After Cash: All Fun and Games Until Somebody Loses a Bank Account
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— The largest cash note is 1000 Fr. (slightly more than $1000). It is readily accepted everywhere and I can pay for coffee with it and get change. (The coffee will be around $4, or $7 for vanilla latte in Starbucks).
— My ATM daily cash withdrawal limit is 75000 Fr. (not a typo). I dream of hitting it once, but I'm not that rich.
— I can go to the nearest bank and buy a physical gold bar, from 1g to 12 kg, for cash, no questions asked, no papers needed. And sell it later at the same place, with only a nominal fee taken (if still in original package).
And I like it this way. When I travel in any other country, it looks strange to me when even a 100€ bill is frowned upon and probably won't be accepted.
Today the bank can, and had recently, make mistakes, but o can still buy food on the way home thanks to cash.
Life can go on, even when "computer says no".
Currently, if there a mistake, you can challenge it, then pay. What governments want is taking money first, then you can try to challenge it. I'd say no thanks.
Also if all peoples money is in the bank, then government can choose what ever tax rate they please and just take the money by simple transaction.
[1] http://www.ibtimes.co.uk/britains-worst-bank-history-natwest...
I'm all for abandoning physical cash, but we're nowhere near having solved all of the questions, and the current alternatives available in Sweden are demonstrably worse than cash – despite the latter's shortcomings.
Have an unpopular opinion about the current governing political party? One click later a bank account might experience a "technical difficulty." Named to an unofficial secret list of troublemakers (e.g. "no fly list") by a faceless bureaucrat? ditto.
This applies not only to individuals but also to corporations. The ability to freeze (or "disappear") a corporation's finances with a keystroke could be a powerful political weapon.
From Apple to the EFF to Amnesty International... and the faces that represent them, this could open an entirely new political warfront.
Bank secrecy was here for a reason.
Isn't it a bad idea? Default limits at my bank are around 1000Eur in withdrawals a day but I have reduced my limits to what I might typically need (around 100Eur), just in case I get my card skimmed/stolen to limit the damage.
Skimming doesn't work with my card (set to chip-only operation), PIN code is 6 digits, auto-blocking after 3 attempts, and not written anywhere. I travel a lot, and the ability to get instant cash saved me more than once.
The only country where all ATMs were hard-wired to accept 4-digit pins was Israel. But I was there 5 years ago, perhaps they upgraded their ATMs since. :)
Having said that, I also like the relatively low limit to contain the damage in case of skimming or card theft.
Half a million worth of gold, no questions asked? Anti-terrorism-financing acts in Europe start with actions needed by banks and institutions at about 10-20k euro per transaction. Again, I would be among the first to doubt the use of these kinds of acts (does it stop _anything_?). But the tax dodging for one has been a real consequence of Swiss law. It's kind of where the libertarian in me meets the tax payer.
In most other countries, governments are free to issue new tax laws and amend old ones at their wish, without democratic validation. And the only feedback is the promise of candidates to fix things in the next 4 years, which they rarely fulfill.
In the US at least, the tax system is the way politicians can reward their contributors in the most straightforward manner. New, arcane deductions directed at individual companies or groups of companies make for a very complicated tax system. Politicians have no incentive to change it, and we have not elected a person who has a philosophical hatred of it.
The main issue I always saw with the banking secrecy laws that we would store money for people like gaddafy and other rogues. That we should have stored much earlier by law.
All banks, including Swiss banks, now require client identification first (no more "numbered accounts"), and they are disallowed to open accounts for some categories of people.
Those tax payers should be thanking their law makers who allow for entities within their jurisdiction to make use of laws elsewhere to avoid local laws.
I'm also in Switzerland but I'm pretty sure my ATM limit is much, much lower than 75k. Actually I managed to max out my debit card daily limit just by buying a new MacBook Pro. The limits aren't there because banks hate cash (much), they're there to stop someone being marched to an ATM at knifepoint and being forced to empty their life savings into someone else's pockets.
Admittedly, I have never actually attempted to withdraw more than about 1000 CHF from an ATM. I just assumed the limit is the same as the debit card tx limit, which I have definitely hit.
[1] http://www.tagesanzeiger.ch/wirtschaft/unternehmen-und-konju...
