Published on October 16th, 2018 | by Daniel Sherman Fernandez0
Cashless system will not work when there is no power
Imagine if disaster hits Malaysia and power supplies are cut. If you do not have cash on hand and rely totally on electronic payment, then you are in trouble. Think about it.
Recently Japan’s Hokkaido earthquake triggered a large-scale power outage, and Sapporo City instantly became the dark capital. During this period, 1.95 million residents flocked to supermarkets and convenience stores to buy life supplies. However, some of the victims who usually only use their mobile phones as their wallet lost their ability to pay and they could not buy what they needed.
On September 6th, a discussion on a Japanese tech forum showed an article about crazy electronic payment. “The Sapporo resident who only uses electronic payment is finished!”, the article said.
This is the scenario, “I usually used to use Apple Pay as I go out without a wallet, and bring along very little cash. In the early hours of the morning, after the strong earthquake, Sapporo suffered a large power outage. He checked the refrigerator in his home and found that only milk and mayonnaise remained. He rushed to the supermarket to buy necessary food and water. When he arrived at the supermarket, he found that he had no cash at all. He took his iPhone with only 62% of the battery and looked at the Apple Pay screen on his mobile phone. He felt uneasy. When his time came at the payment register the clerk told him that he could not use the electronic payment system as there was no way for them to record the transaction with no power. He could not use it anywhere else. At seven o’clock that night, he sat alone at home, hungry. Since the cash cannot be taken, the power has not recovered, and there is a feeling that everything has ended”.
In February of this year, the Swedish central bank governor Stefan Ingves warned. He said that the cashless society is unrestrained in the face of war or natural disasters, and the huge social and financial system will collapse in an instant. “Payment function” is one of the four functions that money needs to have. Cashless payment is just a supplement to the “payment function” because it can not be replaced by specific basic conditions (electricity, network, base station, etc.).
If the large-scale disaster occurs and there is a long-term disconnection or power outage, the encounter will be even more serious.