In praise of cash
aeon.co
aeon.co
* Ways that involve cash or cash equivalents
* Ways where a purchase requires the permission of someone else
Just think of the word authorization, which is a required element of essentially all non-cash transactions. It has the word authority embedded right in it. If you're OK with that concept, you are necessarily OK with the idea that someone you have never met and don't control has the ability to stop you from using your funds in the way you'd like to at any time.
A cashless society is, at a fundamental level, not free.
What are you hiding citizen? Nothing to hide, nothing to fear.
He buys a 12 pack, and his kid steals it, and gets into an accident causing front page news. His kid lies, and says dad gave me the beer. (He is screwed.)
He goes onto physical therapy office. One of the legitimate places that, but sounds weird--like the power of hands--whatever. The wife sees the bill and it always stays in the back of her mind forever.
He buys a pressure cooker, and is suddenly profiled?
He pays out of packet for a CAT scan because he's a hypochondriac, and things he has a brain tumor. He is forced to claim he did have a CAT scan on all those pesky insurance forms. (Happened to me.)
Yea some of these are far fetched, but not being able to buy groceries last nights wasen't. My slick new chipped bank card was not recognized by the machine. I usually carry a c-note, but used it the following week because of bank card problems.
I guess the McCarty Era is not taught in school anymore?
So no--I don't want a paper trail either. Hell Safeway knows my diet better than me. (Yes--different card.)
I certainly do not want my bank passwords to be with the government. My bank accounts can be wiped out. Hence I do not like my communication recorded at all for this reason.
So yes, for this any many other reasons, it's good to keep secrets from the government.
By the way, pot is just an example, you can literally dig millions of unjust laws up if you looked, we're all just conditioned to OBEY.
It's not like we need more people running around with impaired decision making ability.
* Your government won't adequately protect collected information from your stalker
* Your stalker has friends who work for the government
* Your stalker works for the government
* You're gay, and live in the UAE, where your outing may result in your death
* You're gay, and live in the USA, where your outing may result in your death
* Your government has too many laws to count - nevermind read - and can find a violation of them for anyone, given enough time
* Your government won't adequately protect collected information from other governments
* Your government won't adequately protect collected information from your competitors
* Your government won't adequately protect collected information from identity thieves
The government is not perfect. It's made of people. People who may be racist, sexist, homophobic, desperate for money, greedy, or corrupt.
- Someone's ex burned them, now they hate everyone of __ gender and go out of their way to dig through information of those people and get them in trouble.
- Someone is anti-LGBTQ+ and uses information to hunt people down and get them killed.
- A racist particularly hates a certain race, and now goes after them in particular for small law breaking things -- jaywalking when no cars are coming, not using their blinker, not coming to a complete stop at a stop sign. And while those are all crimes, now people of that race are being punished disproportionately.
- Businesses with their hands in the government now have information to use against their competitors and create monopolies
- Limits free speech - can't even discuss things privately.
- Further removal of all freedoms because now you can't get away with anything even if it's a controversial thing such as drugs, sexuality, art/music, and protest.
etc.
Governments are not permanent. Significant changes in government can occur through democratic election, revolution, invasion (Ukraine?). Such changes can happen very rapidly. Records can not always be easily purged.
If the incoming government is ideologically opposed to something that you are or you declare (race, religion, political views) and they have a lot of information about you collected by the previous government - then you could very well be in mortal danger.
There are many examples of this in history.
So benign governments should aim to collect the minimum of information required to deliver good service to its citizens. Neither you nor your hopefully benign current government can trust the governments that are to come.
https://www.nerdwallet.com/blog/credit-cards/credit-cards-ma...
https://www.nytimes.com/2016/03/27/your-money/credit-cards-e...
Merchants prefer cash as card costs them money.
Usually works with dry cleaners, cafes, etc. Big businesses generally say no.
I'm not sure if this is more prevalent in certain regions, because I never noticed it until I drove west from the east coast. First I was confused when I stopped at the cheapest gas station I saw somewhere in Nevada, only to discover it was cash/debit ONLY, and I think there was a 35-cent charge for using debit. After that, in California, I started noticing how easy it is to see the cash price when driving by, but you often have to look closely for the credit price.
It seems some states still ban it by law, though.
Many ATMs already have the hardware. To improve counterfeit recognition, most ATMs which accept cash now take a high-resolution image of both sides of the bill and do considerable processing on it. It just takes a software upgrade.
Some bank counting machines also have this feature. Cummings markets their cash counter to law enforcement, so they can capture all the serial numbers from a drug bust and track them.[4]
[1] http://www.grgbanking.cn/en/chinaATMs/images/H68NL.pdf [2] http://hkmb.hktdc.com/en/1X09V6YK/hktdc-research/ATMs-to-pro... [3] http://en.yibada.com/articles/35951/20150601/china-worlds-fi... [4] http://www.cumminsallison.com/us/en/products/currency-handli...
If five of the twenty bills you withdrew at 9 am were deposited by Seven-Eleven at 7 pm, I can guess that you went shopping at Seven-Eleven... And more likely then not, I'll be right.
A particular bill does not change hands very frequently between ending up at a bank. If anything, a bill that you withdrew not ending up back in circulation is suspicious.
Right. At one time the US Fed estimated that the average number of transactions for cash outside a bank was two. That's an old number, measured years ago to plan bill replacement. (One of the Federal Reserve's functions is paper bill replacement. Banks pull worn bills and send them to the Fed, which tallies them, shreds them, and replaces them with new bills from the Bureau of Engraving and Printing. Dollar bills last about 18-22 months.)
