In Germany, the use of cash has become a proxy for concerns about trust, privacy
bloomberg.com
bloomberg.com
German retailers have "discount cards", which give you a little off in return for the ability to use your data.
If you pay with a card, they don't need to do that, they already have your info, what you bought, when etc.
No thanks, I want my relationship with shops to be simple: I give you money, you give me product.
And of course cash has the added benefit of being tangible. It's in your wallet, then it's not. Spending more means taking out more bills, or bigger bills.
What a concept. I refuse to use the card system for public transportation in my town because they will only give you a card in exchange for your personal data. I find it deplorable.
[0] https://tfl.gov.uk/info-for/media/press-releases/2017/septem...
Of course with enough transportation usage data (+ maybe additional external data) the identity can be reconstructed in a lot of cases, but the same entity already collecting PII does indeed sound problematic.
Oh, so the exact same reason Facebook tracks you. Except, of course, that it's relatively easy to not use Facebook, but it's a real, substantial cost to not use public transport in your city (or only using single journey cash tickets).
You can recover lost cards without collecting personal data, by the way.
“I bought a doughnut and they gave me a receipt for the doughtnut... I don't need a receipt for the doughnut. I give you money and you give me the doughnut, end of transaction. We don't need to bring ink and paper into this. I can't imagine a scenario that I would have to prove that I bought a doughnut. To some skeptical friend, 'Don't even act like I didn't get that doughnut, I've got the documentation right here... It's in my file at home. ...Under "D".'
Really funny when you think about how this joke aged in this era of rampant privacy abuse.
Still I get your point, but there are times I'd want a receipt.
I don't see how the receipt is proof that the store isn't evading taxes - someone would need to collect them all and compare them to their tax filings.
Well, if you go to sit down and then an employee accuses you of not buying anything (or of stealing something, or whatever) and threatens to call the cops.
I'm not being facetious, and it's not just the recent news; a lot of people have been trained to keep receipts at establishments for this exact reason.
Example:
- cashier says you owe $X
- you pay in cash
- cashier gives you receipt
- after you leave, cashier voids the transaction & pockets the cash
There are plenty of ways the cashier can get caught, but catching then be a non-trivial exercise. It depends on the products being sold, quality of systems to prevent fraud, etc.
I've been banging my head against the table since moving to Germany about the lack of convenience with cash payments and the need to constantly visit the ATM. Yet the economy is doing just fine.
At least they have their money purses in restaurants and give you change in an instant instead of fumbling it like in other places. They are as efficient as cash allows it to be.
(And most places that cards only take German cards)
Incidentally when I lived in Berlin I used to only use cash and I never found it a bother. My bank had ATMs in many places and it really wasn't very hard to keep cash around. I've always found it a little odd when people talk about ATMs as being inconvenient when historically they're probably as convenient as they've ever been. Of course it is always easier not to have to go to an ATM, but today it really isn't that hard unless you have some tiny ATM network.
Regardless, having both cash and cashless is definitely the best of both worlds. Convenience, redundancy, autonomy. I wish people would stop unnecessarily view the two methods as incompatible when they complement each other so well.
It's the same in Denmark. The payment processing networks are really stable, just not stable enough to eliminate or not always carry enough cash to pay for groceries.
When payment processing have 100% uptime for five years, then maybe we can debate eliminating cash in some places.
I'd be interested to see any data collected regarding this; whether or not armed robbery against things like restaurants and grocery stores has decreased after the move to cashless.
And if you have "the need to constantly visit the ATM", then perhaps it would be a good idea to withdraw more money to last you longer? My bank actually doesn't allow withdrawals of less than 50 Euros, but even before that was introduced I simply withdrew the money I needed for a month at the beginning of a month -- and that was it.
[1] http://www.faz.net/aktuell/finanzen/meine-finanzen/geld-ausg... (German)
Well:
- instead of just going to a shop, I now need to go to a bank, and then to a shop - I mean that's pretty obviously and undeniably less convenient for a start
- I have to carry a lot of little bits of valuable paper around with me - enough for an entire month of expenses in your opinion!
- when I pay I have to wait for them to count the money, gather up the change, return the change, which I then have to count, compared to just tapping my card and going
- I get no protections such as insurance for my purchases
I can't how understand how anyone can argue cash is more convenient!
And how can you possibly argue cash is faster? Paying by card takes 0.5 seconds - I don't have to even look at what I'm doing I just wave my card and go.
Your articles talks about arcane things like inserting your card, paper printouts, signing with a pen - you haven't needed to do that with cards for a decade or more.
Hmmm...if you go to a bank to withdraw cash every tine you go to a shop I could see your point, but I would suggest that "you're holding it wrong".
> I have to carry a lot of little bits of valuable paper around with me
Which are limited in terms of risk, whereas a card can withdraw...whatever your limit. Carrying the bits of paper (and coins) has the big benefit of being tangible, that is we get to use all our senses to understand something otherwise very abstract.
> when I pay I have to wait [..]
Err...sorry, cash transactions are invariably much quicker than card transactions around here.
> I get no protections such as insurance
You mean you don't have ridiculous services bundled together for no reason whatsoever.
> I can't how understand how anyone can argue cash is more convenient!
And I can't understand how anyone can argue that cards are more convenient, when they clearly are not.
>And how can you possibly argue cash is faster? Paying by card takes 0.5 seconds -
Where? Around here, card transactions always take longer.
> arcane things like inserting your card, paper printouts, signing with a pen [..] decade or more.
Actually, having to sign on EC payments has become a thing recently, it used to be exclusively PIN. And sometimes it's PIN, sometimes it's signature, in the same shop, with the same card. They payment processor seems to choose by some randomized algorithm.
> whereas a card can withdraw...whatever your limit
That's not my liability - it's the card company's. As long as I'm not negligent, like giving someone my PIN, I am not liable for someone stealing my card and using it. I don't lose anything.
I'm strictly liable for less value with card than cash.
