In the Digital Age, Swearing By Cold Hard Cash
Embrace the green hue evergreen? Some may consider cash as a relic of days gone by, but Rick Kahler, president of Kahler Financial Group in Rapid City, S.D., takes a different stance.
What's the deal with digital vs. cash? That's the lingering question, according to Larry Light. Some harbor the belief that the paper in your wallet is hopelessly outdated, but that's just an assumption some hold on to.
CrowdStrike's software glitch that wreaked havoc in July, causing disruptions worldwide, challenged this belief. Financial transactions became a struggle, air travel faced hiccups, stores closed, and traders halted operations for clients' accounts. In the midst of chaos, consumers flocked to cash. The London Times noted a 30% surge in ATM withdrawals in the UK. Link also reporteda significant spike in cash withdrawals.
Possible downside? In instances of major disruptions like the CrowdStrike incident, access to physical money could become tricky. Historical examples include Cyprus in 2013, Argentina in 2019, and Sri Lanka in 2022, all subject to limitations on cash withdrawals. The measures, while rocking the boat, left individuals grappling with financial constraints to meet daily expenses.
So, should we stock up on cash? Perhaps, as some consumers moved towards cash, trading their credit cards and checks for some transactions. Motivations differed, swaying between fiscal prudence and security concerns rather than technological fears.
But there's more to consider. Businesses are upping their game with credit card fees, which previously flew under the radar. Customers are now pausing to weigh payment options before swiping their cards or clicking "buy." Point-of-sale software incorporating suggested tipping amounts also adds to the debate. Consumers, feeling pressured or manipulated, are opting for cash to avoid the pressure at casuals establishments like coffee shops and salons.
Privacy concerns also keep the paper currency relevant. A client put it simply: "If I mail a birthday card with a $50 bill, and someone steals it, I've lost 50 bucks. If I mail a check for $50 and someone steals it, they have my bank account information and my address, so I could potentially lose a lot more."
Tech problems are another reason to keep a cushion. The CrowdStrike incident acted as a reminder that cash can save the day in the event of power outages, internet interruptions, or minor computer glitches. Local problems, no matter how small, can spell inconvenience with digital payments.
In the complex digital vs. cash debate, striking a balance seems like the most rational approach. Being completely cashless is unrealistic and cash-only will leave you stranded. A blend of digital and paper currency is more practical; keeping some physical checks on the side for emergencies. While a cashless society edges closer, the wise way to proceed is to maintain a balance that protects your financial information and provides the flexibility you need.
While argentina experienced limitations on cash withdrawals in 2019, some consumers in the midst of digital disruptions like the CrowdStrike incident in July 2022, turned to cash. This shift towards physical money was driven by both fiscal prudence and security concerns, as people became wary of digital payment systems. Similarly, in cyprus during a financial crisis in 2013, individuals faced challenges in accessing their cash, highlighting the potential vulnerabilities of relying solely on digital financial transactions.