Luckily I can still go weeks without touching my EC card these days.
The cashless society – which more accurately should be called the bank-payments society... is a utopia where money cannot leave – or even exist – outside the banking system, but can only be transferred from bank to bank.
Such a system replaces a relationship between two parties with relationships between those parties and the bank. If either party falls out of favour with the bank, they can't do business with each other.
For an immediately ready example, I present Paypal Seller/Buyer disputes on eBay.
I'm always a little tickled by tech people hyping the idea of a cashless society. Don't we all hate Paypal?
1) ban cash, so that humans need permission to interact when an exchange of value is involved;
2) improve the oversight of the permission-givers, so that the permission-giver-watchers are less arbitrary and annoying, in order to fix the problem that never existed before point 1.
Other than lining the pockets of poor, underfed bankers and giving busy-bodies veto power over our interactions with others, what problem are we solving again?
I fully agree that this places a big amount of power in the banks' hands, but what alternatives are there? (I'm honestly asking, are banks the lesser/only evil here?)
I'm not seeing cryptocurrency fixing this, but maybe it is possible. From my limited understanding, if transactions were mapped to some contract, it would void some anonymity of the system, and it probably wouldn't be possible to get money back in case of fraud anyway, so there's that.
Also don't forget that Peter Thiel got really rich by selling Paypal to eBay in 2002. After that in 2003 he founded Palantir Technologies - a company that produces surveillance software for the three letter agencies.
I often like to say that getting lots of money does not make you a bad person, but brings your true character traits to light.
The banks were happy to charge a big fee to send a bank wire or cashiers check. Just wouldn't deal with a credit card.
It's obviously because the bank ends up on the hook for liability in the case of disputed or reversed charges. They judged that market to be too likely to result in their losses so they simply refused to let me do business with the seller I wanted to use.
Big miners can easily delay your transaction, by refusing to include it in a block, but the only way they can prevent your transaction entirely is if all of the miners collude not to include it.
It's still effectively impossible because it would undermine confidence in the system (which is why people are willing to pay miners in the first place).
However, they have to be pretty committed to this, because if someone outside of the group does eventually mine a block that contains the censored transaction, the group members also have to be willing not to build on that block, and to trust each other not to do so. Just agreeing not to include the transaction in blocks themselves would be insufficient.
At that point there are complicated questions about how stable and credible the arrangement will be, since systematically avoiding building on certain mined blocks involves slowing down the consensus slightly, and also trusting that the eventual consensus will exclude those blocks.
If, say, 51% of mining power committed to censoring one particular transaction, that might yield an effective fork of Bitcoin for some period of time because the other 49% might gamble on their ability to get their rival blocks accepted in the long term (or, if they didn't know about the 51%'s policy, not see any reason why they shouldn't simply build on what appeared to be the longest chain!).
PS: Add up the Chinese pools and one country effectively already controls bitcoin.
Looking at the chart, you can see that the top 5 mining pools can collude in being a single entity to "control" the blockchain (I believe this is called a Sybil attack [https://en.wikipedia.org/wiki/Sybil_attack]). Now keeping incentives in mind, the idea is that people using bitcoin have faith in the system. That gives bitcoins value. Miners get paid in bitcoin. If they were to manipulate the blockchain, that would most likely cause bitcoin's userbase to lose faith in the system and thus what the miners would be stealing would suddenly have little to no value.
I'm not positive, but I recall hearing that pools have been intentionally been made smaller to keep users' faith in the system. Perhaps the goal of these majority mining power is not to steal bitcoin but censor certain users? That may be a bit more complicated depending on the users' opinions on a case-by-case basis. Fun stuff :)
A Sybil attack can occur when a system designer mistakes a system identity to be exclusive with other ones. e.g. you could create a website that used a phone number as a user identifier and give every new user a $5 signup bonus. But if someone found a way to create valid phone numbers for less than $5 each, they could exploit your new user bonus system.
If it's free/cheap/easy to create new identities, you must be careful how much weight to give those identities. e.g. reddit has some problems related to how easy it is to manipulate voting. They have probably made changes to their algorithm over the years to deweight new/unverified users and likely other clever things to detect voting rings.
A pithier version would be: it's infeasible to censor transactions and if a nation state spent enough to try it, it would indeed be noticed and the community would fork.
Look at the Ethereum Classic debacle - and remember that many Bitcoin users tend to hold those views stronger than many Ethereum users.
How much money is in my Bitcoin wallet?
If you watch for long enough, you can wait for a transaction that spends from the address you know, and you might find some other addresses that were spent with it.
It's true that a non-zero amount of information about your Bitcoin holdings is leaked. But it's not true that that amount is 100%.
Other cryptocurrencies like ZCash, Monero, etc solve this in a more elegant way by making transaction actually anonymous.
The example in the article, about the Coke vending machine. Imagine in the past, before vending machines - the only way you would be able to buy a Coke in that particular area would be if there was enough foot traffic to justify a full time real human being to sit there all day, with inventory of soft drinks, and exchange your cash for them.
The opportunity cost alone of having a human being sit there and accept payments, and risk being robbed, is immense compared to the cost of putting a vending machine there with an electronic payment system.
I would argue that without new technologies like this, your ability as a consumer to buy a Coke would be severely limited.
We might as well go back to a feudal society where everyone met in the village market during the morning to buy food and goods. The convenience factor alone of being able to buy anything you want in almost any area of the world, at any time of day or night, without having to have a live human being there to perform the transaction, is huge.
