China says rejecting physical cash is illegal amid e-payments popularity | Hacker News Reader

China says rejecting physical cash is illegal amid e-payments popularity

reuters.com

63 pointspseudolus33 comments

I think this is reasonable for the government to enforce until there is some 100% publicly accessible banking system that provides a medium of digital payments. As it stands, there are people who are shut-out of parts of the economy for one reason or another.

The dangers we will face (and why some people like the idea of bitcoin) is that we're developing dependence on a financial system entirely controlled by private entities. Your bank that holds your money, to the many companies digital payments flow through, to the bank where your money is going. You are controlled by scores you can't directly influence, and can't challenge. If you're Chex score is too low, banks will refuse to let you hold a bank account with them.

I think accepting cash should be required until we have a system like this in place (I'm US focused, but its the same for other countries): The USPS/Federal Reserve buys/launches a Visa/Mastercard like transaction network and at the same time providing a universal bank that any citizen could use without charge. This would make sure that there is no such thing as "un-banked" people, and would provide a world where we could realistically go "cashless."

This still means that the government could track/freeze your transactions. While it’s better than the status quo of electronic payments (where the government can, and so can private companies), depending on your threat model it may not be a replacement for cash.

The IRS (in the US) does not give out information. At. All. Even to other agencies. The USPS as well.

Isolation can be done. It's not perfect, but we can have stronger protection than any private bank can give us.

Uh, Medicaid and healthcare.gov beg to differ

Ok. Most every other agency runs a fairly tight ship. I'd take that any-day over the patchwork of different, and unaccountable, entities that I both know and don't know that hold my PII

If this is true that's certainly pretty neat. I thought the USPS mail scanner information was used by others but maybe I'm wrong? Or maybe I'm thinking of those USPS detectives who investigate mail fraud?

Cash has great properties of being truly distributed, not discriminating people and offline. In case of any electricity or network instability you can still buy an apple from elder causal gardener at his driveway market stall.

I hope we never go cashless.

Here in Finland, the government is playing around with the idea of demanding that the banks' financial systems should be able to operate independently from the international systems in the event of a global crisis. The banks obviously refused as their entire business model is built on international cooperation re. transfers. As long as banks can't crack that nut, I don't think cash is going anywhere...

This isn't a new idea and has worked well in the past

https://en.m.wikipedia.org/wiki/Postal_savings_system

Interesting (and IMHO a good thing to require acceptance of cash.) The situation in the US is more subtle:

https://money.stackexchange.com/questions/74196/in-what-case...

I think it's a wise decision. Cash allows the poor easier access. Plus more options help money circulate easier.

Just throwing this out there because I’d like to hear the intelligent and reasoned answers from HN and get a discussion going:

Should we have a totally digital and cashless monetary system? It seems to me that the internet infrastructure as a whole is quite fragile, and a few well placed nuclear bombs could cut Internet access to a country, and therefore kill their transactional capability too. Would that make them more vulnerable?

(With most of the banking system computerised, have we past this threshold already?)

What did they do during World War II? I’m guessing cash was still common and this wasn’t an issue...

Interested in everyone’s thoughts...

For the reasons you mentioned, a cashless society is extremely susceptible to disruption (the bad kind) that could lead to a serious breakdown in social order.

Keeping cash as full legal tender, even with the availability of a cashless alternative makes sense, in the way keeping farming and defense manufacturing domestic makes sense, even with the availability of cheaper imported substitutes.

We should be having these conversations now, because the push for a cashless society is coming. Mobile payments may solve a real problem in say, Kenya, where rural people don't have bank accounts but do have phones.

There is no such rationale in the developed world, so you better believe the current crop of fintech startups (along with the usual PR push across media channels) will be coming up with frivolous reasons as to why cash is history, and we all join the 21st century by channeling our transactions through their solution so they can take their cut.

From my experience:

There are shops who charges extra if you paying with credit card on the other hand there are shops where only credit/debit cards are accepted. And in both cases there is some logic behind that.

