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The Color of Money

We may be giving up our cash and paying with cellphones

David Wolman can envision a time when we won’t need to use cash. In his cashless society, people can text money. But I’m not buying it. Didn’t we learn something from the recession, when an over-reliance on all things not cash nearly took down our economy?

Nonetheless, I was intrigued by the world he advocates in his book “The End of Money: Counterfeiters, Preachers, Techies, Dreamers - And the Coming Cashless Society’’ (Da Capo Press, $25).

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I’ve selected “The End of Money’’ for this month’s Color of Money Book Club - not because I agree with Wolman but because he presents a fascinating and engaging thesis.

Wolman, a contributing editor at Wired magazine, writes: “Although predictions about the end of cash are as old as credit cards, a number of developments are ganging up on paper and metal money like never before: mistrust of national currencies, novel payment tools, anxiety about government debt, the triumph of mobile phones, the rise of virtual and alternative currencies, environmental concerns, and a wave of evidence showing that physical money is the most harmful to the billions of people who have so little of it.’’

From the start, Wolman knows it’s going to be tough to get people to part with their cash.

Wolman describes meeting electronics experts in Japan who are developing biometric technology to make our already easy plastic payments even easier. “One of these technologies uses the unique three-dimensional pattern of veins within every person’s fingertip. Touch your finger to a register, vending machine, or subway turnstile and you can instantly settle up without having to break your stride,’’ he says.

Yet, the technophobe that I am, I see so many negatives. I have faith in my cash. I see the value in using it over electronic means such as credit and debit cards. Studies show that using plastic influences people to overspend.

I don’t trust that the minds behind electronic money will not manipulate people into spending more than they can afford. With cash, you have limits.

Wolman shares my concern about credit and how it can be a catalyst for personal debt. But don’t use the problems with plastic to dismiss the argument that we should get rid of cash, he says.

The most compelling argument for getting rid of cash comes when Wolman talks about the poor, whose lives are financially marginalized because they don’t have easy and affordable access to basic banking services. He visits Kenya and India to look at ways some are helping the poor transact without cash by using cellphones.

Wolman is probably right that someday we will transition to electronic currency. I’m still not ready to embrace his futuristic digital world, but he did come closer to persuading me that we are coming to an end of money.

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