My country will be more or less cashless within a few years. We are handing over complete power over the economy to unaccountable private institutions, and the debate always comes down to convenience and eliminating robberies. It's a travesty.
(BTW not downvoting you, but your comment does inexplicably ignore coin op machines which are an existent, good solution.)
"The transaction is authorized either online and offline. For an online authorization, transactions proceed as they do today in the U.S. with magnetic stripe cards. The transaction information is sent to the issuer, along with a transaction-specific cryptogram, and the issuer either authorizes or declines the transaction. In an offline EMV transaction, the card and terminal communicate and use issuer-defined risk parameters that are set in the card to determine whether the transaction can be authorized. Offline transactions are used when terminals do not have online connectivity (e.g., at a ticket kiosk) or in countries where telecommunications costs are high."
http://www.emv-connection.com/emv-faq/
It's in wide use in Europe, for instance a ticket machine on a train or tram, or for low-value transactions (bus tickets, fast food), or where there's no connection (purchase on a plane -- where they will probably only accept credit cards beyond a certain amount).
In what societies have humans used barter?
I suspect we would instead use something like tobacco, laundry detergent, or startup t-shirts as cash or we would keep a mental register of who owes whom a favor.
All of them, including (but not limited to, since barter predates money) all the ones that also have a money economy.
And the question was about using barter, not depending on barter exclusively; every society has used barter.
And, in any case, debt and barter are not opposed; a system that uses debt of arbitrary commodities without a commonly-accepted unit of account is still a barter system (barter systems with debt certainly have existed, whether or not they were ever the dominant basis for any economy.)
And it depends on what you mean by "depended on". The central authorities of the day maybe preferred to rely on financial tools, but the people themselves performed a non-insignificant amount of commerce using barter.
"2 knicks on this clay tablet reminds me that I gave Tom two bushels of wheat, and Tom will return to me 2 pelts," contrived example to make the point aside, such scenarios as I understand it, were (and are) pretty common.
It depends on what context you're looking from. Bankers might say it's a ridiculous, outdated notion, and sell the idea it's never really existed. Poor people might say yeah well, it's all we really have.
Almost all of them to some degree. Including modern societies (at rural places), especially up until the sixties or so, and even Western European cities (during the war and the very poor years post war).
Also common in communist countries...
How is that relevant? I've lived in a country that wasn't communist, but had a whole communist vs right/centre civil war. And I've visited a number of ex-communist countries, and know people from there.
But this is not about what I've seen with my eyes, it's about what's recorded in history.
Note also that I didn't say "preferred" (as in making barter the dominant and/or official economy).
Barter was very common in communist countries for "black market" stuff (and in times of great crisis, for essentials).
Here's from Wikipedia, about the aftermath of the revolution in USSR:
Civil War ensued and the economy of the new regime became even more chaotic. With mismanagement rampant and hunger sweeping the land, the value of the ruble, currency of the nation, essentially collapsed.[1] During this interval, remembered by the name War Communism, money lost its function as a store of value and a means of exchange. A return was made by people in their daily lives to a _primitive barter economy_ (emphasis mine)
Also here are some more modern examples: https://www.forbes.com/sites/timworstall/2016/12/16/another-...
And one not related to communism (as I wrote, barter was used in Western Europe and many other places as well, in rural societies, but also in times of inflation/depression): http://www.naturalnews.com/052224_economic_collapse_Venezuel...
Look at how the underground economy of drugs uses commodities like detergent [1]. This would just take that economy to the next level. Clearly to prevent currency from failing outright, going cashless would likely result in the ban (effective or not) of cryptocurrencies and the like.
[1] http://nymag.com/news/features/tide-detergent-drugs-2013-1/
Of course such currencies are economically inefficient. But I think too much monetary efficiency is bad, because it encourages financialization and excess risk. for generations now we have been borrowing from our descendants to pay for things in the present, seeming to come out ahead on paper but more often than not running up a hideous and poorly-accounted-for environmental bill while establishing a consumption-based economy that promotes waste. I've long wondered if we shouldn't treat oil as a de facto currency rather than only as a commodity.
And if you can't sell it, you've still got clean clothes.
First, such systems only work in the presence of a unit of account, because otherwise it's impossible to coherently price items in a pure unlike-for-unlike barter system. The unit of account would, of course, be money. So what you're talking about isn't a collapse of the money system, but black markets. When you say "people who want to keep their transactions off the books will use black markets," it sounds much less prophetic.
Second, the value of state money is maintained by the state's ability to levy taxes, and the state only accepts tax payments in its own money. For people living "on the grid" in a country with a credible government, this means that most of their economic action has to happen in the state's money. Since people have to, at the very least, acquire enough money to pay their taxes, and most people don't want to put up with multiple systems of exchange.
Not coincidentally, this is also the biggest hurdle for serious adoption of cryptocurrencies.
It is not a hurdle. In fact Bitcoin's growing adoption and increase of value over the last eight years has already demonstrated your worry is a non-problem. Money has value because people demand it. It doesn't matter if demand comes from the government or a merchant. Both can change their mind about what they'll accept tomorrow as money (as history has shown many, many times.)
Sure, on a practical level a currency's value will have a more solid foundation if (1) the government that demands taxes is big and stable, or (2) if a large number of merchant accepts it. But again, fundamentally there is no difference between (1) and (2). Multiple cryptocurrencies already have value resting on a more solid foundation than the value of currencies in many smaller countries.
