An economist at one of Europe's biggest banks tells us why there's 'no need' for a fully cashless society

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May 16, 2017 8:37 AM

'There are aspects of things that people prefer about cash,' Bright told Business Insider.

Ian Bright, a senior economist at ING

LONDON – Ian Bright, a senior economist with Dutch bank ING, believes that society will never end up being truly cashless because there will always be some form of utility in the usage of cash because people like using it.

Speaking to Business Insider, Bright said: "

Bright argued that numerous older and potentially outmoded technologies still exist in the modern world, despite apparently being surpassed my more modern alternatives.

"I use the example of shoelaces. There’s lot of other ways of doing up shoes. You can use velcro, have slip-ons, buckles etc. But shoelaces persist. If the technology works, why bother disturbing it.

Cashlessness is a polarising concept. Some within the financial world believe that a cashless society is close, while others, like Bright, don't see it ever happening.

Last year, for example, MasterCard's UK and Ireland boss Mark Barnett told Business Insider that

On the flipside of that argument, Deutsche Bank last year compiled a report arguing that

"It is debatable that a cashless society would mean less crime. For example, the ratio of damage caused by card fraud to the value of counterfeit notes in circulation is over 10 to 1," economist Heike Mai wrote.

Both sides have stats to back them up. On the cashless side for instance, electronic payments overtook cash payments by volume in 2014 in the UK for the first time, with Scandinavian countries and South Korea also making big steps toward cashlessness.

However, Bright points to a Bank of England report which showed that cash circulation is actually growing quicker than nominal GDP. "Despite these developments [the rise of mobile and card-based payments], cash continues to be important in the United Kingdom, with demand for Bank of England notes growing faster than nominal GDP," a 2015 BoE paper said.

"There is now the equivalent of around £1,000 in banknotes in circulation for each person in the United Kingdom."

Regardless of anti-cash arguments, Bright concluded, there is simply "no need" for us to ever reach a point of total cashlessness.

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