Keep your stash: Paper cash is here to stay
- January 18, 2016
- Soc sci dean and cultural anthropologist Bill Maurer explains in OC Register feature
UC Irvine cultural anthropologist Bill Maurer, whose research focuses on the relationship
between currency and technology, was part of a small group of academics asked by the
U.S. Treasury to offer input on the $10 bill redesign. Story courtesy of the OC Register.
While paying for that Starbucks latte on Apple Pay and using Venmo to split the restaurant bill with friends, you might be tempted to think paper money is becoming a thing of the past.
But smartphones aside, cash isn’t going away anytime soon, says currency expert Bill Maurer.
A cultural anthropologist whose research focuses on the relationship between currency and technology, Maurer was part of a small group of academics asked by the U.S. Treasury to offer input on the $10 bill redesign. Buzz has surrounded the new bill after news broke that it would feature a prominent female figure.
Maurer, UC Irvine’s dean of social sciences and director of the school’s Institute for Money, Technology and Financial Inclusion, had a lot to say on the topic when the group convened in August at the Smithsonian in Washington, D.C.
Though Maurer declined to say which historical figure he’d like to see on the new bill, he reports that Harriet Tubman, Sojourner Truth, Eleanor Roosevelt and Rosa Parks were suggested replacements for Alexander Hamilton. He also noted that the $10 bill is only the beginning of currency updates, as all bank notes – with the exception of the $1 bill – will undergo makeovers eventually.
But in the modern era of credit and debit cards, and with the rise of electronic payment apps like Apple Pay and Bitcoin, why the renewed focus on paper money, which some might say is becoming obsolete?
“The main, practical reason the Treasury is focusing on this now is because counterfeiting has become a larger problem,” Maurer says. “But beyond that, while studies show that the use of cash is declining, it is declining a lot more slowly than people predicted.”
According to a study by the Federal Reserve Bank of San Francisco, 40 percent of young people ages 18 to 24 prefer cash, especially when it comes to transactions of $50 or less. Reasons include avoiding fees associated with debit and credit cards and electronic forms of payment, as well as the fact that it “always works,” Maurer says.
“Credit and debit cards are tied to banks, and in the wake of the events of 2008, there are always security concerns when it comes to banks or worries about their hidden fees, whereas with cash that is never a problem,” he says.
One must also consider that roughly 28 percent of U.S. households conduct some or all of their financial transactions outside the mainstream banking system, according to Forbes. These “unbanked” or “underbanked” households may not have a checking and/or savings account or may rely on nonbank institutions for things like money orders or check-cashing services.
Many small businesses also prefer cash or even enforce “cash only” policies in order to avoid fees associated with debit and credit card transactions.
The big takeaway? Maurer says cash won’t disappear anytime soon.
“Cash is the only fully democratic way of payment,” he says. “Anybody can use cash and anybody can accept cash without it costing them anything. And right now there is no other form of payment like it that does not require a bank account.”
Besides being a societal equalizer, currency is an important educational tool, Maurer says.
“Cash is a good way to tell national stories because almost everyone has it,” Maurer says. “Its images remind ordinary people about the founding fathers and our nation’s history.”
He also cites cash as a tool for teaching children about money, mathematics and the economy.
“People have been predicting the end of cash since the 1950s,” Maurer says. “Though I think its use will continue to decline, I doubt it will disappear in our lifetime.”
Story courtesy of the OC Register.