Abstract: Intentionally or unintentionally, poorly crafted or outdated laws and technical standards threaten to undermine security, privacy and the viability of our most promising new technologies and networks, such as Bitcoin and Blockchain. We should vigilantly be reviewing and revising laws and standards for the public good and working to prevent the creation of fragile and cumbersome systems designed to comply with these poorly crafted or outdated laws. In this post, I discuss the Digital Millennium Copyright Act’s Anti-Circumvention provision, Digital Rights Management, Anti-Money Laundering Law, Know Your Customer Laws and security backdoors. [1]
The gold is great, although it makes little sense for every bank in the world to hold gold. One or two dealers per city is fine, and guess what, they exist already and they don't have to be a bank. I really do like it, though, would definitely like it but I don't think it makes much business sense. Beyond that, it's reasonably easy to simply get exposure to the gold price as investors. The only reason to buy physical gold then is either because you're pretty paranoid about the 'system' collapsing, which is fine although not my cup of tea. The other is for tax avoidance. Let's just say I don't think it's a coincidence this service is offered in Switzerland, and that this may tell you something about the real use case of this service. It may work in a rich country with a finance industry that brings in big bucks, but Swiss policies simply don't work at scale in other countries, and have indeed cost other countries a lot of money who are in a way subsidising Switzerland. (I know because I've worked in that very industry and I've seen how it works. Although I must note, it's certainly not the only country to do this, and it's all changing for the better pretty quickly).
Anyway thanks for sharing your personal experience, I'm sure you know the above and aren't claiming Switzerland is some kind of model for the rest of the world, but that's what it appears to suggest.
If I have physical gold, it's anonymous, can be stored securely and is not transparent. Still can be seized, but this is much harder and requires actual physical force.
But perhaps you may already see why gold doesn't change that equation much. After all, take my experience as an example, I didn't have money to pay them, nor did I have credit on my bank balance (I didn't borrow through there). So there was no way for them to actually seize my money from my bank. A bit like having gold and withholding it, they can't seize anything from me, is this a solution?
No. After all, I was completely fucked if I didn't pay. Interest incurs on taxes due (quite a steep rate at that), plus penalties accrue on non-payment (super steep). In addition, at some point you get issues with the justice system. If then it appears you were withholding some gold, you're completely fucked. Now you're paying extra penalties for tax avoidance, which may be criminal depending on the magnitude. You say it requires physical force as if that's some kind of benefit, no way, you're life is screwed when it comes to that. You'll be heavily fined, may get jail time and may have a criminal record, as well as extra scrutiny on your taxes for the rest of your life.
If the government uses force on you by seizing your assets, the solution is not to hide those assets, e.g. in anonymous gold. You can't escape government force, and you're still liable for what you owe. They'll seize other assets you may have, like your home or car, or they lock you up. A system that lets you hide your wealth is not a solution, instead of them seizing your wealth they screw your life in a worse way and accrue penalties that total more than the amount due in the first place. At the end of the road you still owe what they wanted to seize.
The solution is different political policy, more legal protection for citizens to resist undue seizure, fewer mistakes with taxes etc. That, by the way, could happen when all transactions are digital, transparent, and more easily accounted for and reviewed. Even the most modern tax authorities tend to run most calculations on historical data, then give you a chance to correct them once a year. Obviously this is a flawed system: historical data is not accurate (e.g. you lose your job, they send a tax bill on the basis of your old income, you have no money, no taxes due, you must pay a huge bill, then fight it and get the money back. It sucks). And ordinary people have trouble with proper bookkeeping and do not give an accurate account of their finances once a year, it's really hard. In a world where finances are completely digital, this whole story becomes much easier and more accurate. It's far from perfect, but it's an improvement. Combined with citizen protections, a digital banking system can be beneficial.
Privacy and political oppression are enemies of financial transparency and digital systems, there are great arguments to make there against digitisation of banking. But asset seizing that you mentioned, I don't think is one of them, hiding wealth does nothing to solve the problem. That doesn't mean I approve of automatic seizing, by the way, no way. But the solution isn't hiding, it's different procedures, e.g. building in recourse prior to payment being required let alone assets being seized.
In practice, however, being faced with this 10x incorrectly calculated tax bill (and I've been there, too), if your money is seized before you can object, you are screwed. My business would have been totally busted in a moment if the money were taken automatically back then. And when this kind of thing happens, your first thought is not "we need a better legal system and transparency!". Your first thought is "where I'll get the money to feed my family tomorrow and pay salaries at the end of the month?"
