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'The Cashless Society is a Con -- and Big Finance is Behind It' (theguardian.com)
An anonymous reader quotes this opinion piece by former derivatives broker Brett Scott:
Banks are closing ATMs and branches in an attempt to 'nudge' users towards digital services -- and it's all for their own benefit... I recently got a letter from my bank telling me that they are shutting down local branches because "customers are turning to digital", and they are thus "responding to changing customer preferences". I am one of the customers they are referring to, but I never asked them to shut down the branches... I am much more likely to "choose" a digital option if the banks deliberately make it harder for me to choose a non-digital option. In behavioural economics this is referred to as "nudging". If a powerful institution wants to make people choose a certain thing, the best strategy is to make it difficult to choose the alternative...
Digital systems may be "convenient", but they often come with central points of failure. Cash, on the other hand, does not crash. It does not rely on external data centres, and is not subject to remote control or remote monitoring. The cash system allows for an unmonitored "off the grid" space. This is also the reason why financial institutions and financial technology companies want to get rid of it. Cash transactions are outside the net that such institutions cast to harvest fees and data.
A cashless society brings dangers. People without bank accounts will find themselves further marginalised, disenfranchised from the cash infrastructure that previously supported them. There are also poorly understood psychological implications about cash encouraging self-control while paying by card or a mobile phone can encourage spending. And a cashless society has major surveillance implications.
While a cashless society might make it cheaper to run a bank, "A cashless society is not in your interest..." argues the author.
"We must recognise every cash machine that is shut down as another step in financial institutions' campaign to nudge you into their digital enclosures."
Digital systems may be "convenient", but they often come with central points of failure. Cash, on the other hand, does not crash. It does not rely on external data centres, and is not subject to remote control or remote monitoring. The cash system allows for an unmonitored "off the grid" space. This is also the reason why financial institutions and financial technology companies want to get rid of it. Cash transactions are outside the net that such institutions cast to harvest fees and data.
A cashless society brings dangers. People without bank accounts will find themselves further marginalised, disenfranchised from the cash infrastructure that previously supported them. There are also poorly understood psychological implications about cash encouraging self-control while paying by card or a mobile phone can encourage spending. And a cashless society has major surveillance implications.
While a cashless society might make it cheaper to run a bank, "A cashless society is not in your interest..." argues the author.
"We must recognise every cash machine that is shut down as another step in financial institutions' campaign to nudge you into their digital enclosures."
It's not only banks/financial institutions, but also governments that like cashless societies, because it gives them better surveillance and more control.
The good thing is: they'll likely overplay their hand and lose control: if governments get rid of cash, people will find alternative payment means completely outside the control of banks and governments. Bitcoin didn't quite get it right technically, but systems like that will catch on.
It's not because technology allows it that it must be the preferred option (electronic voting is a poster child of the idea). I don't mind if my neighbor prefers being tracked with his credit card and iPay and Air Miles, but at this point, global customer insouciance seems to pave the road to forced global surveillance in every aspect of our lives; we don't need this crap, wake up people, thank you very much.
If they're so insistent on taking cash away, take it one step further in the opposite direction and remember, in your neighborhood, you are surrounded by a ton of people with a ton of valuable skill sets. Barter where you can and cut both the bank and the government out of the equation entirely. I just traded some of my IT time and knowledge for a neighbors expertise in electrical and plumbing. We both came out ahead all the happier, with no bills, taxes, invoices etc. to tally up once the taxman arrives. Not every interaction has to revolve around money, and I managed to make a couple good friends as an added bonus.
Banks hate cash. It requires physical handling. It can be stolen. It wears out. It "isn't working for us" as it sits in a vault, an ATM, or an armored car. Electronic money can be working all the time - earning interest, being leveraged, being arbitraged, whatever. Cash is so "static" compared to electronic funds.
The Brave New World is almost here. Add an implant and the process will be complete. Can you imagine being arrested on suspicion of a serious crime because 30 minutes prior to the crime, in the "walking distance" proximity, you bought a pack of gum with your implant (or your debit card, or your smartphone)?
I'm rather old, my friends, and as you revel in your youth (assuming you are there), marvel at how anyone could be happy to be older. This world is yours. I'll be in it for a little longer, but not nearly as long as so many of you. I suppose cashless is your future - not so much mine.
I love cash, but electronic money is more convenient, more versatile and great.
Just ask a non-bancarized guy in Kenya or Tanzania using M-Pesa about it... And trust me when I tell you that Safaricom and Vodafone did not implement this from the goodness of their hears, but for pure profit, and yet, it ended up raising the living standards of the people at large, and specialy of those non-bancarized.
