Catastrophe Challenges All Payment Methods

An article by David Birch has argued that cash should not be regarded as the catastrophe solution ¹. Cash is a solution, but only for very short time frames. What is needed is the means for person-to-person (or actually, device-to-device) payments that work in the absence of mobile networks, electricity and clearing systems. For example, a device with the necessary secure microchip, or a bank smart card, allows you to pay in shops, or send money to a friend. This is how the Chinese digital currency works.

The argument is that bank accounts remain because of the widespread infrastructure and back up data storage that exist. There may be a timing issue, but the value remains.

Where there are a range of payment options and where generators, battery systems and resilient infrastructure exists, outages can be short. In China’s 2022 floods, mobile base stations in drones kept payments moving, and satellite communications by Starlink and others have improved connectivity significantly.