And even when everything is transparent and all taxes are just and always calculated correctly (we can dream, right?), there's always a question of malice. Politicians are not always neutral unconcerned actors, to say the least.
I own a small one-person software consulting company in Switzerland, working with international clientele and paying myself a salary. I _still_ have discussions with authorities on what should be paid and why, because its in their interest to claim the most, and in my interest to pay the least (and there are no less than 20 different incredibly complicated laws regulating my business). Often I prove that I am right, and tax claims are reduced, sometimes substantially. If I have paid automatically everything that is claimed by authorities, my business wouldn't survive a single year. For larger companies dealing internationally, it is way more complicated. 50 years ago, to own a "transnational corporation", you had to be a billionaire and run a quite complicated business machinery, and laws were written according to that. Now, a one-man software company can be transnational, but some laws were not updated to reflect it.
Thus, allowing the government to peek into and seize my bank accounts at its caprice would be the disaster for me and my business.
What on earth are they talking about? Why do people keep saying cash is inconvenient, as if saying it makes it true? It is, in my experience, extremely convenient. It is the most convenient form of payment, person to person. I owe money to my friend. Do you have a pay-pass terminal? Oh you don't. Let's just log into our bank accounts. Let me make sure I got your BSB number and account number right. etc.
I want to give some money to the homeless beggar. Excuse me, do you have your bank details?
Cash is king for a reason: Convenience.
People are making the argument that because electronic payment is convenient for large transactions, therefore cash is inconvenient in all cases. This is a falsehood. They are both convenient in different cases.
In a way, convenience is in the eye of the bearer.
(Never mind the whole commercial surveillance angle. I've actually made it a point to go back to cash at various places I'd gotten lazy with. Hitting the ATM every week is a small price for participating in society's most popular mix network)
I'm also waiting for panhandlers to figure out Square is free, assuming they have a smartphone. "Sorry, no cash" stops being the end of the interaction if they start taking credit.
Do you like taking chances like that? Cash saves you here.
Edit: You likely meant to pay for things while you're visiting there? Yeah, I would probably use cash for that too.
:)
All of those options work across the world.
Sarcasm aside, I think the entire debate is just blogspam, both have benefits and both will probably remain for a long time.
First off, Walmart will wire up to $50 for $5 domestic, not $25.
Second, what's the point of sending $1 to much of the world, where it isn't legal tender?
Third, "cashless" in this context means domestic use. Even if we were all cashless tomorrow, you'll still have to pay transfer fees to put $1 into an overseas account. Plus, the bank on the other side may charge to accept that transfer - mine does.
Fourth, the failure rate for sending $1 through the postal system has to be pretty low, because it's hard to detect a single bill in an envelope. A high failure rate would mean that every letter would be opened up, just in case there's cash. That level of tampering is easily detected. (Of course, sending cash overseas is different, as international letters stand out, and perhaps might more often contain cash. But I have send cash to South Africa and it got there just fine.)
If we instead talk about sending $1 inside the US then it's $0.49 for the stamp and $0.07 for the envelope ... for what may be door-to-door delivery.
What other system can beat that price? (I think Bitcoin's transaction fee is slightly less, but not significantly so.)
I've never paid for a bank transfer within Europe, even when the transfer crosses national borders. I've always just assumed that to be one of the basic ideas of a banking system.
This might differ for commercial accounts though.
I use contactless card payments for pretty much everything except coffee these days.
Considering the second point, would you consider using cash more? To get a better feel at how much/little you're spending each time.
On the other hand, "convenience" is a contrived reason to favor cashless transactions. As if the whole purpose in life is to reduce friction from our lives. It's not. Oh, it frees your time up to do other things. As if people didn't have enough time. The main thing lacking for most people when it comes to time is time management and allocation. That is, people who might save an hour's time by automating activities don't go out and spend that hour productively. Likely they'll find something else that'll use up their time.
So, we have people who work in industries which are automating jobs away [say Uber, or even supermarket automation, HFT, etc.] but who on the other hand want authentic hand made or bespoke items. Why not go for the mass produced item from Walmart they helped get produced and are more "convenient"?
> As if the whole purpose in life is to reduce friction from our lives. It's not.
Purpose? No. But it does feel really good not to have friction with silly things in your everyday life.
> That is, people who might save an hour's time by automating activities don't go out and spend that hour productively. Likely they'll find something else that'll use up their time.
