Nordic countries point the way to cashless societies | Hacker News Reader

Nordic countries point the way to cashless societies

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Maybe it is a mild paranoia attack kicking in, but I find the trend to a cashless society very troublesome. I'm doing all I can to avoid being tracked on the web, using AdBlock and Ghostery, among other things, yet the privacy implications of going cashless I'm rarely considering. Cash is anonymous; cards are perfect trackers.

Both your tracks and your most intimate preferences on the web and in real life are perfectly transparent to anyone with access to the transaction database. And I have no idea what kind of protections there are against governmental access to these databases. It is weird that the privacy implications of cashless are so rarely discussed - everyone just seems to be touting the great benefits of cashless all the time.

Agreed. I use cash for everything I can, checks when I can't (local payments), and credit cards only for purchases over the web, where it can't be easily avoided, and one does need, in the US at least, to maintain a credit record. This is primarily to avoid fraud with stolen info, and secondly that mild paranoia we share. If I had a Pocky addiction, no one would know outside my family ^_^.

Why checks for non-cash local payments? They aren't really much better than credit cards for privacy, are they? They also come with some significant risks [1].

[1] http://www-cs-faculty.stanford.edu/~uno/news08.html

They are also virtually nonexistent in Europe.

From Wikipedia: "In most European countries, cheques are now rarely used, even for third party payments. In these countries, it is standard practice for businesses to publish their bank details on invoices, to facilitate the receipt of payments by giro."

"In Germany, Austria, the Netherlands, Belgium, and Scandinavia, cheques have almost completely vanished in favour of direct bank transfers and electronic payments. "

"In Finland, banks stopped issuing personal cheques in about 1993 in favour of giro systems, which are now almost exclusively electronically initiated either via internet banking or payment machines located at banks and shopping malls."

"In Poland cheques were withdrawn from use in 2006"

"Since 2001, businesses in the United Kingdom have made more electronic payments than cheque payments."

The story seems to be similar in Asia and Oceania. According to the Wikipedia article on cheques, North America is pretty much the only place where they are still taken seriously.

[1]http://en.wikipedia.org/wiki/Cheque#Modern_era

There are certainly risks, but these are to vendors I consider to be reliable, e.g. doctors ... and they're really expecting checks (many more "vendors" directly draw from one of my checking accounts). I also have more trust in my banks than Knuth seems to have ... and I indeed keep a fairly low amount of cash in those checking accounts.

There are privacy implications, but you do get a lot in return. Cards are perfect trackers, and that is why I love mine- with virtually no effort, I have a perfect record of my spending stretching back years. That's very powerful for taking control of my spending & finances.

"while some unemployed people selling street magazines now also accept electronic payments."

This was hard to grasp when I saw it IRL for the first time. My local candy store and deli[0] both accept Mobile Pay and it's a strange thing to witness. Imagine the NYC delis, usually owned by immigrants and minorities who couldn't care less, suddenly be on the frontier of adoption of a cashless system. It's that user friendly. And the nature of the businesses (selling cigarette singles and imported sodas) mean you do have a suspicion of it being off the books..

Another anecdote, I just started a record label[1] and for our first show, we accepted cash and Mobile Pay. We're small, it was in a private apartment, but so many people do not bring cash anymore we basically had to accept MP.

[0] Hvis nogen fra Danmark læser dette, så er det Palmen ved skt. hans torv, og kiosken ved Blågårds plads... Sikkert mange flere. [1] https://scalatapes.bandcamp.com/

In the US, Square [1] seems very popular among small stores, like coffee shops and, yes, candy stores. Seems like it's great for low-volume stuff. A few days ago I was buying a piece of vintage furniture from a private seller via Krrb.com, and when I showed up, she said I could pay with either PayPal, Square or Venmo.

[1] https://squareup.com

Tak.

This was a bit of a surprise for me when I moved to Ireland and later the UK two years ago.

In Sweden I wouldn't use bills and coins sometimes for months. Suddenly I have had to get used to carrying these around again, and having to pay fees when you pay with cards etc.

I'm looking forward for the world to go cashless, and think this will happen very fast.

What fees do you have to pay in the UK when using a card?

As a customer, there aren't many circumstances. The only one that springs to mind is when buying airline tickets with a credit card (but not a debit card).

Where it makes more of a difference, though, is that the fee charged to the merchant is a sufficient disincentive that it's pretty common for small shops and bars to refuse card payments under £10. This is even true of the new(ish) contactless payments that only work up to £20 and which were touted as replacing cash.

