This week the European head of payments company Visa told the FT that the pandemic would lead to a “permanent” shift away from cash but as more technology companies move into the payments business, cash is a means for consumers to keep data on their spending to themselves.
Yet it would be a mistake to think cash will disappear altogether, or that it is an outdated technology. If anything, digital currencies are far older; the first money was probably an abstraction in ancient Mesopotamia that never left the clay tablets of temple and palace bureaucrats, just as today’s currencies circulate only on silicon chips. Physical currency, created later, offered the advantages of portability and, most importantly for today, privacy and anonymity. Cash is not only appealing to those who want to escape the eyes of the bureaucrats for underhand reasons — whether to sell drugs or to work cash-in-hand. As more technology companies move into the payments business, cash is a means for consumers to keep data on their spending to themselves.