>Second, the value of state money is maintained by the state's ability to levy taxes
Does that also hold when the state allows the vast majority of the transactions within the state to be mediated by banks and payment processors who charge a proportional "processing fee" on every single transaction which becomes essentially indistinguishable from a tax? Does that not put banks in the position of having as much, or at least nearly so, control over the value of the money of that state?
The existence of other necessary service providers who also.demans payment in the government's preferred currency is an additional source of support for currency value, not a countervailing force.
And it's often largely a secondary product of the government requiring the use of the currnecy, anyway, especially when they are heavily regulated creatures of law, like banking corporations.
Old school accounting in many parts of the world did not rely on financial transactions. Central authorities preferred "proper" financial instruments, but for the commoner, bartering was a regular activity.
Knicks on clay tablets tracked debt, sure, but the repayment may not have been via money. 2 pelts to Bill now for a bushel of grain in return next month type agreements are all over history.
It's hard to determine how much activity like this there was, and a lot of the history focused on official financial systems because, well, it's easy to find data on.
http://www.europeanpaymentscouncil.eu/index.cfm/newsletter/a...
"Although selected shops, petrol stations, railway stations and government services, each for their own reasons, have decided not to accept cash any longer, we do not foresee the Netherlands will evolve into a completely cashless society. In fact, the consensus is that the cash infrastructure will remain ubiquitous and that it is up to payers and payees to agree on their payment method."
That said, it's not hard to imagine that if you get to 90% or 95% cashless, a lot of retailers aren't going to want to bother with cash any longer.
What you end up with is informal system of money transfer such as https://en.wikipedia.org/wiki/Hawala
Such a system will emerge as soon as people are prohibited to pay directly to each other. Instead of paying cash to you, I will pay for you in restaurant.
Shit. You just made me realize something. This would be bliss and perfection and salvation for the current status quo. The Internet has come along and taken distribution, the source of basically every existing accumulation of significant wealth, and made it a worthless problem to solve. It took the primary economic engine, something only huge sophisticated organizations were capable of accomplishing with any effectiveness, and turned it into something any clever 12 year old can do in their spare time for a lark and run circles around those large organizations whose pre-existing distribution chains are now a weight drowning them.
They feel that noose tightening and know their days are numbered unless they can stop things from progressing any further. The death of any not-in-person transactions, especially any transactions over the Internet, would give them rebirth. Their distribution networks would once again be the single most valuable structure in the entire economy. They could continue to skim 90% of every transaction between creator and consumer for performing the long-valued task of distribution.
Shit.
The US government also expects your tax payment on an annual basis.
Describing gold as an incredibly popular currency makes alternative-facts look honest.
...
A currency is a store of value, but a store of value is not necessarily a currency. Gold, as a currency, has terrible properties.
1. When my girlfriend pays me her half for getting groceries.
2. Which I then use to feed the laundry card refill machine in my apartment.
Mind you, I don't want cash to go away, but yes, I essentially live in a cashless society.
While cashless systems are gaining traction, is there any actual attempt for them to replace cash wholesale?
What probably does happen over time though is that, if the cashless penetration becomes high enough, a lot of retail merchants and individuals just stop accepting cash because it's too big a hassle for a tiny slice of their business.
Really, cash relies on some sort of approval too. Someone's got to mint money and assure its scarcity (eg: value). I believe in cash for a variety of reasons, but there is no transaction aside from barter that doesn't rely on someone else's authority to buy something.
Just because using a tumbler itself is not against the law, if you use it to hide the source of income, it is still money laundering.
You can't get around financial laws by using property instead of currency. "A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property."
https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidan...
Apparently "gold laundering" is a thing in some jurisdictions. https://en.wikipedia.org/wiki/Gold_laundering
In Europe, payment processing interchange fees are regulated. Debit cards are fixed at 0.3% and credit cards at 0.2%. SEPA wire payments have zero interchange.
That's not exactly true. Payments to other countries within the SEPA must not cost more than a domestic payment. That's usually nothing for people, but businesses may pay.
As an example, the Bank of Ireland charges businesses €0.10
https://businessbanking.bankofireland.com/banking/current-ac...
So an upstart bank can claim zero fees, still have access to other banks without them ruining it for them. But in the case of debit/credit cards, you couldn't start a card processor without being subject to fees.
A flat fee doesn't inherently make more sense either, as the marginal cost of processing a transaction is negligible. The costs come from the infrastructure.
There are many ways they could price it, but relating it to transaction size makes a fair amount of sense, since people making larger transactions are demonstrably able to pay more.
Paying with cash is exchanging a promise that someone else, usually the central bank, will pay the bearer on demand the value of the promissory note.
Even if you could actually exchange the note for its equivalent in precious metals — which you can't — you're still just exchanging a token without intrinsic value. Its only value is conferred entirely by the monetary whims of the government.
Governments can, and have, on multiple occasions, completely disregarded sensible monetary policy and started printing money when they didn't have enough of it, totally destroying the value of people's cash in hand through hyperinflation. This is something you have literally no defense against.
When paying with some other method, we need to make a clear distinction between debit and credit.
If I pay with a credit card, I am asking someone else, usually a bank, to lend me the money to pay. Obviously, in such a situation, they have the right to refuse, albeit only in accordance with any pre-existing legal agreements between us.