Why do you say so? What's objectively productive? Doing nothing with the extra time may be actually a productive / useful solution. If your day is full, just removing stress from life is great.
> we have people who work in industries which are automating jobs away [say Uber, or even supermarket automation, HFT, etc.] but who on the other hand want authentic hand made or bespoke items
Do they? Some probably. But generalising like that over whole industry's lifestyle is silly. Even if you do see those items, maybe they just buy something cool they like, which is simply not what's mass produced and stocked at Walmart.
I feel like you're trying to criticise lifestyles of other people, but don't see a real reason for it.
I feel like you are reading way too much into it. You say less friction "feels really good", but don't address his point that maybe less friction is not actually good. There are many areas of life where this is demonstrably true. Take road widths, for example. If we "reduce friction", we end up with wider and straighter roads which have shown to cause people to drive faster and results in more fatalities (i read this on the internet somewhere). Sometimes friction keeps us grounded.
I found nothing offensive about the parent comment, and have noticed similar things.
For example, human inter-relationships are full of "friction". For some people not having friction would be ideal, for others a relationship without friction is no relationship at all.
And I think that can extend into the physical world. Maybe I'd like to remove the friction of having to wipe after going to the toilet --but it's also a good reminder we're still part animal. So it is when we actually have to drive or cook for ourselves. We're not just commanding people or things to do the bidding for us -we have to face the "dirty work" whether it's having another human do it for us or ourselves. But automation removes this mirror.
The "reason" for it is that we could lose touch with our own humanity. It all becomes abstracted --it's a transaction, the human labor (or lack of it) are not even considered any more. I know this might sound like it's coming from a luddite, but it's not. It's just observation and it may or may not have import in the future, if we keep going this route.
Btw, a bidet is pretty good.
Fine. Prove it. Collect your pay in cash. Pay your rent in cash. Do all your shopping with cash.
Otherwise, lay off the fairy stories and moralising.
There are many, many apps out there to facilitate many things, to reduce friction. You know the two that matter most to me [other than telephony]? Navigation (maps) and Yelp (or similar) [finding food, entertainment]. Most other things can wait till I get to the office or get back home. I detest the idea of being electronically "tethered" into always on attention.
Alas, I always struggle to explain it to people from primitive banking cultures.
That destroys the human element, which is a big part of the restaurant/hospitality experience.
There are products out there that let you order through a tablet at your table, and also apps that let staff use an iphone instead of a notepad, but it takes away a large part of the experience.
It's fine for places like McDonald's (who now have touch screen ordering in some countries, like New Zealand and Australia), but if I went to Bouchon Bistro, I wouldn't want to be ordering through a tablet.
Open Venmo or Squarse Cash, type name (gets auto completed), type amount, done. Works regardless of whether your preceding set of transactions has left with exactly the right number of bills of each denomination.
Honestly, I consider that easier than cash.
I know I enjoy arguing about whether the cash I have is too large for the other party to conveniently make change for. I especially enjoy my wallet bulging with coins and wads of paper. I love the thought of having the week's grocery money ready to be lost and stolen - or even better, carrying my whole pay packet about until I can put it somewhere safe.
What's interesting to me is how far ahead some poorer societies are than us in the cash department. Such as in Africa. They have gone all mobile payments and eschew the local currencies.
Or claim to.
I take your point though. The inconvenience to the mugger to force you to travel to an ATM may be much greater than making you send a larger amount with your phone. After all, with physical cash it was very believable you didn't have more money that can be extracted. Now that you can move more, the mugger can force you to move more.
BUT then you can reverse it later. Unless you can argue that the mugger would be more likely to kill you afterwards than before, as a result of the sum. But then you could have the reversals happen anyway, and the muggers would know that's the default. All that remains is proving it was a mugging... all the transactions could be reversed based on that (we are not talking about bitcoins here, but systems of credit so the mugger might go into debt if they spent the money already). The idea of banks etc. instead of bitcoin actually helps in a libertarian type system because the money can be yanked back and the mugger doesn't want the inconvenience of never having a bank account. Plus if his other property is all interconnected, then crime really won't pay, and there would be less need for incarceration. We just have to somehow have fair systems of proving it was really a mugging. Maybe along the lines of the DMCA... someone could claim a mugging and then you'd have some time to respond, both sides would present evidence, and there would be a global reputation for both true and false claims of mugging.
Anyway I think in practice there have been less muggings now that cash is digital in Africa.
Also, WADS of paper? Jeez, get a moneyclip...