> Where? Around here, card transactions always take longer.
How does it manage to take longer? Don't you have contactless in Germany? If you don't, then that's the problem - not the cards themselves.
The last point seems debatable given Germany's backward card infrastructure, but for liability and number of places I have to visit, it just seems a mathematical fact that cards are more convenient.
Only by 1/N. And since there are ATMs near my shops and it's mostly about trips, not about # of shops, it's both negligible and certainly well worth it for the benefits. And if that epsilon of effort is too much for you, you can get cash-back at most grocery shops, though the amount will typically be smaller, one reason I prefer the bank ATM.
> That's not my liability - it's the card company's
Not around here it ain't. And of course if the card company "takes on" the liability, it just redistributes it to its customers. So you are paying for it.
> Don't you have contactless in Germany?
Rarely if at all. Also I don't see how contactless (you just swipe? No PIN?) manages security.
So: tangibility, security and data protection are clear benefits. Convenience as well around here, and can only be improved by making the entire thing less secure.
We had a card-provider sponsored big-bang on contactless payments years ago in the UK and it's been an epiphany. Life is so much better cashless.
No, for us, the value proposition is just not there. The benefits are at best highly marginal and the disadvantages profound, if less visible.
> card-provider sponsored big-bang
Hmmm...and they did this out of the goodness of their hearts?
Cards were introduced in order to get you to spend more, in particular money you don't have, which is why it started with credit cards.
Making a payment by card is essentially the same, whether it's € 1 or € 100, or even € 1000. With cash, there's a bit of a pause as you count out the bills. And you notice it much more when prices go up. etc.
And of course the whole brouhaha about anonymous digital currencies. Huh? More technology to fix problems with technology? How about we use this really old technology that already has all these benefits.
You don’t see the value because you don’t know what’s possible. For example you asked if you ‘swipe’ a ‘contactless’ card so you must not know what other countries’ cards can do. (You don’t swipe it - that’s the whole point - it’s without contact - contactless.)
> Hmmm...and they did this out of the goodness of their hearts?
No they benefitted but so did we - not everything is a zero sum game and sometimes everyone can work together for society make progress but someone needs to nudge.
You still have to hit the NFC coil by a few millimeters, it's a pretty comparable motion and effort.
And it takes longer than it takes an Aldi cashier to give out change.
In places that don't have contactless payments, cashless may be less convenient but contactless is probably on its way there so your argument seems like a bit of a straw man. At any rate, I'm sure it can be agreed that contactless cashless payments are more convenient that cash ones.
Cards also have a dispute process.
> much quicker than card transactions around here
That's because German vendors are hopeless at processing cards.
Australia/HK/Singapore/China/most of Europe: the reader prompts you with the sale amount. You tap your card. It adds zero time to the transaction.
Germany: the vendor asks to hold the card. They insert the card. They ask the terminal to do a credit transaction. They give the reader back to you for the PIN. You hand it back. They ask for your ID because you're a foreigner. Blah blah blah.
> having to sign on EC payments has become a thing recently
So you're actively going backwards, then?
I'm also going to point out three other annoyances with the German banking system:
- Cash machines are rare (kilometres apart)
- To avoid fees, you have to use machines in your network
- The fees on out-of-network withdrawals are huge (3-5 EUR, but apparently unrestricted; I paid 10 EUR for a temporary ATM at an event once).
So you carry a lot of cash.
Define "a lot". But yes, I usually have a week or two supply. Why on earth would I not?
> You tap your card.
As asked elsewhere: how is this secure?
It's more secure than your two weeks' worth of untraceable cash that you're lumping around everywhere.
If you lose your card you cancel it. I can do this on my phone in 30s flat when I notice it's gone. Things bought in the mean time are covered by the card provider, and they prosecute the criminal to get the money back.
If you lose your two weeks' supply of cash what do you do?
Nope. If my cash is gone, that's all that's gone. With a card, you can do a lot more damage.
Cash also doesn't get denied for random/unpredictable reasons when you are abroad.
> 30s flat when I notice it's gone.
Coordinated gangs will clear out your bank accounts faster than that.
If I lose my cash, that's it. I don't have to cancel anything, I don't have to reapply for anything. I can borrow cash, or loan out some cash. Easy peasy.
Contactless is a solution looking for a problem.
But a credit card doesn’t give access to a bank account - it’s a credit line.
If someone except me uses that credit line then the purchase is taken off my credit line in minutes.
Well, that's another whole can of worms.
Virtually no retailer in Germany accepts credit cards because the fees are too high and price competition in Germany is pretty brutal (just for reference: Walmart, which steamrollered US retail had to retreat from the German market, in part because they simply couldn't compete).
So you are paying for these services, and yes, cost of living is higher in the UK, for example:
https://www.numbeo.com/cost-of-living/compare_countries_resu...
Oh, and the terms imposed on retailers by credit card companies are pretty brutal, too. For example, they push most of the risk of fraud onto the retailer. If you think that doesn't matter: KAGI went out of business due to fraud.
https://tidbits.com/2016/08/04/kagi-shuts-down-after-falling...
So what's happening when the purchase is "taken off" your credit line is that the retailer gets hit, doubly, meaning they have to raise prices on everyone to stay in business (see higher cost of living above) or they go out of business (see KAGI example). German retailers don't want this and German consumers don't want this either.
And of course the credit card companies have managed to create a tax on the entire economy, essentially a rent-seeking/parasitic business model, while pushing all the cost and risk onto others (the general public and the retailers). Now if I were a credit card company, I'd be all "Yay!". As a consumer or a provider of products and services...not so much.
And again, the convenience, while shiny and cool, is at best trivial, and I would say offset by other conveniences such as haptic processing, fungibility, loanability ("Quick, can you loan me €50?", "Er, here's my card?").
