Beware the dangers of a cashless society

Sacrificing notes and coinage in the name of expediency would disempower us all

As the country celebrates tradition and prepares for change, one major shift is closer than ever – our move towards becoming a cashless society. It is hard to imagine money without the Queen’s profile proudly embossed, defining our Elizabethan generation in a centuries-old British tradition, but the monarch’s face is fast disappearing from our pockets.

Many of us rarely use cash now at all and, increasingly, shops, cafés and transport providers refuse to accept it. Card and contactless payments already outweigh cash payments in the UK. Our shift towards digital payments was further catalysed by Covid – even PIN pads were deemed risky, and life became, in all senses, contactless. But this also signalled an opportunity for the tech industry. Now Mastercard is urging people to link their bank accounts to their facial biometrics in order to “smile to pay”.

Creepy? Yes, but it all seems so convenient. Card companies give promises of “frictionless” transactions and “speeding” through checkouts. You don’t need to carry cash or worry about theft – and, increasingly, you don’t need to carry a card or even remember a PIN. Digital banking apps also allow you to monitor every penny you spend. But is it only monitoring what you spend?

The move towards a cashless society creates the inevitability of more granular surveillance than ever before. When everywhere you travel, everywhere you eat, everything you buy and every service you pay for is digitally recorded, your behaviour can be more easily scrutinised whether by your bank, your spouse or the state. Every penny of irregular income, whether a few quid from ebay or a family loan, will leave a digital trace.

In a system of total financial surveillance, fraud, financial crime, black markets and tax evasion could theoretically be eliminated. As such, HMRC has already drastically ramped up its digital surveillance operation. HMRC’S big data “Connect” system collects over a billion items of data from 30 sources – including tax returns, interest on bank accounts, online marketplaces and social media – to conduct a matching analysis of 800 million monthly credit and debit card payments. Yet as part of this, HMRC unlawfully collected over five million biometric voiceprints via its helpline – it was only after Big Brother Watch raised a complaint with the data watchdog that the Department was ordered to delete them.

The problem with cashless society is that it is a surveillance society. And not only can governments, banks and tech companies monitor what you have earned and spent in a cashless world, they can pre-emptively control it too. As Agustín Carstens of the Bank for International Settlements said at an IMF talk, a centralised digital currency gives the bank “absolute control over the rules and regulations of the use of that expression of central bank liability, and also we will have the technology to enforce that.”

We have already seen financial services companies take an interventionist approach to people’s spending. There are now numerous examples of cancel culture driving digital wallets to be frozen – an early notable example was Paypal freezing Wikileaks’ account in 2010. Just months ago, the Canadian government froze bank accounts of people associated with the truckers’ “Freedom Convoy”, in an effort to quell the campaign against mandatory vaccines. With digital currency, the question fast becomes not only who watches how you spend your money, nor even who controls how you spend it, but who actually owns it?

The increasingly extinct practice of carrying cash is one of the most disempowering side effects of our technological future, and exacerbates risk for those already vulnerable. Without being able to tuck away some cash income beyond prying eyes, it’s harder for people in oppressive situations like abusive households to plan an escape. Without cash in our pockets, rough sleepers and charities are being hit hard by the loss of casual empathy. People who are unbanked or refuse digital identities are cut out.

We need to consider the future financial world we are creating more deeply and be careful what we wish for. The British public has far more privacy, control and genuine ownership of our money using hard cash with the Queen’s face to pay than using our facial biometrics.