If I pay with a debit card, I am asking one my debtors, usually a bank, to repay part of the debt they owe me to the person of my choosing. They may choose to be somewhat awkward about this, but they fundamentally cannot choose to disregard the debt they owe me, so long as they wish to remain solvent. Nor do they, in any meaningful sense, have the ability to grant or refuse "permission" to pay. They owe me money and, subject to the relevant bankruptcy laws, any pre-existing legal agreements between us, reasonable anti-fraud measures, etc., they have to pay.
None of this has anything to do with the issue of "freedom". It is simply a matter of the way financial transactions work in modern society. The amount of money in the economy hugely exceeds the amount of cash in circulation. Most money exists in the form of credit and debt. Your money exists in the form of credit and debt.
There is nothing scary or unfree about having money in the form of a debt the bank owes you, compared to having it as promissory notes from the government, or as legal deeds to property, or precious metals with a market value. Each and every store of value is entirely reliant upon the continued proper functioning of the market, the legal system and the government.
Money in the form a bank deposit is probably the safest way to store moderate amounts of money. As a physical entity, cash can be damaged, lost, stolen, etc. And the only person affected by this is you, meaning you have no common cause with any other person to recover your losses. A bank's stability and existence is underwritten by the livelihoods of all its customers, employees and investors.
This long rant strikes me as having been written by someone who doesn't know anyone who has been summarily excluded from the banking system. If you're not viscerally aware of the power that one random faceless person at Chexsystems would have over your existence in a cashless world, you're missing the point.
People can be on either side of any trade. If you are worried about inflation, be short cash.
those same people can later declare a purchase you made to be criminal after the fact. Scenarios include purchases made from someone that is convicted of a crime and the government deciding devices/equipment/goods you own are dangerous to the state
HSBC is one of the principle members of this privatised money system. It was found to be laundering money for international drug dealers, and got off with a slap on the wrist. Nobody working at the bank has been prosecuted.
(which is a nice narrative account linking off to further sources)
https://www.theguardian.com/business/2016/jul/11/hsbc-us-mon...
http://www.telegraph.co.uk/business/2017/02/21/hsbc-profits-...
HSBA(ad-blocker blocker) https://www.forbes.com/forbes/welcome/?toURL=https://www.for...
Wells Fargo/Wachovia http://www.businessinsider.com/how-wachovia-laundered-billio...
Bank Of America(Paywall) https://www.wsj.com/articles/SB10001424052702303292204577514...
No tin foil hat necessary for this one... https://en.wikipedia.org/wiki/Libor_scandal
You get a better understanding of spending by feeling your wallet then by looking at your bank statements? That smells like a false pseudounderstanding.
Seeing those bills go away with the knowledge that they're not coming back is quite enlightening.
https://www.nerdwallet.com/blog/credit-cards/emv-credit-card...
http://www.chevronwithtechron.com/findastation.aspx
(There is a filter for "Mobile Pay" at the bottom)
You're not liable, but that doesn't mean it doesn't cost you anything to get it straightened out (time).
No it's not. I very much want there to be a way to spend money anonymously, but I can't frame that as a 'basic right'.
Isn't he? I don't know how it works in US, but at least in Poland every banknote has printed statement that it is "the legal payment method ". The law institutes a fine for any seller that refuses payment in cash.
Relevant statement from US Treasury: https://www.treasury.gov/resource-center/faqs/Currency/Pages...
Apparently Citibank stopped handling cash in Australia: http://www.businessinsider.com.au/citibank-is-the-first-aust... (not sure how that works out)
A coffee shop in Maryland stopped taking cash after several robberies https://consumerist.com/2017/02/03/sick-of-being-robbed-coff...
Salad chain Sweetgreen also stopped taking cash https://consumerist.com/2016/12/22/seeking-sweetgreen-salad-...
Also most landlords won't accept cash.
There's others, but that's just off the top of my head. I've been in card-only situations before.
It is not in the interest of a free, fair, and just society to give such an entity the power to tax and control transactions at their leisure.
If you want to engage in transactions without being tracked in a cashless society, you always have the option of using alternative currencies.
I do agree though, in Japan I'm seeing a lot of credit or phone based transactions , I almost never carry cash now.
Side note: my wallets last longer!
Those business owners are customer hostile and are worthy of neither my business nor anyone else's.
I find a lot of places may accept cards if you ask them, but they don't have card logo stickers anywhere or a prominent card reader.
That's when everything works correctly. What about when the power goes out and the card reading device stops working? What about transaction denials due to bank mistakes (or predatory policies)?
Having the option to pay with credit/etc is nice, but the failure modes can be nasty.
Fortunately, they only shut down my card. My wife's still worked, and we were able to proceed. It made for a more stressful vacation, though...
The systems can really trigger on random stuff too. After the last time when I gave them holy hell and threatened to pull my business, I haven't had trouble since. But before that, as someone who travels worldwide, I had transactions declined at 1.) a gas station convenience store and 2.) a grocery store in the Western US.
Second bank account is more important than second credit card, IMO. Being locked out of your cash is much worse than being locked out of your credit.
(1) technically they are brokerage accounts also, at least for Fidelity, but they hold your deposits in FDIC insured banks and are designed to be used for everyday spending, exactly the same as a checking account.
As a general principle I tend to agree. But, when traveling, having something that functions as a credit card can be pretty important. (Of course, if you have a healthy cash balance and a debit card, that works equally well.)
We had to cancel the BofA card that I had.
Fortunately our CapitalOne card used different numbers and we were able to keep traveling without a lot of hassle. For our next trip, we're going to make sure there's no number overlap.
