Cashless Society?

It seemed so easy…One week after the 1st blog, how did I do in the “1 week without credit card”… I was doing quite well for the first…3 days and half then I succumbed I went back home and took my credit card and bought those “exceptional” items I really really needed (on second thought maybe not). That reminded me that I actually survive 2/3 weeks on a no credit card. Last year I went on holiday in Southeast Asia visited Thailand, Cambodia and Myanmar. While I was able to use cash and credit card in Thailand and Cambodia that was not the case in Myanmar (I don’t know now but at the time you were not able either to withdraw money at ATM (and even finding one) with a foreign card or pay with it in shops etc (and internet connection was so slow that made it impossible to buy things online). Before entering the country I had to think about the money I will need and bring them on me in cash. The result was that I had about 500$ on me to pay for hotel, food, transport, emergency etc….I remember that I thought carefully about every single expense and find more reasonable way to travel (by bus) etc… The result was that at the end of the 3 weeks I was left with about 200$. Of course life over there was much cheaper than here but still….. I would have spent it all if I knew I could use my credit card.

All of this made me think, are we going to toward a society that is going to give up money (cash) for payments? Are we going toward a cashless society? and if so, is it for good reasons or just a plan to make us spend always more. That was the question that came to my mind, apparently there are many research about the possibility of cashless society.

For some (The End of Money: Counterfeiters, Preachers, Techies, Dreamers – and the Coming Cashless Society David Wolman) it is imminent for other the possibility of cashless it still is very far (

As we can see every day we tend to replace money (cash) by other way of payment in most transaction and new ways that do not use money at all are flourishing (I guess it makes us feel more comfortable). One that caught my eye is:

Bitcoin is an innovative payment network and a new kind of money.”

It is not actually very clear to me how does it work in practise but there is no money involve. What surprises me is that what is argued by Dan Ariely a cashless society seems to be link to a raise in dishonesty: it’s easier to cut ethical corners involving money, while continuing to think of yourself as an honest person, when you’re psychologically distanced from the money involved. “We are moving to a situation which allows people to rationalise dishonesty to a much, much higher degree” (Dan Ariely). Do you think a cashless society is possible? And if so will it make us more dishonest people?

Pain of Paying

The other day I was on my way to the supermarket to buy food I stopped at a clothes shop, I could not resist to just “have a look”…of course I filled my trolley with lots of on sale things jeans, pulls, bag, shoes etc….I started queueing and when it was my turn to pay the 79£ ( that I was planning to pay by credit card)the cashier said to me: “I only accept cash, the machine is not working at the moment” (luckily) I had enough cash on me. I took the banknotes out of my wallet and as I was counting 10£, 20£, 50£…something happened..I was actually feeling a sort of pain, I was realizing the actual transaction of my money going out of my pocket to someone else. This strange sensation made me rethink about what I was about to buy ( do I really need those things?) so I started to leave behind some of the stuff I was going to buy and finally paid 32£.

I began to wonder why I was willing to pay 79£ on my credit card without thinking twice but when paying by cash (which meant no difference at all, but the physical act of giving something) made think that it was quite a lot of money for things that I didn’t really need.

So, was my consumer behaviour affected by the method of payment I used? I began to search for reasons underneath this behaviour and I came across to the Pain of paying (not having a psychology background it was quite a discovery from me).

The Pain of paying is basically the pain you feel when physically anticipates having to pay for something and you become more conscious about prices (how much you pay).



On the Monopoly Money: The Effect of Payment Coupling and Form on Spending Behaviour on Journal of Experimental Psychology: Applied Copyright 2008 by the American Psychological Association 2008, Vol. 14, No. 3, 213–225 argued that the Pain of paying was affected by timing and the method of paying by cash,, credit card, gift certificate etc..

I agree with the following quote:”Credit cards effectively anaesthetize the pain of paying,” said George Loewenstein, (Carnegie Mellon) when using cards the pain of paying is reduced compare to cash payments.

So, here is my resolution for next week leave my credit card at home and only use cash (setting a reasonable budget)…to be continued.