And there is significant added complexity in the system, which can fail fairly dramatically. For example, when I was in living in the UK my UK card would not work just about every time I went abroad. "Fraud protection". Hah. I've had that happen a lot more than I ever had cash lost or stolen, and the consequences are more severe. The bank suggested I should contact them every time I went abroad. Excuse me? I need to ask my bank for permission to travel?
That's one thing that's also a very important lesson for software, particularly performance: in almost all cases, resilience is more important than (peak) performance. You really want to strive to avoid bad outcomes, not make the already good outcomes a few percent better. This is harder, but more worthwhile.
And of course the point of credit cards is to get you to spend money you don't have, which is also why eliminating that haptic feedback of money leaving your wallet was and is so important. And surprise, surprise, credit card debt is (shockingly) high at least in the US and the UK.
So don't get me started on credit cards :-)
Everywhere will accept a credit card, they're just slow about it.
Now that I've left ? Rarely have more than 10 euros in my pocket, can take 20 euros at ATM and not give a shit about fees. I can pay with my card everywhere.
In Germany, that's very difficult, the courts generally assume that the chip+PIN system is safe.
And of course, you don't actually think that you are not paying for card fraud, do you? You just pay for it in the fees the card companies charge.
https://www.numbeo.com/cost-of-living/compare_countries_resu...
>Australia/HK/Singapore/China/most of Europe: the reader prompts you with the sale amount. You tap your card. It adds zero time to the transaction.
Outside of department stores and similar, using a card is very inconvenient in China. Depending on the place, you need cash or Alipay/WeChat.
No more wondering if an ATM is part of your network and end up with outrageous fees. I see an ATM, any ATM, I can use it to withdraw cash, simple as that.
Surely retaining your privacy includes being able to choose freely who you do business with?
I could not agree more with the process you described every time I pay with a card in Germany. Germans point to this inefficient process for the reason cash is faster.
However, when I lived in the US, Australia, and NZ you literally tap your card with paywave and the transaction is complete. It is impossible for a cash transaction to be faster than this.
Regarding the speed of transactions: cash might be faster than signature or even Chip+PIN, but is surely not faster than contactless.
For example, anyone with a contactless Visa/Mastercard or phone can enter the London Underground by simply tapping at the barrier. They do not need to have a pre-existing relationship with Transport for London, to buy a ticket in advance, or to preload a stored-value card (as you generally must do in other city transport networks). And the ticket barriers open on average in 480ms. [1] That's pretty fast. You can't even pay by cash on a bus in London any more.
[1] https://www.whatdotheyknow.com/request/payment_methods_time_...
In Berlin, there is no barrier.
It is true that there is no barrier in Berlin, but you still need to buy a ticket. For casual users such as myself, who don't have a season ticket, this takes significantly longer than 480ms: find ticket machine, queue, navigate menu, insert cash, wait for change and ticket to be printed, find ticket validation machine.
It is quite possible to miss the train here by having to queue to buy a ticket, particularly in busy places like the airport. This could be avoided if the tourists were able to use their existing cards/phones to tap in.
This is a much bigger deal than a lot of people will admit. It's a lot easier to waste your money without a second thought when you're using a card. It's similar to chips in vegas - you're much quicker to gamble the chips than you would have been with cash.
It's not as big of a deal if you're really responsible financially, but if you're the kind of person who binge-shops amazon then going cash-only for a few months might be an eye-opening experience.
Contactless payments - no thank you, I like to have some control over my cash flows.
The mix of both is by far the best - have cash when you need it, have a card when you need it. Why can't people understand that not everybody thinks/behaves/lives same as they do?
- The smaller amounts (equivalent of a more or less dollar) are coins, not banknotes. They make your wallet way bulkier.
- When paying with a bank note straight out of an ATM (usually a 100 PLN note), the clerk will usually ask you for a smaller note, and sometimes refuse to do the sale, as he has no change. Other times, he'll take your hundred, but with an eye roll.
Meanwhile, contactless card transactions take under 10 seconds and work pretty much always.
On my way to work, before I get to the subway station, I pass no less than three banks with ATMs where I can withdraw money. You can even withdraw money in supermarkets without fees if you spend a certain amount of money.
> I have to carry a lot of little bits of valuable paper around with me - enough for an entire month of expenses in your opinion!
Possibly. I never said you have to carry around all of it at any given time. But I'd think that it's pretty much expected that you always have cash in your wallet in Germany.
> when I pay I have to wait for them to count the money, gather up the change, return the change, which I then have to count, compared to just tapping my card and going
That takes...a few seconds? How is that an issue?
> I get no protections such as insurance for my purchases
Protection from what exactly? Insurance for my groceries?
> I can't how understand how anyone can argue cash is more convenient!
In Germany it is. That's a simple fact.
> And how can you possibly argue cash is faster? Paying by card takes 0.5 seconds - I don't have to even look at what I'm doing I just wave my card and go.
Yes, contactless payment is also possible in Germany, depending on the stores and whether you have the right card. But the way it's implemented here doesn't make it that much faster in the end.
> Your articles talks about arcane things like inserting your card, paper printouts, signing with a pen - you haven't needed to do that with cards for a decade or more.
Oh, I guarantee you, it's not arcane at all in Germany, it's used every day.
https://www.google.com/search?q=credit+card+price+match
Beyond that, making a purchase of an electronic device with a credit card can extend your warranty.
Don't know if that applies to Germany, it may apply to where ever the person you are replying lives.
Cashiers handling cash are a liability because they can steal and make mistakes more easily than a computer system, so paranoid business owners can reduce that particular risk.
Based on the date of the article, I assume this mostly precludes contactless payment. As a personal anecdote, a salad place I know in Berlin recently switched over to card-only and they specifically encourage and educate people to make use of the contactless payment feature thats enable in most debit/credit cards Germans have. They went from unmanageable long queues that made eating there a chore to almost no queues and one of the fastest ways to pick up food via that single change.
I thought it was just me. On Chrome the site kept on reloading as soon as I scrolled down. Managed to bypass that behavior by hitting the "cancel refresh" button as soon as I scrolled down.
