Israel Goes Greener: Another Step Away From Cash
The middle eastern country of Israel has proposed a controversial new law which will effectively see the nation edge closer towards becoming what some have long predicted may soon be the world’s first completely cashless society. Under the new regulations cash payments from individuals will be limited to 50,000 ILS ($15,464) (the previous limit was 200,000) with businesses’ subjected to an even stricter limit of 6,000 ILS.
The Knesset assembly has argued that the move is necessary to help fight organised crime, tax evasion, and terror funding amongst in the Arab community but critics have pointed out that the move will also impact low wage workers and market traders who rely on cash. Of course, the biblically literate amongst are no doubt fully aware that The Book of Revelation prophesied a cashless marketplace in Jerusalem over 2,000 years ago so the move should not come as too big a surprise to anybody!
One of the benefits of this move is that cashless societies are greener societies. It may come as a surprise to many but cash is bad for the environment. The annual environmental costs of producing and transporting metallic coins and polymer banknotes are very considerable and of course, ATM’s guzzle up a serious amount of electrical wattage. Contactless cards represent an incremental improvement but are of course, made from plastic.
Whilst there is of course an environmental app associated with smartphone production and use, the fact is that people already have them and so loading one more piece of app software on them isn’t going to make much in the way of a direct environmental impact.
Aside from this bold piece of exceptional legislation though, there are plenty of other indicators that the world en masse is fast headed towards a cashless society.
Payment apps like Apple Pay have been around for a while although in reality, outside of hipster hubs like London, New York and London their acceptability has typically been somewhat limited. However, the COVID pandemic saw a rapid rise in the use of payment apps and they are now cropping up in corner stores and in taxi cabs.
This is not confined to the west either and India has seen the rapid rise of the Paytm app over the last 2 years with similar regional versions popping up in population centres all over Asia, Africa and South America.
CryptoCurrency and Blockchain technology was initially conceived as an internet only, non- centralised, non-physical currency which is increasingly entering mainstream usage. Whilst crypto currency is largely being traded like an asset more than used as currency, there are still a number of companies who will accept Bitcoin or Ethereum as payment.
Those who are concerned that a cashless society gives even more power to the retail banks and the central banks may take comfort that blockchain technology was purposely designed to resist any attempt of centralisation. However, the flip side is that crypto has become very popular with criminals so it would not be too surprising if the Israel government has it in its sights along with cash.
Bank Payment and Online Banking
Of course, bank payments and online banking have been firmly entrenched inside global economies for decades now. In the developed world, very few of us get paid our salaries in cash, and few of us pay rent, mortgages or bills in cash. In that sense the vast majority of the world economy has long been cashless, with cash usage largely reserved for low level, ‘pocket money’ type use.
However, even this is fast changing. Bank-like apps, such as Monzo and Revolut have made it easier than ever for peers to digitally transfer between one another. Previously, if I paid for a group meal on my bank card, my friends would give me their contributions in cash. But thanks to the plethora of apps now available I can simply send them a payment request via smartphone and get the money paid to muy bank or app wallet instantly and without fee.
What is particularly interesting is that online or app based banks like N26, Wise and Revolut can also offer multi currency accounts and even handle cashless international money transfers (cross currency) instantaneously. This means users can make peer to peer payments even when travelling outside of their home country and using a foreign currency. It is technological innovations such as these that mean the vision for a greener, cashless, (less private?) society may be realised sooner than any of us were ready for.