I routinely dip into the spouse's in-vehicle change-hoard tray to refill it, because apparently some people can't be arsed to fish a penny out of a giant pile of coins when their drive-through total is $X.01, and would rather dump $0.99 in coins into it--never to be spent--instead.
In theory, you should never need more than four $0.01 coins, never more than one $0.05 coin, no more than two $0.10 coins, and not more than three $0.25 coins, per cash transaction. If you have those 10 coins, you can always provide exact change. If you do not have those exact ten, you can always spend some of your coins, such that you get fewer than nine coins in your change. In practice, I need more coin slots, because I am spending coins that do not originate from my own transactions, and need to spend as many small coins as is possible, rather than maintaining an efficient working set of coins in my wallet.
If no one else is filling up a change jar at home, your coin holder only needs to hold ten coins (in the US). It will fit in the same space as a paper note folded in half.
Aren't here any equivalents in the US? Any particular reasons why apps like cash.me don't get adopted?
I can even pay the kids selling strawberries by the roadside via Swish.
Then again, Sweden is in the forefront of the cashless society at the moment, for better or worse.
Accepting Swish-payments for merchants, companies, organizations and associations is not free however. The last time I checked (a couple of months back) - Swish was more expensive than handling credit cards in general.
The application is however a gratis download from the AppStore / Google Play store.
https://www.bankgirot.se/en/about-bankgirot/participant-requ...
There are plenty of legal regulations to wade through to join, but it's not impossible and the requirements are publicly available.
Here in New Zealand, the only places that don't take cards are small stalls at farmers markets (most of them take cards now), and some taxis (which is more to do with them trying to avoid tax and being generally dodgy, any good taxis take card).
I have the bank account details of all my friends saved, and I can just open up my banks app and send them money, and it arrives within an hour into their account for all but 1 bank.
My belief is that the biggest weakness of a solution is generally a side-effect of its greatest strength, in this case the need to carry around cash in different amounts and risk losing it, having it stolen are necessary in order to have something so easy to exchange among people.
Cash has other inconveniences cards dont have , and viceversa.
Until very recently, as a visitor you will be losing 30% of value if you withdraw funds from ATM or pay with card, as opposed to bringing USD cash and exchanging it on street.
Why do people keep saying talking in person is inconvenient, as if saying it makes it true? It is, in my experience, extremely convenient. It is the most convenient form of communication, person to person. I want to talk to my friend. Do you have a phone? Oh you don't. Let me make sure I got your phone number right. etc.
I tend not to give homeless people money in general, I rather do it via an institution or buy them what they need. If they say they need some money for food I'll go shop with them if I have time. But I've indeed also walked to an ATM at various times, which are fortunately all over the place in my city. Even if I had cash I'd always be a bit conflicted to give... On the one hand I've spoken to various (ex) homeless people and they advised me not to give, not be naive for my sake and their sake (read: drug addiction, better dealt with by an institution which are pretty solid in my city). On the other hand, I've loved ones with homelessness in their past who've rebounded by the grace of complete strangers' help, including financial help, and didn't ever use drugs but were really down n out and on the street. You never know which of the two you're dealing with.
But let's be real, helping homeless people isn't exactly a daily use case. If it was something you do frequently enough, there'd be way better ways to do it than giving away random small bits of cash.
Everything else, digital is more convenient. For example if I have dinner with a buddy, on the way back home I'll grab my phone, open my banking app, click his address which is automatically saved from the first time I used it, type in the amount and press send. It's virtually the same as grabbing my wallet, calculating the tokens I owe him and handing it to him. Payments are literally like messaging for me, but you're sending digital value tokens instead of digital speech. Yes it's hella convenient to do digital messaging of money.
The thing about digital payment's that's more convenient is that I don't rely on carrying a specific denomination of cash with me, or rely on being in physical proximity to the payee. Need to send $500? Well I'd never carry that kind of cash, so that's an ATM trip for me, and then a trip to the guy I owe it to. Digital money is more convenient here.
Payments in stores? Both I and the cashier need to do basic calculations with the tokens using cash, and again I have to carry enough on me. Turns out digital cash is easier and faster. I have my card out by the time it's my turn in the queue, I let the cashier scan, then I hold my card next to a little NFC scanner and I start walking away. In some older places I put in a 4 digit pin, even so it's faster than cash. That's convenience for me.