Still, a weird thing to happen, this morning Twitter had a pretty similar issue with their GDPR message: It would keep on reloading and reloading, making the whole thing unusable, until you manually told the browser to stop reloading.
This behavior persists with or without adblocker active, did GDPR break the Internet?
That really depends on the type of cashless payment you are using. EC payment usually takes longer because it involves the process of preparing the reader, having the customer put in his card, wait till the reader is ready, input pin, wait again, done.
But I've also seen contactless card payment with Visa/Mastercard that didn't require any PIN entry/signature, those are surprisingly fast.
A cashless bakery opened up here recently, and it was a big enough deal to make several newspapers.
I only have anecdotal evidence (but to be fair I didn't see any evidence in the article either that this cash-focus in Germany is really based on privacy/trust issues) but I have never heard anyone use cash for privacy/trust reasons.
You're looked at funny if you want to pay small amounts by card here.
Part of the reason I think where historically high costs attached to credit card payments but the girocard system has been pretty cheap all along. Another issue I see is that it sometimes takes ages for the machines to do their thing.
I've been wondering for a while what the reason could be when using PINs. When I lived in Switzerland I remember things working like this at a supermarket: 1) You put all your stuff on the belt at the register 2) While your stuff is being scanned you can already put your card in the machine, enter your PIN and press okay once 3) When everything's scanned you only have to press ok again and the transaction is finished
In Germany it's different. You first have to wait for the whole scanning/entering into the register process to be finished before you can even put your card in the machine.
Hoping contactless payment will make this easier.
I know quite some in Germany (and see myself among them). "Ironically" I observe that the people who are most vocally privacy-minded (also concerning cash) - at least in my cicrcle - often have studied computer science (or a related subject) or are at least very interested in computer science topics, while the people who argue very vocally that paying via credit card/NFC/... is so much more convenient are not the kind of people who are very interested in computer science topics.
They are usually also among those folks who don't think anybody would be interested in their data along the lines of "What are they even gonna do with it? Why should I care" firmly belonging to the "Nothing to hide, so I got nothing to fear" camp.
Only a few people state this as their main reason, but it's an added benefit and one that's weighted more heavily as time goes on. When I do my grocery shopping I will always get cash to pay for it, also makes it easier to keep costs in check.
Also one huge issue with girocards before this change was, that the cashier first had to press a button to enable the terminal for cards and if you had out inserted already you would have to take it out and in again. That was super awkward every time
65+: 58 % (66 %)
55 to 64: 48 % (64 %)
45 to 54: 46 % (52 %)
35 to 44: 38 % (50 %)
25 to 34: 44 % (55 %)
18 to 24: 44 % (69 %)
[1] https://www.bundesbank.de/Redaktion/DE/Downloads/Veroeffentl...
Traditional direct debit payment takes around 20 seconds or so.
An experienced cashier is much faster in giving you your change if you pay cash.
There is a newish "instant" payment with NFC chips, that doesn't require a PIN or a signature if you pay less than 20 €. It's much faster (maybe 5 seconds?), but it's not available everywhere yet. Certainly not at shops where you typically only spend small amounts (bakery, small Asian fast-food places etc.).
When not paying contactless (which takes less than 5 seconds like you mentioned), paying by debit card takes 6 seconds: enter card, mash 4 number PIN, push OK. And after that 0 seconds spent on change, fumbling with bills and coins etc.
What I noticed in Germany though, is that many store clerks insist on taking your card, then putting it in the machine, handing it to you, then take it back from you when you’ve entered the PIN. Yes, if you do it 1920’s style then it takes longer than a cash transaction...
Yes, unfortunately. I don't know if many shops have shitty Internet connection (sometimes the card reader even displays "ISDN dialup" in the status field) and/or the online clearing takes so long, but it really is annoyingly slow most of the time.
That's a service. You'd be surprised how many people are unable to insert the card into the reader correctly.
It's a lesson that I wish the rest of the world had had as well.
The Stasi (state security service) also spied a lot on the citizens. Do not forget that the GDR only ceased to exist in 1990.
Often, you even have to provide proof from a landlord that you do live there.
The German obsession with privacy has a LOT to do with making life difficult for tech companies, rather than the privacy of its citizens per say.
>Often, you even have to provide proof from a landlord that you do live there.
You left out the part where persons wishing to access those government records need to provide justification, a fee, and the access gets logged. Unfortunately, government employees accessing those records aren't as tightly regulated (although it's gotten better, iirc).
So no, it has nothing to do with some intention of 'making life difficult for tech companies'.
At the same time, though, you might see the problem of having the government collect data on religion (even if safeguards are in place today).
Tomorrow the AfD might be in power, and they might use that data for purposes beyond those envisioned today.
More broadly, I feel, while great to restrict tech companies, there are also very real dangers from the state collecting data.
Some people actually care about their information and who has it more than convenience. Maybe they don't trust corporations and assume their interests don't align. It wouldn't be bad assumption at this point. It's pretty obvious most tech companies value profit over anything else.
The GDR with it's Stasi also didn't really make a great case for "Trust your government, give them all your data!"
That's why a lot of Germans are very careful about private information, we've seen it abused at large scale, with inhumane results, not just once but twice.
ATMs could OCR and log the serial numbers of bills they dispense, and they obviously know who they're dispensing to. Banks could do the same with incoming cash at the end of the business day.
The tracking would be weaker than with electronic payments since some notes will be re-used after being given as change, but it'd still be useful to a government that wants to track its population.
The banknote recovered was passed to the Bank of England, who were asked to trace where it was issued.
Detectives learnt it had been sent from its printing works to the Leeds branch of the Bank of England, just a few days before the murder.
https://www.manchestereveningnews.co.uk/news/greater-manches...
Most paper money has a serial number that could be tracked for following the chain-of-possession for that piece of paper.