That is: My wife and I have cards that have the same number on the front. On the back, though, the three-digit... I forget what it's called, but there's this additional number that is not embossed into the face of the card. Her card has a different one of those than mine does. And the bank can tell the difference, can tell which card made the purchase, and can shut down one but not the other.
So it doesn't matter if the two cards share the same main number, as long as the bank can tell them apart.
Does BofA give different three-digit extra numbers to their cards? Do they give the same extra numbers? Do they give extra numbers at all?
I think every card issued by Visa, Mastercard and American Express (at the very least) in the US has these extra numbers.
The failure mode on getting permission is really nasty.
Thinking about it, they really had some sh!+ software at that point since I only used the card at 4 gas stations with 1 in the Plymouth, MN and the other three on the I94 / I29 route.
1) after this I started following my Dad's policy of hiding $100 in the car for emergencies.
I've had a card that routinely has very large travel expenses in multiple countries turned down for a $20 gas purchase when traveling domestically.
I don't really get this. I use credit cards (almost entirely online), but I've never used a debit card. Not out of any deep-seated aversion, I just don't see the point.
If allowed, I will always disable them, and when not allowed, I will change banks to one that will allow it.
[0] http://www.nationwide.co.uk/products/current-accounts/our-cu...
My tinfoil-hatted side does wonder whether this is half the motivation of these new "convenient" debit mechanisms - like those fake "points" currencies used by various stores and in-app purchase schemes, I'm sure people spend more money when it doesn't feel like spending money.
Agree re credit cards, but I never carry a balance, they're just a payment mechanism.
[...]
> Agree re credit cards, but I never carry a balance, they're just a payment mechanism.
I think you just answered your own question.
For most people here (Holland), a credit card is not a 'default' (and so many people don't even have one). We still use our debit card all the time because it's so much more convenient as payment method than messing around with cash.
Over the past few years they've been rolling out contactless payment, which is even better. You see the amount of a screen, swipe your card, and only after x transactions or over a certain amount are you asked to use the chip and enter your PIN. I'm pretty sure most of these machines also allow you to use your phone (or watch) to pay for things, but that's not as common yet.
Or another example: one of the big supermarket chains here has been rolling out self-checkout kiosks at many of their stores, making the process even easier: take the stuff you want, scan it, swipe your card, and just walk away!
Maybe I'm just old, but I don't want payment to be too frictionless. Cash still strikes the right balance for me; convenient enough that I don't get annoyed by it, not so convenient that I lose track of what I'm spending.
I'm with you on the credit cards-- for me, they're just a point-generating mechanism-- but it's easy for me, since if I accidentally go over my budget, I have enough savings to easily cover it whenever that happens. For people who live more paycheck-to-paycheck, that can be devastating, and it's sometimes non-trivial to compute your safe-to-spend amount from a current credit card balance, expected expenses, and current bank balance.
- Free perks like rental car insurance and extended warranties
- You never have to worry about your bank account being cleared out
If you pay your bill this all comes for free. It's a pretty amazing deal actually.
Because if your credit card is used fraudulently, you tell the credit card company, they disallow the charges, and nothing comes out of your pocket.
If your debit card is used fraudulently, the money comes direct from your bank account, and you get to find out how much work it is to get that money back--and in the meantime, you don't have it.
https://www.nerdwallet.com/blog/credit-cards/credit-card-vs-...
I applaud businesses like this. The fact we slowly let a few giant private corporations enact a 1-3% fee against pratically the entire consumer economy would be ludicrous in any other situation.
Plus the privacy concerns just are not worth the convenience. Whenever possible I use cash, simply so I slow the day coming where I can't function in society without having my entire spending history out there for any agency to decide to take a look at.
A poor person, who can't (or shouldn't) use credit cards comes in to buy food. They now pay the full-price (already marked up 1-3%) -- essentially paying that as a "tax" that wealthier patrons, with good cash-back cards, get back later as a refund.
Well, if you look at it from a bigger picture, its actually good business to accept card. The reason being is, as I mentioned in another comment, people spend more when they use card than if they use cash. So you may have to pay a 3% fee to the CC companies but you may get 6%+ more business. Especially in the restaurant/bar industry. The last thing you want to do is allow your customers to feel "pain" when they order that third or forth drink (pain being their wallet getting physically thinner)
There's also costs to handling/processing large amounts of cash, it's not "free."
There's also just been this psychological shift that makes it generally OK in most places to put that $3 salad on a credit card. I'd never have done that 10 years ago. Now I routinely charge my lunch or a cup of coffee.
I don't know how much of this is changes to credit card fee structures and how much is that it's just become a cost of doing business many merchants now feel they have to put up with.
In theory, our interchange fees were reduced, but from what I saw it just resulted in most decent cashback schemes disappearing. This seems to have resulted in issuers making the same margin as they no longer pay out a part of it to the customer.
And I don't believe in the legal system enough to think that the information is not shared.
Also, cash is one of society safety net. You see, nothing is black and white, and society is not perfect. If it can control everything, then the citizen has no margin, no grey zone to try things that the current society consider wrong.
And this is a problem, because you can't make society evolve if you can't try what you want to change for first.
Cash let a small part of society locally try things that are not (currently considered) right. Without it, you would soon have a static society.
Another problem is that, because society is imperfect, it will create rules that in certain situation are bad for the people. Without a way to bypass the system at a local level, you are at the mercy of errors (not even talking about evil doing), with no short term solution.