Don't get me started on online payments, which are btw causing physical store bankruptcies left and right. I see it all around me, I've got friends who buy their entire wardrobe online, their phone online, their groceries online etc etc. I'm not much of an online shopper myself, but even so I rarely use cash and the reason is convenience.
In this thread I have seen dozens of comments about muggers and knife wielding assailants at ATM machines. In my 40+ years on the planet, including living in NYC and DC and traveling to dozens of third world countries, I have been mugged exactly once, in 1989. I was able to get away without giving up any money.
Meanwhile, the number of times that an electronic account that I hold funds in has been unexpectedly lower than expected due to error, misunderstanding, or fraud, is at least 100 or more.
I haven't actually had actual cash in my wallet since before Christmas. Every store takes credit or debit. I can email money to people I owe money to. Cash is darn inconvenient.
Giving money to homeless people is just about the only thing in your list I can't do.
We also have contact-less payments with both credit or debit so it's even faster for low cost purchase. Need a coffee from starbucks? Just tap your credit card and go. But the time you put the wallet back in your pocket it's authorized.
And guess what? None of these systems talk to each other. Even PayPal USA doesn't talk to PayPal China for goodness sake. Most payment systems require local addresses and phone numbers to even register an account, so if you're a short-term tourist or business traveller, you're out of luck. If you're a frequent international traveller, cashless societies are going to be absolute hell unless we come up with some kind of internationally-standardized protocol, which doesn't seem to be happening any time soon because each payment system has a corporate agenda behind it.
Cashless makes travelling easier. It's far easier than managing different currency for each country: SEK, DKK, SGD, EUR, AUD, some USD for those US trips, and all the small change you can't get rid of in each country. Why not use the same tap-to-pay cards that you use when at home, considering they work everywhere?
If you mean receiving money from someone while travelling, perhaps that is a more awkward case right now. But Paypal seems to work across many countries.
When it works, yes. I believe you about Europe, and perhaps Australia and Europe are politically and culturally friendly enough with each other that the businesses there made it work. But try Japan, China, Korea, for example. My Visa card wouldn't work in Japan, and in China UnionPay is pretty much the name of the game.
Also not to mention, every time I use my Visa card abroad, the fraud center tries to call me to "verify" transactions. They always call my US number (like, hello, I'm abroad, I probably can't take calls). My phone answers with a recording that says the only way to reach me is by e-mail. They don't e-mail (we're in the 21st century, hello). Then they disable my account, rendering me unable to pay for my meal in some foreign country where I can't speak the language. Then I have to call the Visa customer center, from the middle of the street, yelling my social security number and card number in open public space, "verify" some stupid transactions that I have no way to verify without logging into my account at a computer, to get my card reactivated again before I can pay and leave. Great security they have, making customers yell personal information over the phone instead of typing it in.
And yes, I tell them I'm leaving the country before I do. But they still do this. And their geography sucks. I told them I was travelling throughout Eastern Europe once and they disabled my card in Bosnia because they didn't know it was a part of the region I was travelling to.
So now, whenever I travel, I carry a spare $1K USD in cash or traveller's checks, split up and stashed on different parts of my person and luggage, for emergency situations like this, so at the very least I can buy a one-way flight ticket home if all other electronic payment fails. Cashless just doesn't work, yet.
Some of that seems bank related: my Australian bank emails me fraud notifications, I can add international cell numbers for txt if desired. Their website / app lets me tick off individual countries I'm visiting, and log-in to update it if I change my travel plans. If your US bank is using SSN for verification, that's dodgy :(
I feel you though, and I still take a (small) cash reserve when I travel. But I also take backup preload cards: Travelex offers Cash Passport, and both Qantas & Virgin offer Mastercard tap-to-pay built-in to their Frequent Flyer card (which also earns points). All three support Japanese Yen natively, so should work in Japan, but China and Korea are probably a no-go.
Some countries suck, though. Denmark has many misconfigured payment systems that block overseas cards (they misinterpret "Address Verification Not Available" as a decline), and you probably don't want to use cards in countries with high skimmer fraud. So we're not cashless yet, no :)
The effect is that in the middle of all monetary transactions, there is a mandatory and forced private profit scheme. That's insane.
Cash is free to use, and bears no intrinsic fees. The same is often true of personal checks in the USA. While these are the most labor intensive ways of transferring money, they don't incur any intrinsic shrinkage in their use. All the digital and fully automated systems of transferring money are more expensive at face value.
