Cashless Society

It has been stated that if there were no cash there would be less incentive to steal, mug and avoid taxes.

Unfortunately there would also be less incentive to give to  charity through boxes and plate.
Churches would certainly suffer even though some churches that have introduced contact less giving have declared an increase in the plate. However, from a practical position it does take quite a bit longer to go through the procedure.
Car boot sales points (and drug pushers) are unlikely to want to deal with card payments.

Also it is well known that card providers charge for each transaction over and above the stated monetary value, albeit at the moment that charge should be borne by the trader.
However, online booking services (especially airlines) pass that charge and as much as 500% more on to its customers. So in this instance online booking services appear to be the only ones really benefiting from this cashless society.

And whilst it is true that some transactions are safer with the use of (particularly credit) cards, for example travel protection and online purchasing it is also true that the use of these can also lead to a benign or otherwise surveillance practice by government. Boris Johnson admits that when he was London Mayor, should he choose to do so, he could track, in real time, the location of any user of credit and travel cards simply by their use.

Modern governments now have the ability to track electronic communications, intercept transactions and monitor movements for every citizen within their population – which leads to concerns regarding the future of civil liberties within societies.

In the recent years of the proponents of a cashless society have argued that a world without cash would be a counter-balance to  governmental power, not an increase of its control.

For some, in the debate of whether or not to keep cash in the future, killing off hard currency would not only be a key to a fairer, less violent, and more egalitarian way of living, but would also be a limit to the State’s power. Indeed, while the State and its central bank are in charge of the main decision-making regarding currency – how much to print, when to change the design, how much to store and release into the economy – much of the money’s management is left to the private sector.
Eric Cheng, from the Federal Reserve Bank, says “Cash dispensers, smart-safes, and recyclers have provided banks, armoured carriers, and merchants with new opportunities to automate and improve the process for handling cash. Dispensers and recyclers have helped banks and credit unions reshape their branches towards a sale and service business model, rather than a transactions processing model.” Private banks hold and distribute most of the cash, and financial solution companies come up every month with new ways for dealing with money.
Dematerialization and decentralization (and thus privatization) of means of payment are therefore a line of defence, cash opponents claim, against monopoly of governments.

But cash-defenders see many holes in the argument. The first is that while some of the organizations which manage cash are indeed technically part of the private sector, they are so deeply embedded within the established and tightly controlled by government agencies that one could hardly consider them counter-powers to State power. Investigators today have no difficulty whatsoever issuing a subpoena to a private company in order to access financial details regarding an operation, and the recipient organizations wouldn’t dare refuse to issue the information.

Laura Poitras, from Der Spiegel , reveals: “The NSA monitors banks and credit card transactions — sometimes in apparent violation of national laws and global regulations. The European SWIFT financial transaction network is being tapped on different levels, internal documents from the US spy agency show.”
Paypal, Skrill and CurrencyFair may be private organizations, any money stored within those vehicles is visible to – and therefore monitored by – State authorities.

Cash defenders have seen recent pushes against physical currency as examples of how State control over money can be counterproductive.
Australia, in its long war on cash which started years ago with banks becoming cashless, has attempted to expand its public policies through the demonetization process. Melissa Davey, from the Guardian, reports on the Australian program to issue benefits to aboriginal Australians through a welfare card rather than cash, and how the program backfired: “One of the four Aboriginal leaders who supported the government’s cashless welfare card trial in Western Australia says he feels “used” by the human services minister and he no longer supports the card.
ABC News Australia, covering the crisis, comments: “It’s absurd that governments say they want to reduce welfare “dependency”, yet at the same time actively encourage such dependency by taking freedom of choice away from welfare recipients. And instead of
encouraging “financial literacy”, income management appears to reduce it – by treating welfare recipients as incapable and incompetent.”

As an expanded illustration of the dangers of increased State control, civil liberties watchdogs name some of the most cashless countries in the world as those with poor human rights records and democratic reputation: Iran, Nigeria, Russia, China, for instance.
Countries which have had to endure dictatorships, and have recovered, are more likely to be cautious with the power they give their governments over the lives, such as Germany.
Germany keeps its place as favored sociological example, by cash-defenders, of why a cashless society should be feared.

A number of Brexit supporters have argued that the entire concept of a Cashless Society is yet another argument for Brexit. One sites “The EU are pushing for a cashless society, the reason is that they can easily monitor your transactions because they can now look directly into your Bank Accounts !
Gypsies, Travellers and the like NEVER use electronic and the reason is that with a handshake and an exchange of cash, their business is secret and the EU hates that.”

Another writes. “Well if all these remoaners get their undemocratic way, we’ll have a cashless society sooner than we think! It is the intention of the EU to get rid of all cash within the bloc within the next 15 years. Alongside that , they will centralise our taxes which will be set by Brussels and not HMRC, and they intend to take full control of our personal bank accounts and to oversee all payments deposited with a view to ensuring that taxes are paid on all income!”
None of which is true.
Now who’s scaremongering with no solid evidence to support the statement?

Actually, Germany stands out as one of the staunchest cash-users. While the average German will shrug and simply say it’s simpler to keep track of expenses, some experts claim this attachment to currency goes back to German traumatic experience of the Reich, when the population was completely under the power of the State, namely through financial control.

In the UK another writes. “Having seen and heard the lies and disgraceful behaviour that resulted in the Financial crisis, I am using cash more than ever. Cards leave a trail. Why would I want all my personal info on a computer somewhere? Dates, times, what I bought, where, which shop etc? How long before they sell this information, or it gets hacked and your boss can see everything you’ve been buying. No thanks. All the cards I do use have the contactless function deactivated. Too many cases of same purchase going through twice and small amounts being stolen. Cash is still King!”

Alone in Europe it is Norway (not part of the EU) that is already virtually cashless, and soon will be 100% cashless, and they’re all getting on fine – except the criminals who find it much harder now that all transactions are recorded.

Meanwhile, Which? has reported concerns about the vulnerability of digital banking. A recent analysis by the consumer group found that British banks were being hit by IT or security failures that prevented customers from making payments at an average rate of more than once a day, reports The Guardian.

Those opposed to a cashless society have also raised fears that using electronic payments rather than cash could increase consumer debt.

“With electronic payments, it’s easy to swipe, tap, or click without noticing how much you spend. Consumers will need to renew their efforts to manage spending.”
The number one reason is that people who use cashless payments are much more likely to make impulse buys, so they make more money on those folks.
Cashless is a convenience for many people, but when you’re trying to save money, convenient spending is your enemy. If something is convenient, you’re more likely to do it than if it is inconvenient. Governments and businesses want you to spend, spend, and spend some more.
And the banks are more than happy to see you in debt with increasing daily charges building to a financial crisis.

Do you still think all of the convenience is worth it? Consider these additional risks:

If your phone dies, you won’t be able to pay for anything.
It’s very easy to shut down a digital wallet remotely, and that potentially exposes people’s financial accounts to a new kind of abuse from hackers and government.
Like any other network technology, there is a high chance that a hacker is working on ways to exploit the system.
Once you agree to give out your biometric signatures, you cannot get them back. Many companies are notorious for giving out private information to other firms and governments.
It is not clear how the theoretical database that stores all of this info would work, nor how access to it would be granted. Databases can be compromised, and this one would be the mother lode for cyber-criminals.

 

Footnote: September 2020

With the current Covid-19 crisis many are concerned that the Cash in your wallet may be a carrier of the virus. Don’t worry, the UK is one of (if not ) the largest money laudering banking systems in the world. I doubt the laundered money has any chance of retaining Covid-19 or the often stated Cocaine contamination.