Without cash, if visa or bank x doesn't like you, you are screwed. Without cash, if you are doing something moral but illegal, you are screwed. Without cash, if you are doing something that society consider immoral (ex: going to a gay bar in a repressive country), you are screwed.
Yes cash is abused, but a life without cash eventually would derive to something way worse : a rigid society.
Because he have your money, he own you.
What is unsettling is that governments could create a digital payments system that didn't depend on any single authority. This would be convenient enough that I can't imagine it not gaining the entire market (even from cash), and making this move much more palatable. This would be a much easier way for govs to get their so desired universal surveillance. Yet none is doing that. Why?
To make it clear, I don't think it's an entirely good thing, but it would be a much easier path to the kind of surveillance they want to create.
And I'd much rather be taxed by my government than by the shareholders of my bank.
I would only be fine with cashless if the power inherent in the system were diffused, such that no single entity could exercise significant control over it, and if it were supported by laws, such that attempting a 51% attack (perhaps by merger or secret collusion) would get those responsible thrown in PMitA prison for their dire felonies.
You let the Fed control it, and they'll just use it to print money, much like they do now with paper money and bank deposits. For some, that may be a beneficial feature, but I think the power to control the size of the money supply is simply too dangerous for any one group to wield it unchecked. And I think the Fed's ongoing policy of targeting a positive rate of inflation has harmed the whole US-dollar economy to a greater extent than the problems that are hypothesized to have been avoided by it.
You put one nexus of control on the whole money supply, and that's where all the crooks will go to get their scores. Bitcoin had the right idea in trying to solve the Byzantine Generals problem, because I don't trust any big financial institution to handle money alone, but I do trust them all to distrust one another enough to gang up against anyone that tries to pull off a coup.
"The cashless society – which more accurately should be called the bank-payments society" Due to this sentence I'm forced to believe the author has literally never heard of bitcoin, which seems impossible
I'll have to think about this, do I value the plane trips so much that I'm willing to compromise on my values regarding privacy?
I'm also going to look into blockchain currencies like Bitcoin to see what potential currencies would guarantee my privacy.
Of course I know I'm subjecting myself to tracking which is somewhat scary but I guess the convenience has outweighed that for me.
The store passes the cost right back to you, the consumer, in the form of higher prices. You didn't just think they absorbed the cost out of the goodness of their hearts, did you?
You can negotiate price with cash.
The payment card industry is a parasite on all of us, full stop.
Hiring those armoured vans to move it around, loss by theft or error by staff, time spent counting money, making cash deposits or withdrawals from the bank, and perhaps higher insurance.
Whether those costs are more or less than cash presumably varies. A public transport operator seems the obvious case where cash costs are high.
The EU capped fees at 0.2% for debit card transactions, and 0.3% for credit cards. I'd guess that makes them very competitive with cash -- the discount German supermarkets, well-known previously for only accepting cash, started to take cards. It also led to the demise of cashback credit cards, but I'm not sorry to see them go.
In the last 3-4 years, I've been surprised a few times when small businesses (plumber, street food seller, dry cleaner) have preferred a card.
[1] http://ec.europa.eu/competition/sectors/financial_services/d...
I'm not saying this is in the interest of either retailers, banks or credit card companies - but it should at least be possible in theory to improve on the status quo e.g by regulation.
The best solution imho would simply be a credit card you can "charge" with plastic cash from your bank account, instead of going to the ATM. The amount stored on the card is then used like cash and then it's re-charged from the account when it's empty.
All the cc company sees is the charging withdrawals and the retailer doesn't see any credit card information as the transaction is made with "cash".
I have seen attempts at this (e.g in Sweden 10-15 years ago) but none successful unfortunately.
[1]: https://abine.com
http://money.cnn.com/2013/05/13/technology/square-guns/index...
https://www.theatlantic.com/business/archive/2012/11/-100-bi...
The only other instance is pharmaceuticals, that industry being "for profit" is nothing but bad news.
The real reason of the move to cashless is taxes and the fact that governments everywhere borrow without intending to ever pay back. When the shit hits the fan, the payment will come out of your and others' bank accounts.
This raises a question in my mind which probably shows my ignorance of finance more than anything, but here goes:
Why not just have a public system of electronic transactions?
What I mean is, the current system of electronic transactions feels to me a lot like the way things were back in Ye Olden Days with cash. Cash didn't start out as state money, it started out as private money -- notes issued by individual banks, promising to pay the recipient in coin or specie on behalf of the bearer. (Which is why paper money is still referred to in some places as "bank notes.")
Which was fine for a long time, but as commerce got bigger and more widely distributed, it reached a point where it didn't scale anymore. Every note was only as dependable as the bank it was drawn on, and the farther away the transaction was from that bank the harder that reliability was to evaluate -- uncertainty which added risk to transactions. So governments started removing that uncertainty by organizing central banks and issuing their own notes, which became the paper currency we all know today.
Fast forward to now. We have modern cash, which has all the virtues the article cites; and we have a separate system of online payments which lacks those virtues, run by private companies who take a non-trivial piece of every transaction for themselves. Those drawbacks weren't too important when electronic payments were a new thing, because it wasn't clear then that they would ever be more than a niche product for the convenience of rich people. But now they're everywhere, and it seems inevitable that at some point they'll become the universal method of payment.
So why not do like we did with bank notes and cut out the middleman? Why not have electronic payments systems operated by governments, in the same way that they print currency? It seems like it could solve a lot the of problems with a cashless society at a stroke, and help the economy to boot by returning the percentage of each transaction that used to go to the banks back to productive circulation.