I'm from Norway and I had the same experience when visiting Berlin last year - having to take out euro-bills from the ATM. Here in Norway I never carry any actual money - I only ever take out money to pay my foreign hair-dresser which cuts my hair for a low rate. I suspect he does not have a credit-card machine so he can avoid some taxes. I even pay for coffey and other cheap stuff with my card. They say we will go completely cash-less by 2020 - can't wait.

Its probablly ok if you live in Norway and your not poor and have a good credit rating, other wise your going to have to go with a prepaid solution that is full of transaction costs. The same with traveling to these countries.

At DEFCON last year I took two bank cards, that I had loaded with funds...big mistake transactions for ATMS and using POS systems were very high.

I don't think this is a good idea if you are forced to go with a card to go with everyday transactions.

Debit cards are the norm here in Norway. I pay 275 NOK/year for mine, with zero transaction fees on everyday usage.

You have to pay for a Debit Card? What's the reason for this?

You pay for debit and credit cards in most European countries. One reason is probably that the fees paid by the merchants for card processing are much lower than in the US. So while a bank in the US is happy to give you a free credit card in the US, because it knows that it gets the money back via the fees paid from the merchants, a bank in Europe won't be able to break even with that approach.

I'm from the UK and have never had to pay anything for opening up an account and using a debit card.

So why are you talking about prepaid solutions? That's not how it worked when I lived in the UK. I had a normal debit card tied to my bank account, just as in the nordic countries. Nothing to do with credit rating either.

I am in Denmark, and pay 0 fees for my debit card.

Seeing as I am a Masters student, so living on the student payments we get here, and my partner is unemployed, if I had fees, I would not use it.

Absolutely not true. Everyone can get a debit card which deducts from your bank account without any fees and is accepted everywhere.

Comments below state other wise.

Comment above was about _transaction_ fees, i.e. fees you pay on a per-transaction basis.

Comments below are about fixed yearly fees.

There is no contradiction, they are talking about different things.

And comments both above and below state that they pay 0 annual fees or fees per transaction (i.e., whilst the merchant may have a Dankort fee, and passes it on to ALL consumers, the number that I pay at the checkout is the same whether I pay cash, debit or credit card)

Here in New Zealand over 60% of retail payments are done using cards, especially as the local EFTPOS system is very low fee compared to credit card. I can't recall the last time I had to use cash. There's still a few small cash-only vendors, but mostly those without a fixed location as mobile EFTPOS terminals cost more to run.

It's very convenient, there's no need to keep receipts to record my spending. No cheques means no chequebook to balance. Of course it does make spending more traceable but given the police need a court order to get banking records I'm not too worried currently. Vendors can track you using the number if their POS records it, but it's hard to get a POS approved so most people use a sealed terminal with a serial interface to connect to the POS.

Cash isn't going away any time soon, but it's just a pain to carry around.

Going cashless smacks of dystopianism. We seem to presume that anyone "off the books" is up to no good. Some are up to no good, but many are simply trying to survive.

Perhaps I'd think differently if we had no unemployment.

I wonder if now the governments there consider people using cash "suspicious", just like the US gov considers not having a Facebook account suspicious, or how the Spanish Court in a recent case considered encrypting your e-mail end to end as "suspicious".

Why do you believe "the US gov" (and which branch and agency, specifically) considers not having a Facebook account suspicious?

This is true in Norway.

Merchants are required by law to report cash purchases over a certain amount to the tax authorities.

The same has been true for cash withdraws from the bank over a certain amount, for decades. "Suspicious" isn't quite the right word, as there are plenty of legitimate reasons. But the cost (reviewing a small number of large withdraws) vs. probability of detection is good.

The scary part is how low that amount is. It's something like 1000 euro/day and 3000 euro/week. There's also a yearly value. It's been going down over time (by a lot, used to be 5000 euro/day only when the euro was introduced).

> We seem to presume that anyone "off the books" is up to no good.

Off the books is no good by default. We have a phrase for it: tax evasion.

Not necesarily, you can be paid in cash by your employer and this is compltely legal.

Where I am from (Slovenia) it is completely illegal. In fact it is illegal for businesses to have cash expenses higher than a hundred euro or so. Very low by European standards, but all countries in EU have some sort of cash payment limit.

This is specifically to curb shadow economies and the grey market.