It's not surprising that lesser educated people would find it convenient to not have cash. Though those don't understand what they would loose in the first place. Cash means freedom, no one can spy on what you spend your money on. And a big part of the money is still spend every day in the real world on location, and the smaller part online. Also cash cannot loose value as easily over night or even vanish without a trace (banks are private and can go bankrupt). It's very easy to keep track of your spending, when you use cash for all location payments (banks of course would like to loan you money). And remember, there was a time when banks were a new thing, and to catch consumers they provided bank accounts and services for free. Back then, you got your money from your employer in cash. Suddenly, employers started to pay out the money only to bank accounts you were locked in to the back system and of course they started to charge you for bank account and all their "services" incl ATM and cards.
Accounts are free, because the bank benefits from having your account in their ledger. They make loans and investments using that balance. Its the business they're in.
HN typically is in favour of privacy, and against surveillance. Then is equally enthusiastic about cashless apps which have a transaction record for every tiny amount. I don't understand :)
I'll generally buy most day to day items with cash and a card just for online. I don't find it any way inconvenient - there's an ATM at the supermarket and near all the shops I visit.
Amongst children and friends I don't see any evidence of a move to cashless either. They'll still take notes for a night out and make sure to leave enough for the cab home, or go to the hole in the wall first. They'll use a bank app to pay back a random £20 borrowed.
"Cashless society" is a cute idea for tech enthusiasts living in urban areas (nothing wrong with that btw) but it is not feasible for most of the places where I find myself.
Banks charge business owners to deposit nontrivial amounts of cash too, especially in the form of coins.
I don't have any insight on how much costs this is actually causing BTW. But I recall handling costs for businesses being an argument in the debate to abolish pennies (in the US) or 1ct/2ct coints (in Europe).
FWIW, the merchants in one city in Germany are currently trying to stop accepting 1ct/2ct coins, because the bank charges the merchants 1ct per coin to deposit, so they aren't making any money on it.
Many banks don't charge fees for using machines that count coins that are dumped into them. However, some big banks are charging customers who deposit lots of cash. At one major bank, there's no fee for the first $10,000 deposited. After that, you'll pay 20 cents per $100. [1]
[1]: http://www.bankrate.com/finance/banking/sneaky-bank-fees.asp...
My bank generally charges 0.225% on bank notes deposits and 2.25% on coins deposit for commercial customers. The max per month without fees is 1000$, coins always have fees.
My bank is one of the big 5 canadian bank with assets in management over 500B$.
If you need to contract an armored courrier to move that cash, that's an extra very significant fee.
For a "cashless society" surely the fees will be regulated. FWIW, the EU recently limited interchange fees for credit/debit card transactions to 0.2% for debit cards and 0.3% for credit cards.
Add scheme fees (around $0.01 + 0.017%) and acquirer markup and debit cards don't really cost more than 0.5% and credit cards 1%. Often cash handling is a lot more expensive than that.
In such a case the bank has full records of everything that happened, and auditors could come in and figure out exactly how much is owed to whom.
But what would happen if online attackers got into a bank's systems and completely pwned the bank, having free run of the system for several months. Suppose they wiped all the live data, and managed to also wipe a few months of backup data.
How would FDIC figure out who lost what from insured accounts if the bank itself no longer has records covering that?
If the fraud is so extensive that the bank cannot afford to reimburse all of the customers, then the bank is undercapitalized and will be taken over by the FDIC.
[0] who gives what amount of money to who and when for instance
Now being rolled out in China: ATMs with face recognition.[2]
[1] http://hkmb.hktdc.com/en/1X09V6YK/hktdc-research/ATMs-to-pro... [2] http://en.yibada.com/articles/35951/20150601/china-worlds-fi...
As a result I love cash. The only time I use cards is online or larger purchases where I can't easily carry around that much cash.
Cash has been around for thousands of years. I doubt it can be removed from our society without a great deal of backlash. That is a very good thing in my opinion.
This is the reason there's so much talk about going cashless these days. It's being propagandized so there's less friction when they decide it should happen.
People will just ditch banks and return to exchanging physical currency in their transactions. Why would you need electronic money if it incurs additional fees?
Basically we're setting up a system where private entities will be able to tax and control participation in the economy, and we're doing it without any sort of debate except over how annoying coins are. Personally I'm not very impressed.