There are additional charges payed by merchant when you pay with credit card, small business just pass that on to customer. For others handling cash is more work. You need to have a reserve to give change, collect cash at the end of the day and put it to safe. Someday move accumulated cash to bank. There's also risk of employee stealing cash. So accepting only cards makes also sense.

Since the beginning of this year it's been technically illegal here in the EU to charge more for payments by debit/credit card over those by other means.

This is a strange decision I feel, very much to the benefit of larger companies who pay a significantly lower processing cost per transaction.

It means that little people like myself have three options: raise all prices by whatever percentage it is that the processing fee is; charge as normal and take the hit if a client decides to pay by card; wing it and try to charge people as i may suspect they'd best prefer, which is illegal.

I'm really not sure how the customer benefits, as I assume most businesses will simply raise all their prices.

The likes of Visa and Mastercard will be happy though, which is good?

> Since the beginning of this year it's been technically illegal here in the EU to charge more for payments by debit/credit card over those by other means.

Wow. What is the stated rationale behind this?

I'm not too sure. I think it was to prevent consumers being hit with hidden charges, which makes sense, but I can't help but feel the legislation is a 'sledgehammer to crack a nut' sort of solution. I think it would be fairer to simply force companies to state up front what their charges are and then the consumer can make her decision based upon that.

- ed

Curious, I had a quick Google, and lo — from a few months after the legislation was introduced... https://www.theguardian.com/money/2018/jun/17/credit-debit-c...

I'm actually kind of surprised, given the Chinese government's "social control" surveillance ability which is enabled by Alipay and Wechat payments.

reference: http://harvardpolitics.com/world/wechat-the-people-technolog...

Yeah, no kidding. Autocratic government against demonetization? Something seems weird about this.

The Chinese government is exactly the type of government that i would expect getting rid of cash soon, so this seems a bit weird, but maybe has to do with not excluding the poor from a lot of commerce. Meanwhile in Berlin, arguably one of Europes startup hotspots, you will be lucky to be able to pay with anything other than cash in a vast number of hipster cafes or bars.

A lot of posts here make the leap to how decisions like this would work in the West. The contexts could not be more different. Until very, very recently China had pretty much no credit available to private citizens, and until the advent of WeChat a few years ago there wasn't much in the way of electronic funds transactions. And the Chinese have tended to be very, very good savers.

This all adds up to mountains of cash in private hands, especially held by older people in the middle class. The Chinese government and people value stability above all else. Eliminating cash just isn't going to be an option in the near term, even with a totalitarian government.

This is one of those signals - among others - that China is farther along the next technology curve (whatever it will be) then the U.S. They basically skipped plastic and went straight to digital/mobile. If the next wave of startups coming out of China can crack international markets, like U.S. based startups have always done, then... look out.

Same in India. There are more digital wallets than plastic. Even villagers in remote districts understand a digital wallet.

Yep. You'll find structurally similar examples from the late 19th century when England passed the torch of tech innovation to the U.S.

Same goes for business history. Companies built from the ground up on the new technology tend to have the wind at their back.

Is it illegal to add a fee for accepting physical cash?

it usually works the other way around - they give you a 2-3% discount when paying with your mobile. in that sense, an extra fee for accepting physical cash is already there.

Very reasonable decision

Of course. This is a blatant challenge to the government's authority.

lol, It is ignorance to blame all problems blindly on authority. Many people around me are complaining that some businesses only support electronic payment, which is a kind of market discrimination for those who have not received the education. And in China, e-payment has nothing to do with privacy or freedom. All payment tools can only be opened with ID cards, and some even need to upload recent photos of real people holding ID cards.

yes, and no, if private entities (non banks) are allowed to hold accounts for customers - than yes. As governments will have no real handle on how actually liquid those businesses are. What promises are their on your deposits? That could get out of hand very quickly. However, if only registered entities can hold accounts, than the opposite is true. Cashless society gives huge control to the government.

e-payments are only a small step away from cryptocurrency

it's really interesting to have the option to make and use a money of your choosing instead of a state currency who's issuance is totally outside your control

democratization of money!

wechat and Ali pay are still paying in RMB. I'm not really sure what hohre talkint about here, it's still a centrally controlled state currency.

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