In the case of Germany I can see a law being written that would require serial numbers be recorded for person-to-person cash exchange. Those guys love regulation. :)
Indeed this is an issue that bothers me since some years. We should indeed think about ways to "reanonymize" the cash (even) more.
Lot's of bars/beer gardens/shops can't take cards.
German banks seem to use their own system called EC card which is not usable anywhere else in the world.
You can't use an EC card to buy stuff online you have to make a bank transfer.
What other major payment systems are missing?
But yeah, you need cash in Germany!
With Euro cash you can pay in most of these countries (in my experience in cases of emergency it even should be possible to pay with Euro cash in UK, Switzerland and Sweden).
Are you talking about niche cards like Amex?
My Visa was widely accepted in Germany, except at places that don't take cards at all. (Kebab stand, bar, etc)
All EC cards issued by German banks are co-branded, it used to be only Maestro, nowadays mostly V-pay. They do work fine abroad. (V-pay a bit less so than Maestro, but that's not a bug, that's a feature, skimming is a big issue in big German cities, that's why a lot of banks switched to V-pay)
Thats simply not true. Its at least usable in the Netherlands, Belgium, Spain and the Czech republic. These are at least the locations I've travelled to recently and used a Card like that. The only problem I had with it were obnoxiuos fees.
That's wrong. EC (Maestro) is part of the Cirrus network and works world wide for cash withdrawels. Other debit cards are aligned with the Plus network. Same thing.
Which is good, because due to that the fees of German EC cards are significantly lower than those of the rest of the Cirrus system cards.
EC is the actual old name, it stands for EuroCheque which was the unified European payment method long before credit cards or even electronic payment existed. Eurocheques were accepted as cash up to a certain max value, much like TravellerCheques, except that it was just standard and pretty much everyone had access to them. Later, debit cards were added with much the same guarantee. Nobody had a use for credit cards, so they never really took hold.
I suspect this allows many small businesses in Germany to simply under declare their income, along with avoiding the fees to the card companies.
Also, it's not clear to me - do they count debit transactions as "cash"? IIRC you could go to a supermarket and use a card but those may have been debit - it's hard to tell with chip and pin.
I think a lot of people in America do the same thing - withdraw cash for bars, coffees, etc rather than swipe a credit card for every little thing.
It also seems to mention but downplay the part history plays here; Every german has friend or family with stories about the abuse of power in east germany (and older ones in Nazi germany as well).
It's a question of "when", not "if" centrally controlled electronic cash will be abused - precedents already exist - and the collective German memory is still too strong to ignore the implications (the way the rest of the western world evidently does ignore).
There's the real estate sales tax that's a percentage of the sale. You're also required to have a notary set up the whole procedure (to make sure that everybody gets precisely what was agreed upon, or to initiate a rollback - there's about 0 chance that somebody goes out of the transaction without getting what is theirs) who is on the hook for making sure that everything fits together.
So yes its privacy but not in the way the article talks about.
Actually I also distrust systems where you need to verify your card payments at the end of the month.
I agree that social trust is very high in Switzerland, but I don't know if it's that high (at least, I've never seen someone pay over here with a business card).
So, I suppose this is not so much about privacy at all but rather about laziness or stubbornness.
My grandparents grew up post WWI in the Weimar Republic and then lived through WWII, had to repeatedly flee, losing most of their possession because of it. Other families had the same experience, or lost their stuff due to bombings etc. That heavily informed their decision till the day they died, and of course also to some extent influenced/influences my parents' behavior, which in turn influences my and my siblings' behavior to this day.
I'm not saying it's rational, but it's very human still.
And by people who have to make ends meet and thus take anything they get for "free" they can.
Re "Payback": use of cheesy pseudo-English (mostly created by the ad industry) and sometimes pseudo-French and pseudo-Italian as well is a mass phenomenon in German to the extent you could fill entire "Denglisch" word books from it.
[1]: https://german.stackexchange.com/questions/40586/why-do-germ... "Why do Germans invent English words for themselves?"
1.) have a cashbox (or multiple)
2.) guard cashbox
3.) every evening count money in cashbox
4.) hope the cash you took in is still in the cashbox
5.) if not 4) --> accounting nightmare + fire employee
6.) bring cash to bank
EDIT: Downvotes in HN are not a dissenting mechanism; they are there to bury inappropriate/misleading/etc. comments (not that I particularly care, but it seems a proper opportunity to clarify a misconception).
And nonetheless you were initially asking why would anyone join a bank that charged them ATM fees; the answer is that it might still make financial sense or be convenient for people. We are discussing about why there is a sizable population for which ATM withdrawal fees makes them prefer paying by card; you can of course "blame the victim" and say that it is the fault of those people not choosing the proper back. But it is just avoiding the topic, which is: this is a problem when travelling to Germany, and it I not a problem when travelling elsewhere in Europe.
For example, a spanish Santander card is free in the 4B network, but you will be charged on the german Santander ATM, as it is another ATM network (the Cash Group).
Not necessarily. Here in Latvia banks manage their own ATMs and whether you will have to pay a fee depends on your bank having a contract with the bank whose ATMs you're trying to use (usually there is no fee for taking money out of your bank's ATMs with a few exceptions, i.e. my bank has a 10% fee on withdrawals from credit cards, though most have debit cards anyway).
Who do you think is paying to run that ATM?
PG stated very early on in HN's history that downvoting to signal disagreement is reasonable [1], and that's been generally accepted as a guiding principle in the community ever since (though it's not in the guidelines, so it's a matter of individual preference).
What is in the guidelines is this: "Please don't comment about the voting on comments. It never does any good, and it makes boring reading." [2].
