David Wolman: "The End of Money: Counterfeiters, Preachers, Dreamers -- and the Coming Cashless Society"
Cash is on the way out. Americans carry it less and less often due in part to new technology and a growing desire for convenience. We now use cards, computers, and even mobile phones to pay for everything from our morning coffee to the parking meter. Critics of cash say it’s covered in germs and traces of drugs, it penalizes the poor, and it keeps criminals in business. But while the value of cash is coming under fire, many are reluctant to give it up. Some workers still rely on physical money for their income. And using cash rather than virtual money has been proven to keep us out of debt. Diane and her guest discuss the diminishing use of cash and how it's changing the way we do business.
contributing editor, Wired magazine
Last year, Google unveiled Google Wallet. It's an app that allows you to wave your phone at a retailer's terminal instead of using cash or a credit card. IBM had in 2012 financial transactions made via mobile phones that could total $250 billion. In a new book, journalist David Wolman argues why he believes cash is becoming extinct. It's titled "The End of Money."
Costs More To Make Money Than The Money Is Worth
It now costs about 2 and a half cents to make a penny and about 10 cents to make a nickel, according to Wolman. He recently wrote an essay for Wired magazine essentially saying, "So much of our lives is moving to the digital realm, music and movies and books. Why not cash?
Let's kill it already." The negative response he got was overwhelming.
From My Cold, Dead Hands
Wolman said some of the resistance he heard to completely digitizing money had to do with privacy concerns. But there were also a lot of people who read his article and responded by saying they understood and maybe even agreed with his argument on an intellectual level, but emotionally, they said they're more careful when spending cash. Diane pointed out that there are also many people who depend on cash tips for a significant part of their income.
Can't Get Rid Of Cash Without A Substitute
Currently, there's no entirely sufficient substitute for cash to replace it, and that's something we would need before seeing cash become extinct, Wolman said. But he still feels that "cash is getting pushed further and further to the edge," and he sees its eventual disappearance as a matter of when, not if.
"Pain In Spending"
Behavioral economists have long known that it is psychologically harder for people to part with cash than to put a charge on a credit card, Wolman said. In India, people use mobile phones very often for transactions. "They're not quite ahead of us, but people's excitement about using these tools over there is overwhelming in development experts and economists," he said. However, on a recent visit there, he realized he needed cash to do almost anything out of his hotel room - get a taxi, buy water on the streets, pay his translator, and pick up souvenirs.
You can read the full transcript here.