by Mac Olsen
It was a very novel feature at the time – swiping my debit card in the debit machine at the register in Save-On-Foods in Victoria, BC in early 1993.
That was the very first time I didn’t have to pay cash or write a cheque for my groceries, and it seemed ideal. The money went right from my account to the company without any physical exchange of cash.
But now, we can pay our bills via Internet banking, make online purchases with our credit cards and debit cards, transfer money via email from one bank to another, and there are apps for our smartphones and tablets to handle banking and commerce transactions. We can get our payroll, GST credits and tax refunds sent right to our bank accounts as well – with no cheque having to be written, sent by mail or deposited.
This comes with a price, of course. Merchants have to pay a fee for each debit transaction they handle, and sometimes that fee is tacked on to the consumer’s purchase.
Also, the consumer may have only x-number of transactions as part of their monthly banking packages and if they go over the limit, then added fees apply. That’s happened to me more than once.
Given that our society – and even the world – are turning to electronic financial transfers for much of their day-to-day business, will we one day have no hard currency to deal with? As ideal as that may sound, I cannot see it happening.
For several years, there have been predictions that laptops, desktops and other computers would be replaced entirely by smartphones and tablets. However, that has not come to fruition, as the worldwide market for smartphones and tablets has leveled off and they are now part of a mix of electronic devices.
I see the same thing happening with financial transactions – physical cash or hard currency will always be required in certain circumstances.
A case in point is power outages. When you need food, fuel or other items and the power has gone out and it won’t be restored for hours or even days, the merchant’s debit machine won’t be accessible.
Yes, most merchants or government offices won’t open their doors, or they will close, until the power is restored. But some will be open regardless and they will only be able to handle cash or cheque transactions.
That happened to me during a power outage in the Smoky River region last summer. I needed fuel and I should have had cash available, but I didn’t.
Moreover, some merchants refuse to utilize debit machines, so either cash or a cheque is what you’ll require – especially if you’re nowhere near an ATM.
And keep in mind that financial institutions can suffer computer and network failures, which I’ve also encountered. Under those circumstances, they may only provide some money to you until they can fully restore their operations.
In essence, don’t write off cash as a form of business transaction. You don’t need to stuff your mattress with cash, but have some in hand for unexpected contingecies.
As the old saying goes, hope for best but plan for the worst.