How can the community learn about the rules if we should not point to or discuss the rules? If it were not for my comment, you would not have pointed that to me :)
A good starting point, aside from keeping familiar with the guidelines themselves, is to follow dang's and sctb's comment threads, where issues like this are discussed freqquently. That's how I keep up.
https://news.ycombinator.com/threads?id=dang
https://news.ycombinator.com/threads?id=sctb
The reason not to comment on things like voting behaviour is that it takes discussions away from their primary topic and into the territory of being repetitive, uninteresting, and sometimes resentful and hostile. Of course that can never be avoided altogether, but it can and should be minimised :)
Cash gets more and more expensive (exponentially) on the amount of money (security, deposition etc.). On electronic cash it's like a flat line.
- If I'm doing a large cash business then the next $5+ costs me basically nothing.
- However if I'm doing a mostly credit card business, the next $5 will cost me the same as the first $5.
With that, I think the analysis you read was funded by payment processors.
But to correct myself: This 5€ break even is on a macroeconomic level on all parties. Cash is more expensive on this level when you spend more than 5€ on a single transaction.
Just one example of the other party: the end consumer also cannot get cash for free (even when he get's it free from the ATM, there are costs the bank has and maybe you pay them indirectly).
1.) have a terminal that supports all the different card types
2.) guard the IT infrastructure according to the PCI rules (have you ever needed to implement those, especially for small shop owners with no IT know-how)
3.) every day/week/month accounting of the payments to the corresponding receipts
4.) hope that the customer doesn't initiate a reimbursement
5.) if not 4) --> accounting nightmare + loss of the reimbursed money
6.) spending weekends (small business) for the required IT infrastructure
is this really necessary? AFAIK it's only necessary if you handle credit card numbers, which you don't, and can be outsourced to the payment processor so you're not seeing credit card numbers at all.
>3.) every day/week/month accounting of the payments to the corresponding receipts
this can't be handled by the POS software?
>4.) hope that the customer doesn't initiate a reimbursement
probably not a big issue with card present purchases
Many businesses can't afford to offer credit card transactions because they would be extremely expensive.
2) Why does the seller have to guard the payment processor's IT infrastructure?
3) Certainly faster than counting cash on top of counting the reciepts.
4) The problem doesn't exactly lie in the cash less system. Dealing with complaint is your business' problem.
5) Reversing 1 entry isnt a nightmare.
6) Are you developing your own solution or something?
It might be good to know as well that charge backs in the EU are not as common or easy as in the US.
I guess it's 10 pages now.
If you as a consumer agree to your data being processed and shared as a business model, GDPR can't really do much for you.
Case doesn’t have payments fees but it gets mishandled. You give away too much or a customer said I gave you 50, not 20, etc. Furthermore, unless you are a small business, cash needs to be handled and brought to a bank. That costs a lot of money. You have to pay an armed vehicle with a private security company to get to your store and drive it to the bank. You also have to have cash reserves at your store which can be stolen, etc. those are all cash “fees”.
Cash requires power to “create”. You can’t just create it by changing some bytes. They need to be replaced every 5 years or so. And with all the chemicals used to make it secure, it wouldn’t surprise me if it was worst for the environment. Unfortunately I couldn’t find any sources to confirm or deny that, so that is only my speculation.
Your other points are valid and the only advantage card payments have is that they can be analyzed (which is good if you do that but bad if someone else does it to sell you something) and that you can’t lose it (you only have to pay a small fee to get a new card if you lose it).
Compared to the power utilization of some crypto currencies I'd argue that this is negligible.
The power requirements for crypto currencies are the main reason I oppose them. They are a great idea but useless because mining and verifying transactions puts such a strain on our environment that I couldn’t justify the advantages for everyday use. And a crypto currency with doesn’t require a lot of power kind of misses the point.
For comparison, the German EC card system has fees of 0.125%, and most credit cards had fees of around 2-3% (VISA, MasterCard) or even in some situations up to 7% (AMEX, certain goods).
This combined with credit cards banning users and merchants for sellibg goods based on their own discretion (see the trouble the Rossmann group had selling Cuban goods in their German stores) should explain by VISA and MasterCard have to be eradicated.
2-3% fees for credit cards are common in the US if I remember correctly, but the EU has capped the fees to .3% for credit cards and .2% for debit cards. My point was just that cash isn’t free. It’s not that much more then a card.
Cashless may have its virtues but speed is not one of them.
Every note has an unique ID. But unlike with an online transaction, tracing a bank note requires a significant effort, sometimes even impossible. An average cash register doesn't log such things.
> Cash does not require power
It most certainly does. First, printing requires power. Any large transaction would likely to require use of a note-counting machine (unless a precise amount is not important). Any small transaction requires human power to process (counting, change) - and it's not free, because it takes power to provide suitable operational conditions. Given that humans are orders of magnitude slower, it could indirectly contribute to a significant resource waste (like queues are being slowes, so mall's parking lot being more occupied, requiring more power to drive around to find a spot, etc etc).
"Sometimes impossible" implies some sort of parity with "Sometimes possible" which I think is incorrect.
A challenge: AH26 184646 is the serial on a five pound note in my hand. Where did I get it from?
Banks may (and most likely do) know which exact ATM had issued this bank note to whom. As well as when it was last encashed and from whom. This does not guarantee anything (the note could've swapped hands a few times), but it's less than perfect anonymity, and I'm sure big data can reveal a thing or two.
As to less than perfect anonymity , yes, it is imperfect compared to an abstract definition but, boy is it sparkling perfect compared to a credit card transaction.
You know, the fact I'm not working for Facebook and just can't access your profile info didn't made data there private from, say, Cambrige Analytica. Hopefully, you see the idea - it's the same logic here.
I don't argue it's great and provides lots of anonymity and are essentially untraceable without a great effort. Still, just theoretically speaking - if your bank knows a serial number of every note you withdraw and every note stores encash with them, they have some of data to profile.
This is a good example of 'out of sight, out of mind'.
There are obviously costs in creating cash, distributing it, maintaining it (take old/damaged currency out of circulation) and enforcement of counterfeit protection. And ditto for power.
These costs and power requirements are not obvious though, and so the end-user is not aware of the costs involved.