(The cynical part of me says that the reason is because the middlemen in this case are banks, and in the modern world banks tell governments what to do rather than the other way around.)
Also, the "final" clearing system for electronic transactions is public. In the US, it's called Fedwire, which is operated by the Federal Reserve which, despite various paranoid ramblings, is a public institution. The problem is, only reserve banks are allowed to have accounts with the central bank, which makes the system appear private. It's even trickier with credit cards, where you're basically asking a credit provider for a loan every time you swipe.
So maybe the better question is, why isn't there a national depository bank of the United States? And then you can advance whatever answer you want for that one.
https://news.ycombinator.com/item?id=9947219 (1.5 yrs ago)
You feel the pain if you don't have a local bank account and therefor cannot use the WeChat wallet. So you cannot hail a Taxi with Didi, you have to do it the old way by waving the hand. It's already really a pain, if you don't look like a local but being a visitor from the west. I heard there are restaurants that accept no cash anymore. It's also not so great that bank debit cards now have some regional lock, you have to deactivate it before you travel abroad, otherwise you cannot use ATMs there. Been there, learned it the hard way, good I had 300 USD in cash with me to survive 3 days until the debit card region locked got processed around the globe to enable ATM cash deposit. Let's hope current kind of paper cash stays around and will be a legal and common payment method for a long time to come.
For example, on my campus, the vast majority of all cash transactions, from what I've experienced, are to buy illegal drugs or to illegally obtain alcohol. The rest of the transactions are with dining services and with clubs. Because dining services has to keep so much cash on hand, they are a major target for crime; they need to hire more expensive managers to count it, they need to have more cameras and security staff to monitor it, and they need to hire armored guards to carry it off to the bank. In the past front line employees have been shot in armed robberies, so yes, the many safety mechanisms are necessary.
What incentive does anyone in this story have to keep using physical cash? It is crazy insecure, dangerous, inconvenient, and used often for illegal things. The criminals (who are more than you'd think; who do you know who hasn't broken at law at least once or twice?) have an incentive to keep cash around. That is legitimate, but as a society, a better approach would be to rewrite our laws to better capture the realities of human behavior and serve the community interest. When people are routinely getting away with things (drinking, smoking, etc.) it is probably time to make them legal and grant those people the full protections of the law and the monetary system - including non-physical value.
I own a legitimate, legal business. Half my revenues come in as cash.
It is crazy insecure, dangerous, inconvenient, and used often for illegal things.
If you don't like it, don't use it. But don't take my right to use it away.
Your post reeks of inexperience.
Some of that is simplified by just having a jar of cash with limited options for opaque gaming.
In fact, trying to pay cash can cause problems -- so many people use the electronic methods, the doorman might not have any change. (This is often the case at the weird gigs I go to, where only 25 people attend anyway, and it barely breaks even for the promoter).
I've heard of a trial to donate money to the homeless using a card, but it was only a trial. It's not normal to tip in a restaurant (or anywhere else).
However, the post spoke of having to buy illegal alcohol at college, so the person is clearly in America. But there are always queues at the cash machines near Christiania in Copenhagen, where everyone goes to buy weed. That's the only remaining thing Danes use cash for...
Um, what? It's still normal and people do tip at resturants in Sweden. To be fair, neither you or I have any numbers to back it up and have to chalk it up to experience/intuition.
I thought I'd finally got a clear answer (no tip) but evidently not.
https://www.theguardian.com/business/2016/jun/04/sweden-cash...
EDIT - looking at the date of the article it might have been not the same, but a similar one.
Sweden does seem to be this cashless outlier for some reason. [EDIT: I gather it's a Nordics thing more generally.] I think it was also featured in a Freakonomics episode fairly recently.
Depends on your definition of plastic. Debit cards are common here. Europeans tend not to use credit cards as much as Americans though; they are mostly used just for travelling or (international) internet purchases.
That is a very coarse and completely unfounded statement. The situation differs greatly per country; you can spend months without touching cash in the Netherlands or Sweden. In the Netherlands we've passed the 50% mark for electronic debit card payments at a point of sale a decade ago!
Online purchases are soaring too across the continent, which means that for clothes and electronics there is a shift towards less and less cash transactions each day.
I know maybe a handful of people except myself under 50 who still use cash for anything, ever. They tend to also have Thinkpads and GPG keys.
probably because netherlands and sweden make up only 4% of europes population and the other countries are slower at adopting it.
Oh, by the way, one of these countries is Germany.
You wrote this without an ounce of introspection, not thinking about what we classify as "crime" nowadays and how much are entirely victimless activities.
If all you can think of for things "people don't want tracked" is "crime" I don't think you've thought about the problem set very long.
It's incredibly damaging to never have "things be in the past". One thing experience has taught us is that any electronic records generated will be kept indefinitely regardless of policy or law.
I just don't understand folks who seem to be completely ok with any agency remotely curious in you being able to re-construct your entire spending history over your life. You might just be so boring you can't imagine hiding anything, but I think you're in the minority.
This is also ignoring the additional transaction taxes private institutions put upon the entire consumer economy. All this so you can maybe do away with some crime (I just think payments will transition and simply cost more) for what amounts to convenience and security. As with all things, I think making that trade ends in long-term ruin.
You must live in a bubble then. I live in a beach town where there are many small restaurants, souvenir stores etc. that only take cash. (It's not a problem for the tourists because there are many ATMs). Once you leave your bubble there are also farm stands, yard sales and so on.