Sources:
The economist Sept 26-oct 2, 2009
And IEEE Spectrum here:
https://spectrum.ieee.org/stat...
Yes, if we look at electronic money and a cashless society from the optic of a westener who has enough diposable income to aford a computer and knows what this "internet" thing is, is all doom and gloom.
But once we try to get ourselves in the whorn -out shoes of less fortunate people that make less than $1 a day (and for me, being in Venezuela, this is easier, as is not a tought experiemnt, but a reality I see everyday) we see that electronic money can be beneficial for everyone, warts and all...
So, I for one, welcome our e-money overlords... Yes, I wish there would still be cash, but... whatever benefits the many is ok by me...
*** Suerte a todos y Feliz dia!
By design 'late payment' is never an issue on debit cards.
"The likes of Facebook and WhatsApp are free to those whose privacy is of zero value."
I currently live in Hong Kong and find that cash can largely be replaced with two notable exceptions. /mastercard/apple pay cash quick payments in many shops as well.
Most popular is the use of the octopus card - it is the public transport card that many, so very many shops accept as well. And then there is visa
Frankly, I love that.
The exceptions: infuriatingly (not just me thinks that), local taxis demand cash. Also the smallest street stalls or wet market stalls are cash only.
I think they (banks, Visa, etc.) Want to skim every transaction.
That is true in America, but not everywhere. In China, WeChat and AliPay have zero transaction costs for either buyer or seller. The value of the data collected is enough, and competition keeps them from charging fees.
Look forward a few years, and the situation could easily be reversed. You know those cameras that are pointing at every cash register in your average store? Soon (if not already) they'll be high-res enough to read the serial numbers on every dollar bill you hand over or flash in your wallet/money roll. Just like automated facial recognition, this'll be done automatically; suddenly, cash can be followed from one transaction to another, and connected to people thanks to said facial recognition. Expect the ATM to record serials, and the cameras at your bank. This'll be done in the name of 'tracking money stolen in robberies' but will be used for other purposes. Expect a 'serial number blacklist' that causes a flag to be raised if you use flagged cash, too many flags and the cops are shown the tapes or the facial recognition blacklists you. You also get blacklisted if the facial recognition determines you're a known retail thief/robber. Expect Walmart greeters to be notified not to allow someone in because the facial recognition recognized someone who was blacklisted. With facial recognition, your cash purchases can still be correlated into a profile and shared/sold, like supposedly happens with credit cards.
Now look at open-source end-to-end encrypted communication software like Signal. And the cryptocurrencies that happen to be defacto decentralized. One can easily imagine (in the unlikely event it doesn't already exist) a situation where digital exchanges of currency are anonymous, unblacklistable, and decentralized. Also, since it's decentralized you don't have to worry about a single point of failure... failing. As opposed to a computerized cash register that crashes and is unable to accept cash, and the employees are forbidden from selling items not sold through the register.
I've seen people who are reticent to break a large bill because once they break it, they'll spend it because they treat small bills as worthless. Others treat cash as 'free money' that they blow whereas numbers in an account are 'important money' that they don't touch. If these people went full cash, they wouldn't save enough to pay their bills. Also, is your annoying relative or whatever hitting you up for money regularly? "Sorry, no cash on me", problem solved. If you always carry cash on you then it's an ongoing problem. Credit cards often have points or other rewards/cash back programs, with cash you get nothing like that.
Institutions want to get rid of cash because handling cash is difficult to automate, and cash has higher marginal cost to guard, particularly from the handlers. Cash also tends to get stolen, despite all the money spent on guarding it. It also gets counterfeited, lost, destroyed, and requires quite a lot of money to produce (for the treasury). Forget ATMs, if society goes cashless, banks can get rid of many of their branches. Loan applications can be done via Skype video calls or whatever. Kill checks and money orders and branches wouldn't really be needed for much.
Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
I have seen the banks closing up shop in Europe and the Middle East and making it hard for the general public, with the result that 'Exchange Services' are popping up everywhere, doing exactly what the bank branches used to do. So, it will backfire in the US, same as in the rest of the world.
I recently pulled up to a drive through of a nationwide bank chain to find that it had closed just a week before; I had to go into the lobby and stand in line.
While in line, a "personal banker" approached and asked if she could help me with anything. I commented about having to get out of my car and walk across the parking lot to come inside while it was raining.She explained that the bank was removing DT tellers at most locations, because so many people use digital payments.with their phones, so no one was using the DTs anymore.
I explained that I know just how secure phones are, and that I would never trust financial stuff to a device that is so easily stolen. "If they get your phone, they can get just about anything else."
She assured me that that was not true, and even if it were, I would only have to use their APP to track what was going on, and to report the bogus transactions.