Any comparison between cash and non-cash needs to be sure to count the complete lifecycle of and payment processing and not just the bits that the end-user sees.
At the time of payment they are irrelevant.
> Any comparison between cash and non-cash needs to be sure to count the complete lifecycle of and payment processing and not just the bits that the end-user sees.
Where is it convenient for you to draw the line? Do you include the production of card readers, the creation and maintenance of power and communication lines?
Guess what happened when I lost my wallet? Or when I washed some dollars in my pants? All my money was gone.
(Fun fact: this effect is one of the major reasons casinos have you gamble with chips)
Where on earth is it, that fortunate land in which the happy people have gotten rid of their cash? Surely their economy is booming, and everyone is happy to have sacrificed the advantages of cash so as to optimize that fundamentally important transaction: hipsters buying overpriced coffee-related beverages without tipping.
http://www.paecon.net/PAEReview/issue80/Huber80.pdf Huber, Joseph - Split-circuit reserve banking - functioning, dysfunctions and future perspectives
Abstract: "This paper first provides a detailed outline of how the present money system works. This then serves as a backdrop to discuss a number of orthodox fallacies and heterodox flaws in money theory, followed by a summary of the dysfunctions of split-circuit reserve banking and a brief outlook on the perspective of a single-circuit sovereign money system."
Keywords; monetary economics, money theory, credit creation, banking theory, fractional reserve banking, monetary policy, monetary reform
One may find comments on the paper here:
https://rwer.wordpress.com/comments-on-rwer-issue-no-80/
I'll quote part of the paper here, and I'd strongly recommend reading all of it if you want to have any understanding of modern economics at all:
"[...]
Modern money is non-cash
As far as traditional solid cash (banknotes and coins) is still in use, cash circulation represents a third circuit. In contrast to precious-metal coins, and like reserves, cash is token fiat money today. But rather than circulating between central bank accounts (reserves) or between bank accounts (bankmoney), traditional solid cash circulates from hand to hand in public circulation, without needing banks, or central banks respectively, as a trusted third party. Regarding the future of money, modern digital cash based on some form of blockchain technology might become a modern equivalent of traditional cash (notwithstanding the question of who will issue and control the stock of such digital currency). In any case, in a basically cashless money system based on money-on-account, traditional cash is no longer of defining relevance.
Within the frame of reserve banking, cash and money-on-account must not be confused as is done by negligent speak, and even by official accounting standards.¹ At source, modern money is non-cash, a credit entry into a respective account. In the split-circuit structure, this applies to both bankmoney and central bank money. Traditional solid cash (coins, notes) has become a residual technical subset of the bankmoney in circulation, withdrawn from or exchanged back into a bank giro account.
Since about the 1920 – 60s, when bankmoney was definitely driving out solid cash in the course of the general dissemination of cashless payment practices, cash has no longer been constitutive of the money system. Cash now represents about 3 – 15% of the stock of money (M1), depending on the country, and a continued declining share in the long run. When referring to broad money aggregates (M2/3/4 which include, for example, deposit savings and money market fund shares) cash amounts to only 2 – 10%. Accordingly, cash can now largely be excluded from monetary system analysis (in spite of its present role as an effective hindrance to misguided negative interest rate policies of central banks). The means of payment that dominates everything today is bankmoney with its share of 90 – 98% in the entire money supply.
[...]
---
¹ Cf. Financial Accounting Standards Board: FASB Accounting Standards Codification, Topic 305-2011, Cash and Cash Equivalents. The same in US GAAP (Generally Accepted Accounting Principles). For a critical assessment see Schemmann, Michael. 2012. Accounting Perversion in Bank Financial Statements. The Root Cause of Financial Crises, IICPA Publications.
[...]
[...]"
Credit cards are a massive cost to society and should be replaced.
In EU the costs on debit cards for the merchant is about 1-1.5% and on credit cards a little higher, 1-2%. This are the real numbers.
If you pay more you are getting screwed.
If each customer had to pay extra depending on their method of payment — 0.2% for cash, 0.125% for EC, 2% for MasterCard, 7% for VISA — no one would use credit cards anymore. Especially for big purchases.
Reality is, as long as merchants can not give cash-only discounts, CC owners leech off of the cash payers.
One is logistical and consumer expectations of maintaining two price lists Another is that credit cards get them more sales and spare them from accidental structuring horror stories. A third reason is security - credit cards leave less cash in the register for a robber to steal and harder to steal from the tills.
[...right?]
Some Germans defend it as "well Germans just prefer their privacy" but they still sign up for loyalty card programs and they are adopting cards for payment, just very slowly for how otherwise-developed they are. This isn't really a stance borne out of principled concerns, it comes from a general skepticism/paranoia of consumer technology/innovations.
I see the same thing with how many German institutions still rely on mailing physical letters whereas the equivalent American ones switched to emails a decade+ ago. For example, the Grundschule my son will start at next year needed to tell us about an appointment. Did they use an email, perhaps one they gathered from an earlier appointment we'd had there? Of course not, they mailed a letter, a letter that didn't come until the day of the appointment, which they then berated my wife on the phone for missing.
Other examples: to create an online account for my health insurance provider, they sent me a code to confirm the account...using an actual letter for the code. Same deal for recharging an Aldi-Talk SIM, you need to have them mail a letter to your address, and then and only then may you pay (via bank transfer). And the websites I've looked at for the Grundschulen (elementary schools) look like they were made by a high schooler in 2006, whereas when I look at ones for school districts for my nephews and nieces in the states, they actually appear reasonably modern. Or when I got photos from people in my son's kindergarten, only one person did sending them over a photo/file-sharing service, the others were a flash drive, a CD, many emails with one or more photos attached, and also someone just handing me their whole camera.
tl;dr Germany is surprisingly backwards when it comes to consumer technology
We wonder the same thing about US credit cards, that just now switched to Chip & Signature
It's not exactly a new concept, considering that the first smart cards for banking purposes were issued in France in 1986[1]
Those that sit in glass houses...
