Saturday, November 05, 2005

Must SA move to a cashless society?

It is that time of year. Cash van heists are a weekly occurence in South Africa around the Christmas season.

Last year there were 192 cash van heists, executed by well armed criminals with AK-47s and R5 rifles and military precision. There has been a 12% rise in the January to October period this year. More in this Mail & Guardian article, The season for stealing.

The police appear to have made strides against crime in South Africa. I say appear, because there is an embargo on the release of crime statistics. This is a debatable policy. As a citizen, I would like to know what is going on in my country and the success of the police who are after all public servants. However, South Africa has done a remarkable job of improving the positive attitude in the country and this was perhaps a prerequisite to the economic transformation we are experiencing, which will in turn create jobs, alleviate poverty and remove a reason for crime.

But as the police have made strides against hijacking and robbery, organised criminals have looked for other targets. The R130m that was stolen by gangs of armed robbers was, you'd have to say, easy money. 10 heavily armed men against three guards in a van are going to win most times.

Of course South Africa must address the reasons for crime and take the criminals out of society.

But in the meantime, let's get cash out of circulation. Enforcing this has never worked. Many cashless society projects have tried and failed throughout the world. However, society responds better to rewards and penalties in the form of discounts and pricing. These do exist in that retailers do not pass on the card transaction fees for credit and debit card transactions. But the cost of handling cash in South Africa is enormous. Retailers must pay huge amounts to transport cash and banks charge extra for taking cash deposits.

Make it obvious - offer non-cash discounts at the till-point. Let's get cash out of the system.

See We’re being robbed blind.


LiVEwiRe said...

Interestingly, I've thought about things going cashless. You seem to have better examples than what I could think of and it makes me think that it would be something to strive for. On the down side, anyone intent on stealing will find a way to do it.

ChittyChittyBangBang! said...

What you say makes a lot of sense and the benefits in moving to a cashless society are obviuos.
However, a helluva lot of education and understanding will be needed to convince the man in the street.
The poulation demographics and the low level of education are key ingredients as to why we are largely still a cash based society.
Ppl are skeptical of dealing with money electronically. They do not understand the concept of electronic banking and/or how it works. Even those who do are skeptical/scared, as is evident by how many So Africans are willing to buy online.
A vast majority of believe that if they cannot physically see or touch it, their money basically is not there. Credit/debit cards are foreign concepts to them.
Ask any bank where the majority of the rural customers still bank with the old bank book system.