And the reason it's illegal to pay employees in cash is that the government needs a way of tracking "automatic" social security and tax payments. Where automatic means the employer pays them as the part of the paycheck that doesn't go to the employee.

In the UK it's not illegal. You can pay them in cash in hand. Most builders and workmen that do work in your homes are paid cash in hand when they come round, this is common. They just need to declare it with the correct authorities themself.

That's not off the books then.

Yes, we do that here too. But you aren't their employee, you are their client.

Important difference.

Sorry, you can still be paid cash in hand from most employers. Although most wont offer it. Pubs, bars, nightclubs lots of places you can be paid cash in hand. Just a lot of places choose not to do it as it's easier to manager there cash flows.

Completely aside from the privacy issues, I rather bemoan the decline of cash, for the very simple reason that handling physical currency makes it much harder to spend carelessly.

It's too easy to swipe your card and receive an item. It's a lot harder to fork over $483.71 in tangible, handle-able dollars. After my wife and I analyzed our spending habits, we found that we were bleeding money specifically because of the tremendous number of small - $5 here, $10 there - transactions. These completely fly under your mental radar when you're paying with a card.

We've since switched to a cash budget, where we withdraw the money we need for the next two weeks for various things (groceries, hobbies, entertainment) and spend exclusively out of that. If we're out and about and want something and don't have the cash on us, we don't buy it. When I open up my wallet and see that I only have $X left of the grocery budget, I consider whether I really need that thing I just put into my cart. Internet purchases still get made on a card, but we "pay" for them with cash from the budget into a pool that we withdraw from the next period to refull the budget. We've become much more sensitive to sales, discounts, and smart shopping - and all because we have the continual feedback loop of physical cash. Our monthly margin has substantially improved as a direct result, and we've been able to make substantial progress on all our unsecured debt - we should be free of it this year. There's more to it than just cash, but it's really about being aware what you're spending and finding ways to make sure you only spend what you have; cashless transactions practically encourage you to be unaware of what you have and what you can afford.

For a society that is utterly crippled by debt, and in a culture that is practically begging us to spend money every time we turn around, it seems like the last thing we need is to go cashless. It's convenient, it's easy, it's fast...and that's a problem.

I'm not saying that cashless payment methods are bad. I love them. Paying for things on my phone Google Wallet is magical. Amazon has completely transformed how I buy stuff. There are lots of really great things about cashless economies, but for anyone that is less than perfectly disciplined, it's a very sharp two-edged sword.

In Canada we have Interac debit cards and everyone is happy, I don't even remember the last time I used cash to pay for something...

Here in Brazil I almost don't use cash. The credit card is accepted everywhere, even by the beach's vendor.

I believe the trend in the nordics is largely driven by the Dankort and similar (http://en.wikipedia.org/wiki/Dankort) which is a debit card that is free to get and use for consumers. Merchants pay an annual fee depending on their transaction volume and they are not allowed to pass the cost on to the consumer. It doubles as a VISA which is neat when we go abroad.

An interesting data point is that every single taxis here is happy to take your credit card. I was surprised to learn that I was unable to pay with my VISA in many taxis in the UK and USA.

"they are not allowed to pass the cost on to the consumer"

Haha, that's funny. The merchant's whole income is from the customer, there's no way not to pass it on to the customer, just to conceal better the fact that they're passing it on.

obviously they pass the cost on to the customer, but not directly. they can't charge one price for cash and a different price for card.

Which means they have to pass the cost on to both kinds of customer.

If you're a business customer in a bank, and you bring in cash on a regular basis, the bank will actually charge you a percentage for doing that.

From a discussion I had with a merchant, that rate is quite high, especially for small change. The value he gave for small change was 7%. That's a lot more expensive than the worst credit card charges, except for really small amounts.

Most merchants are OK with the Dankort. Handling cash (in a near cashless society, mind you) is not free either. Bottom line is: if i can't pay with my Dankort, I'll go somewhere else.

In Norway, the equivalent debit card payment system is called BankAxept.

An important factor in the adoption of these cards is the low transaction costs for both the consumer and the merchant.

Unlike credit cards, merchants arent't charged a percentage of the total transaction amount.

Does Dankort use nfc/paypass so that you can just tap your card, or do you need to enter a pin each time?

It's a card with a "chip" and a pin. No NFC/paypass and no plans to change that as far as i know :(

Cashless societies like credit cards and mobile payments

Not cashless societies like Star Trek

This makes quantitative easing so much easier!

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