Kindergarten photos: wouldn‘t want pictures of my kids to end up on the web either, maybe slight, but I guess justified paranoia.
AldiTalk: anonymous phones have been illegalized by law a couple of years back. Maybe that? But you could always just recharge via SMS or the web? Don‘t understand that particular point.
I mean, using a file-sharing service (which one person did) isn't really different from emailing them to me. It's just more convenient/advanced.
> But you could always just recharge via SMS or the web? Don‘t understand that particular point.
At least when I was using it, no. You had to get a letter first to setup a bank transfer method of payment, then you could pay online using the web or app. Otherwise you had to actually go to an Aldi. My wife still does this because she's still on Alditalk and hasn't bothered to get the letter.
You should also avoid mailing them around. Better rent some personal webspace/server (rule of thumb: if you do not pay for it, you are not the customer, but the product), put it there and create for everybody who should have access to the data a private account.
EDIT: If you must mail the data around, encrypt it beforehand.
There needs to be a name for this kind of suggestion on places like Hacker News, where someone suggests renting your own server or compiling the program from source yourself or anything else that is very obviously beyond the interest and/or capabilities of the average user.
> EDIT: If you must mail the data around, encrypt it beforehand.
Haha, yes!
I admit that things like server adminstration etc. have to become much easier, so that more "average" people are able to do that (and with this I do not mean: "drop another level of abstraction upon GNU/Linux").
But I know people who openly stop communicating with people who do not respect their privacy in terms of communication, since for example this means that these people are willing to extradite them to three latter agencies.
Nah, they don't have to. Because the current setup works fine for regular users. It's principled, privacy-conscious/free-software-promoting power users like yourself that want them to care even though they really don't give a shit.
> But I know people who openly stop communicating with people who do not respect their privacy in terms of communication, since for example this means that these people are willing to extradite them to three latter agencies.
You must have some interesting associates, I've never met someone like this.
Indeed. :-) In some sense I seem to have a tendency to attract some specific breed of people (that is very hard to describe: let's outline them 'really smart people who have not found their place (yet) and are often somewhat quirky') "magnetically". :-)
If I send you a letter for the same service and you enter the code within, you confirmed your address.
Different things and the former is usually considered useless, the latter interesting to the other party.
I'm a German, now living in Singapore. I used as much cash in DE as in SG: Only where needed and somewhat rarely. In DE it's usually a small shop (kiosk), local public transportation (sometimes) or events. In SG it's food courts/hawker places and events.
Everywhere else cards work, Singapore or Germany (or Israel for what it's worth) work the same in my experience.
In comparison, in the bay area, and to a slightly lesser extent in other parts of the US I lived in, even little kiosks or food trucks, hell even farmer's market stands almost always take credit cards. I had to use cash in the US maybe once or twice a month on average.
And again, it's not a "well they only do this in cases where privacy is actually really important (like healthcare"), because why does Alditalk care so much when the purpose of the address verification is solely for putting more money onto the account? Are they worried a random stranger is going to give me money?
The _kind_ of cards doesn't matter for the article, I think. Cashless is cashless, debit card or credit card? Credit card adoption is a different problem (they aren't popular) and only recently rose quite a bit. You can pay at McD or Aldi with Visa Paywave / Google Pay. The whole contactless method seems to be a motivator for CC adoption afaict. If you complain that a CC is not accepted then get a local debit card :-)
No idea about address verification just for top ups. For me it was paying for a voucher, call a number, enter code, done - but I haven't been on prepaid for a long time.
> You can pay at McD or Aldi with Visa Paywave / Google Pay.
Wait, you can pay at Aldi with Google Pay? I admit I haven't noticed that...although Aldi Sued is a different company so I guess I'll have to check.
> If you complain that a CC is not accepted then get a local debit card :-)
Oh, I've had the local debit card for a long time now, but even that often isn't accepted, and I admit that having to use it so much bums me out a bit. US credit cards are really nice if you can use them responsibly.
But if that's true, where are the major German tech companies that simply follow those values?
They don't exist. Look at the Fortune Global 500: the US has tech companies for days on there, Germany only has car or manufacturing companies. Because Germany just isn't very good at consumer-facing software and services. The whole culture is minimum moderately skeptical of innovation in that area.
Could you please not post this sort of flamebait? HN is a highly international community. People need not to make snarky generalizations about each other, and it isn't necessary to make a substantive point.
Because people make similar generalizations here, well, all the time, and I feel the generalization itself was both accurate and relevant. If I described public transit in the US as an "absolute disaster" I doubt anyone would blink an eye; it's blunt, but also accurate. I don't feel it's wrong or messed up to criticize a particular part of a country's culture or policies, as no nation is perfect.
I could definitely reword "obnoxious as hell" to just something like "really obnoxious/annoying", but I don't feel "surprisingly backwards" is actually flamebait: it's strong language that might irk some people, but it's also my earnest opinion; I was trying to express how it actually felt for me as an immigrant, not trying to piss people off. And I wasn't applying it to Germany as a whole, but a particular area.
I'm not trying to troll you here, I'm trying to see where exactly you draw the line with strong language/what exactly was objectionable so that I understand what's considered acceptable.
At one place we get to hear about "GDPR" and how it's "delayed gratification", "society first".
Then there is this obsession with cash. Where "society first" does not apply.
Cashless society can easily track terrorist funding, corruption, illegitimate cash dealings used in trafficking, drug deals etc...
This kinda seems hypocritical to me.
No wonder Germany is the largest human trafficking country.
> Then there is this obsession with cash. Where "society first" does not apply.
Both are not about "society first" (and I have never heard this term with respect to GDPR), but "privacy first".
For me personally it has not just something to do with privacy, for me cash is more real than my debit card. When I shop with cash I spend less money, I know how much money I have to spend the next X days etc. I can never imagine myself not using cash