"You mean the APP on my stolen phone, where your website sends the confirmation text for your two-factor authentication?"
She didn't appreciate the irony...
In Sweden it's hard to find shops that don't take cards or other means of electronic payments like Swish. And a growing number of shops are cashless, often restaurants.
Even taxis, parkings, road tolls and similar services normally takes electronic payments.
It can go months between each time I use cash these days.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
So, we should go back to gold coins?
Do remember that once upon a time (less than a century ago), paper money wasn't considered "cash". Paper money was "banknotes", and the only real "cash" was gold and silver coins.
Yeah, I'm sure that everyone will be really happy to haul one hundred pounds (45 kg) of gold to the dealer to buy a car. Or five hundred pounds (225 kg) of gold to buy a house....
The only way you're going to get back to even your limited understanding of cash is if you stop using banks (no credit cards, no checks, no savings) and keep big piles of banknotes (yes, the Federal Reserve is a bank, technically) in your house. That'll go over real well right up till the time someone breaks in and steals your big pile of banknotes, and you suddenly have no way to buy food till payday....
"I do not agree with what you say, but I will defend to the death your right to say it"
It doesn't take being bad with money to get hit by insufficent funds fees. If you're poor, you don't have cushion. If anything goes wrong (fraud transaction, runup phone bill, spouse makes purchase same day) and you get overdrafted. Then the bank sees you bought a sticke of gum earlier that day and decides to order transactions high to low so you get hit by another overdraft fee.
This problem is easily solvable; banks don't want to because it's the only way they can make good money on low banances.
Yup. Beggars in India have swipe digital POS/swipe machines. See article https://indianexpress.com/arti...
I'm not repeating myself
I'm an X window user; I'm an ex-Windows user
Banks love the "cashless society" because they get a profit from every transaction everywhere. The government loves it because it provides a trail of breadcrumbs through every place you visit, complete with time stamps. Does the government really need to know which fast food outlet you prefer or where you go to buy groceries? I don't think so, but the data is being collected nevertheless.
The original post indicates that cashless societies are dangerous. Well, it is a different danger. There are reasons why low-infrastructure, high violence locations (Afghanistan) turn to digital money. Cash invites criminals to commit violence for cash in cash societies. Businesses hate handling cash when it gets to be enough to be a security concern.
While the digital can have broader theft, it has less violence. That is a point in its favor.
I am not willing to sacrifice liberty for security. A digital, cashless society just invites surveillance. It screams monitor all of my habits and create a profile on me. I could see something like this also leading to a social media credit score like that in China. It also creates a single point of failure: the network. The network goes down and you cannot purchase goods and services. These days vendors rush crappy products out to market so a major failure is always a minute or so away. I am a truck driver and I often go into areas where I still - in 2018 - cannot get cell reception. I don't care what you say; cash is king.
Try living for a few days or weeks without power and see how well your cards work.
... you would have each been better off performing the transaction through a market.
I assume you're being sarcastic. If the transaction was satisfactory to both of them, there's no difference between this and another other market transaction - except for lower transaction costs and receiving some extra intangible value.
They're better off with this trade than if they'd spent time researching competing providers, splitting the deal into two pieces with money, paying the government a cut, and spending the extra time to handle the accounting for taxes. Then there's the intangible benefits of friendship reenforcement and satisfaction with mutual sufficiency.
(By the way: They DID perform the transaction through a market. They just happened to find their corresponding market player next door, with a satisfactory .)
The fact that exchange in kind hampers productivity has been known for centuries now.
The way that money beats barter is that it is usually easier to arrange turning a piece of your productivity into needed goods or services provided by someone else if you do it in two steps than trying to find someone who happens to need your stuff and can provide what you need. When the opportunity for a good barter falls in your lap, you win by eliminating the frictions of the middle steps.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
The bank or Government can freeze your accounts on a whim if they donâ(TM)t agree with what youâ(TM)re doing. Thus, they can control or influence what you do since you wonâ(TM)t have the option to use cash.
Porn industry and Gun Dealers whoâ(TM)s accounts were closed for no reason other than the industry they represented come to mind for this.
Going full digital will basically add a hidden tax to every purchase. A processing fee or something similar.
Think of major CC vendors transaction fees.
Full digital is also a surveillance States wet dream as every purchase can be tracked, flagged and / or categorized.
Finally, the proliferation of malware and assorted nasty stuff designed to steal digital credentials for purposes of fraud is a real turn off for going cashless.
Fix all the aforementioned problems and weâ(TM)ll talk about it. Until then I will use cash when I wish because I can.
legal pot shops are very cash only and banks don't really want to deal with them.