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The ongoing role of cash in an uncertain world

Wednesday, March 25, 2020

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Company: Glory Global Solutions

In the midst of our global battle with the coronavirus, there is much misinformation circulating – do this, don’t do that, etc – and a part of this includes misinformation about the risks associated with the handling and use of physical cash.   Moves to refuse cash payments have no basis in science and have the potential to bring chaos to what is already a fraught situation.  With that in mind it is important to clarify the science and a need for a continuance of free choice in the way we pay for goods and services.

At a time of great threat, we all need to work to deliver realistic solutions that work for everyone.  It's no good focusing solely on technologies that are not available to a large proportion of those most at risk.  The one thing that cannot be sacrificed is inclusiveness. WE ARE ALL IN THIS TOGETHER.

At the same time, we all need to avoid panic measures based on incomplete or inaccurate information. There is a need to distinguish between good hygiene practice and scaring people that it is unwise to make purchases in the manner most convenient to them.

In this context it is necessary to ensure people are given consistent advice that best protects them while enabling them to live as normal a life as possible.  This includes making necessary purchases without believing they are putting themselves at risk of infection. 

So when it comes to physical cash, what do the experts say and how is this being interpreted by the authorities?  Is the media providing us with facts, from primary sources of scientific information, or just offering opinion?  What do medical experts say and what is the correct interpretation of this information?

Why is this important?

To take just one example, The Corfu Medical Association recently produced a document that provided guidelines 'for those selling food'.  It addressed an important hygiene issue: reports indicated that many food sellers were wearing gloves but were handling both cash and food (while wearing the same gloves).  This is an important issue and one that Glory has addressed in working together with clients in the food industry (link to case studies).  However, what is of concern is that the document goes on to say that 'this constitutes a high risk for the spread of the (corona) virus'.

But on what evidence is this based?  It certainly isn't the view of the World Health Organisation.

It is here that we have to clarify exactly what the WHO has stated about transmission of the disease and to distinguish between the facts of their statements, and how this has in some instances been misinterpreted by certain media sources.  This is of particular concern because 'reported truth' rather than primary source facts, is informing decisions being taken by individual businesses and in some instances, governments.

When it comes to advice to consumers, we all need to encourage sensible behaviour and avoid inducing irrational fear.  There may be risk in any behaviour (including making payments by non-cash means) but there needs to be perspective.   In an MIT Technology Review article entitled 'No, corona virus is not a good argument for quitting cash', Marilyn Roberts, a microbiologist at the University of Washington School of Public Health says 'you're more likely to pick up Covid-19 from people exposure than from the type of payment'.

So what does the science say?

How is coronavirus spread and how can we best protect ourselves against it?  We need to distinguish between what is theoretically possible and what constitutes a direct threat. The evidence shows that the transfer of diseases from inanimate objects is a complex issue and is certainly not the main way this virus spreads.

The head of Germany's Robert Koch Institute for Infectious Diseases has said that 'virus transmission through bank notes has no particular significance. Rather, the main source of infection is in droplets from infected individuals'.

So how has this confusion arisen? Didn't it start with the WHO?  On 2 March, various UK media outlets, all repeating the same article, appeared to quote a WHO official suggesting that contactless payments should be used in lieu of physical cash, to reduce coronavirus risk.    As this “quote” spread around the world, the WHO quickly corrected the misunderstanding, in an article entitled 'WHO: We did NOT say cash was transmitting corona virus'.  The organisation has gone on record as saying it was 'misrepresented '. 'WHO did not say banknotes would transmit Covid-19 nor have we issued any warnings or statements about this' said Fadela Chaib.  'We were asked if we thought banknotes could transmit Covid-19 and we said you should wash your hands after handling money, especially if handling or eating food.  Doing so is good hygiene practice'.

So where does that leave us?  From the scientific evidence available we can only concur with the advice provided by the Reserve Bank of New Zealand:

'Cash is just one of the frequently touched surfaces we encounter.  The same is true for any other payment device, whether it's a card, phone or watch.  This reinforces the need for good hand hygiene, regardless of the way you pay or accept payment. '

Why is cash important and who uses it? 

The 2018 G4S Global Cash Report revealed that cash remains the most widely used payment instrument in the world on all continents and 75 percent of countries reported that cash was used in over 50 percent of transactions.

It also noted that 'for many people it is the only viable payment method. Businesses that stop using cash are excluding a material portion of the society and risk losing customers'.

According to the UK Access to Cash study banknotes and coins are a necessity for 8 million people.  (BBC 19 December 2018 Millions will suffer without cash).  Natalie Ceeney, author of the report noted that 'we need to safeguard the use of cash for those that need it', noting that half the people surveyed regarded cash as a 'necessity'.

When it comes to a move to cashless transactions, 'The population at risk in the UK includes the elderly, those living in rural areas, the homeless, charities and poor people who don't have access to financial services'.

Again, speaking earlier this month Ms Ceeney acknowledged the need for Government intervention to ensure a guaranteed future for cash.  She said 'Digital payments work well for many but not for everyone, and there is a serious risk that without legislation this shift will leave millions behind'.

These are the issues that underlie the argument for and against cashless.  Without underestimating its seriousness, this is one 'unique' occasion on which coronavirus can genuinely be termed a Red Herring.

The way forward 

Physical cash continues to play a key role in society.  At this particular moment in time, it is important to recognize that it is the only or most-important payment mechanism for many who fall into defined “at risk” populations.  We all have a responsibility to provide accurate information and to ensure that these people will be served, not discouraged, during this critical time.

Instead of the negative of refusing cash, let’s instead encourage behaviour that puts good hygiene at the forefront of how we behave towards one another.   Our citizens do not need more, unnecessary anxiety.  They need to know that they can pay for the goods and services they need, with the payment choices they have – including cash - and that they can continue to do so without exposing themselves to significant levels of risk.

The scientific evidence we have seen demonstrates no reason to refuse the custom of those choosing to pay using notes and coin.  For businesses everywhere the message should remain #CashAcceptedHere


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