Have you ever held a €500 note in your hands? Neither have I – nor indeed have most Germans. What never gets used, should really be declared unnecessary. And yet the proposal of the Social Democrat parliamentary group to do away with this premium note and restrict payments by cash is the subject of heated debates.
According to the maxim “nip it in the bud” many people fear that this will open the door for cash to be abolished completely. If you believe the joint head of the Deutsche Bank, John Cryan, this could be the case just 10 years from now – a controversial hypothesis which he presented at the World Economic Forum last week.
Ten years does indeed sound a little ambitious, but no one should be under any illusion: Cash is on its way out. Because quite independent of frenetic political regulating, there are currently many new technologies which will mean cash being completely marginalized one day – not in two years, not even in five, but certainly in 15 or 20 years. Contactless payment of small amounts, payment by mobile phone, private transfers via SMS – these have long been the rule in many countries.
It is a locomotive which is difficult to stop: In Denmark the government wants to partly lift the obligation to accept cash, because nearly everything is paid by card anyway. In China the mobile payment service Alipay already has 400 million users and in Africa millions of people without their own bank account use the mobile money transfer service M-Pesa. And Bitcoin heralds the arrival of a global, purely digital currency.