral connection between cash and pleasure is ingrained in popular culture, Owens says. “Consider how money and wealth are represented in culture such as in books, movies and television,” he says. “People rolling in money, robbing banks, giving tips – all relate to the physical version of cash.”
People will still need a tangible symbol of currency to associate with the intangible transactions occurring in cyberspace
The trade of physical money has driven Australia’s economy for generations – from the holey dollar in the days of the early settlers and the pound note from 1910 right up to the introduction of decimal currency in 1966. But talk of the cashless society
is nothing new – arguments for the phasing out of cash has been around since the 1960s and 1970s when debit and credit cards became more widely used.
Today, using cashless technology is easier than ever and Australians are taking full advantage. But, even so, cash is likely to remain the symbolic version of money people consciously and unconsciously relate to, Owens says.
“New symbols will emerge in the digital age such as Bitcoin icons and credit card brands, all of which can carry meaning,” he says. “However, because these are essentially intangible, they will not be able to develop the same physical and endowment effects [that cash can]. People will still need a tangible symbol of currency to associate with the intangible transactions occurring in cyberspace.”
This all means that while the shift to an increasingly cashless society is clearly in train, financial institutions will need to think of new and innovative ways to replace the strong sense of attachment we feel when we have cash in our hands. The upcoming New Payments Platform (NPP) will go a long way to provide the necessary infrastructure to support payments innovation, and BPAY will be the first to take advantage of this platform by developing the Initial Convenience Service (ICS), the first Overlay Service on the NPP.
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
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