"HSBC shuts accounts of Muslim organisations, including Finsbury Park mosque": http://www.theguardian.com/world/2014/jul/30/hsbc-shuts-acco...
The article mentions crime as a main motivator to shifting away from cash. The amount of robberies/muggings have gone down, but card theft and fraud is sky-rocketing. I would be interested to hear more about how kidnapping/extortion have fared in comparison as well.
The article mentions that retail crime will be just a memory after we've shifted away from cash. There has been plenty of retail card theft and fraud stemming from hacked retailed networks and hacked/rigged payment terminals during the last three years (2013-2016).
The article mentions that shifting away from cash would give the governments of the world a leg up in controlling our usage of money. I have nothing to object to there, but would like to add that it also gives private companies a leg up in controlling our usage of money as well. Both from the perspective of knowing where we spend and what we spend on - but also as they can terminate the contract to any retailer or payment processor at basically any time. Sure, not everyone is Wikileaks - but when you've broken the principle, it could happen to anyone.
Unfortunately, nobody knows how to make it scale yet where it will be usable by a large number of people and still maintain this "trustless" quality. Hopefully all of the smart people currently working on the scalability issues will solve this problem and we can move to a digital cash future.
It is good our government would never violate our freedom.
I suspect this is considered a feature, not a bug.
I've lost my card, went to a bank, showed my passport, got enough cash for a couple of weeks and got card replacement in a few days. What would happen if the society was cashless? Would I get a new card immediately?
It is as if our arms are bent to deposit our money in less than trustable places without guarantees.
Are they trying to prevent banks from bankrupting or what?
You also may not want government to be able to seize your money like it was done in Malta or in Greece.
Banks are privately owned entities I do not trust. I have the right to not entrust my money to thieves and parasites without a minimum of security on my savings. Especially when they could bankrupt.
A while back I got a random letter written in German that I had to ask a friend to translate for me. Turns out that a few years ago I had pre-paid for some computer equipment that was under development in Germany. The company director had played fast and loose with the rules and used my money to (fail to) develop the product, before the company went bankrupt. Because of this breach of the rules, the company lost its limited status, and the director was personally responsible for the debt to everyone.
One need only look to the history of the United States before the greenback to see it.
People do business outside the formal economy. They do cash only business. Unemployed/underemployed don't simply stop breathing. Since we have a high U6 number, the hubris of even considering this is breathtaking.
Stretching a metaphor too far, "cashless" is censoring the economy. What happens when the economy perceives this and routes around it?
There is currently no proposed changes to those laws in the direction of scaling down cash. There are however proposed changes in the making that will make cash more available than they currently are. The chief of the Riksbank (National Bank / "Federal reserve") have an article in one of the major newspapers about this very subject, published today [1].
[1]: http://www.dn.se/debatt/bankerna-maste-ansvara-for-kundernas... (In Swedish)
This excerpt is from the article [1] linked in the Bloomberg article [2]
[1]: http://www.nytimes.com/2015/12/27/busines/international/in-s...
[2]: http://www.bloombergview.com/articles/2016-03-15/the-end-of-...
What I'm saying is that the way the paragraph is currently written is not clear on that and could be interpreted as Swedish abolishing or thinking of abolishing cash from a legal perspective - especially if you do not read the linked NyTimes article.
A no-cash system, beside all the other downsides, reduces and sometimes outright removes the ability for humans to alter and/or workaround the system when systematic failure modes are discovered. And that's just unintended consequences, forget about perverse incentives.
This is the same reason I think augments that posit privacy is unnecessary because enough downstream controls will somehow account for all "bad" things that could happen. It's a scam, pushed by unscrupulous hucksters for their advantage at the cost of everyone else.
Credit cards are still very much not in vogue in my town. Actually, even in larger shops like Ikea, credit cards are not accepted.
>visiting the local bakery. Kamps usually accepts credit cards, even contactless.
Some IKEAs accept credit cards, whereas others don't. IIRC it depends on how close they are to the border.
The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. The public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone. ... As an additional firewall, a new key pair should be used for each transaction to keep them from being linked to a common owner. Some linking is still unavoidable with multi-input transactions, which necessarily reveal that their inputs were owned by the same owner. The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner
Why would they be of equivalent value? Consider how much harder it was to steal $100 million in cash, how much more planning it took, if even possible.
Sure, outright theft may become less lucrative. But if cash completely goes away, black markets can and probably will start using their own medium of exchange.
Unlimited inflation time!