— The largest cash note is 1000 Fr. (slightly more than $1000). It is readily accepted everywhere and I can pay for coffee with it and get change. (The coffee will be around $4, or $7 for vanilla latte in Starbucks).
— My ATM daily cash withdrawal limit is 75000 Fr. (not a typo). I dream of hitting it once, but I'm not that rich.
— I can go to the nearest bank and buy a physical gold bar, from 1g to 12 kg, for cash, no questions asked, no papers needed. And sell it later at the same place, with only a nominal fee taken (if still in original package).
And I like it this way. When I travel in any other country, it looks strange to me when even a 100€ bill is frowned upon and probably won't be accepted.
It's a bit snarky, but tax payers around the world are thankful for having to pay additional taxes for your privilige. In the sense that the freedoms you enjoy financially in Switzerland have enabled massive tax-dodging worldwide.
Half a million worth of gold, no questions asked? Anti-terrorism-financing acts in Europe start with actions needed by banks and institutions at about 10-20k euro per transaction. Again, I would be among the first to doubt the use of these kinds of acts (does it stop _anything_?). But the tax dodging for one has been a real consequence of Swiss law. It's kind of where the libertarian in me meets the tax payer.
I am sorry, but the modern global tax system is a mess and I don't want to support it in any way. I have to pay quite a lot of taxes and social payments here (contrary to a popular myth, Switzerland is quite tax-heavy for small businesses, and we have obligatory medical insurance, quite expensive), but at least, most of them were voted in directly on referendums, and a lot more were repelled by voters who are also taxpayers.
In most other countries, governments are free to issue new tax laws and amend old ones at their wish, without democratic validation. And the only feedback is the promise of candidates to fix things in the next 4 years, which they rarely fulfill.
> In most other countries, governments are free to issue new tax laws and amend old ones at their wish, without democratic validation. And the only feedback is the promise of candidates to fix things in the next 4 years, which they rarely fulfill.
In the US at least, the tax system is the way politicians can reward their contributors in the most straightforward manner. New, arcane deductions directed at individual companies or groups of companies make for a very complicated tax system. Politicians have no incentive to change it, and we have not elected a person who has a philosophical hatred of it.
I'm not sure you can say the decisions of one country "enable" crimes in another quite like that. The Swiss approach to tax and financial privacy isn't unreasonable, and if other countries require global cooperation to enforce their tax systems, then isn't that more of a design problem on their end?
Exactly. It's very similar to the encryption debate right now. But there should be a right to privacy regarding in which back I put my money after taxes were payed on it and the total amount of money is declared.
The main issue I always saw with the banking secrecy laws that we would store money for people like gaddafy and other rogues. That we should have stored much earlier by law.
All banks, including Swiss banks, now require client identification first (no more "numbered accounts"), and they are disallowed to open accounts for some categories of people.
Also, for several reasons, it is no longer possible for a US person or organization to open a Swiss bank account. This is a pity, and quite inconvenient for US expats working here, but at least fine taxpayers of United States no longer have to worry about somebody dodging their taxation using Swiss banks, at least directly.
Exactly. And that's what this whole crackdown on Switzerland was all about. Not about stopping tax evasion or people hiding money, but about the US lobbyist profiting instead. At no point was it about justice.
Bingo! It is about keeping the money inside the country. It's not just the US. The German authorities even went so far as to offer and pay money to whistleblowers/thieves with CDs full of customer names. It looks like an economic war.
>but tax payers around the world are thankful for having to pay additional taxes for your privilige.
Those tax payers should be thanking their law makers who allow for entities within their jurisdiction to make use of laws elsewhere to avoid local laws.
Ugh, it sounds nice but it's just one side of the story. ATM limits are generally not in place because you can't access your money, but to protect the consumer from being forced at gunpoint to withdraw their entire balance to a thief. Through my work I've got eyes on a lot of people's bank accounts and I've seen plenty with balances of tens of thousands of dollars on their checking account. The ability to withdraw it with no oversight or protection with your card means walking around with your card means you're walking around with your entire bank balance in your wallet, ready to be stolen by anyone who forces you to withdraw, or simply reads your code and steals your card or skims your card. Same for companies rejecting bills, sounds ridiculous in a rich low-crime country, but you don't live in the 'real world' that the median citizen of the world does, you live in a tiny little paradise in comparison. In most other places, retailers don't want to hold that kind of cash in stores, it's dangerous to them.
The gold is great, although it makes little sense for every bank in the world to hold gold. One or two dealers per city is fine, and guess what, they exist already and they don't have to be a bank. I really do like it, though, would definitely like it but I don't think it makes much business sense. Beyond that, it's reasonably easy to simply get exposure to the gold price as investors. The only reason to buy physical gold then is either because you're pretty paranoid about the 'system' collapsing, which is fine although not my cup of tea. The other is for tax avoidance. Let's just say I don't think it's a coincidence this service is offered in Switzerland, and that this may tell you something about the real use case of this service. It may work in a rich country with a finance industry that brings in big bucks, but Swiss policies simply don't work at scale in other countries, and have indeed cost other countries a lot of money who are in a way subsidising Switzerland. (I know because I've worked in that very industry and I've seen how it works. Although I must note, it's certainly not the only country to do this, and it's all changing for the better pretty quickly).
Anyway thanks for sharing your personal experience, I'm sure you know the above and aren't claiming Switzerland is some kind of model for the rest of the world, but that's what it appears to suggest.
What we want from "the system" is protection from seizure. Swiss banks cannot guarantee this protection anymore, because if I am, say, a German citizen they will now happily report my bank accounts to German tax authorities due to recent agreements, and they will seize my money, even if they are mistaken, before court decision, with no presumption of innocence. (Ironically, they are explicitly disallowed by law to do it for Swiss tax authorities).
If I have physical gold, it's anonymous, can be stored securely and is not transparent. Still can be seized, but this is much harder and requires actual physical force.
I get what you mean, I've been on the receiving end of a tax bill that was 10x my actual bill. Indeed I had to pay first, then object, then get my money (without interest) back. It sucks, particularly as I really couldn't miss that money at the time, I actually paid them with debt and paid back my debt once they fixed it.
But perhaps you may already see why gold doesn't change that equation much. After all, take my experience as an example, I didn't have money to pay them, nor did I have credit on my bank balance (I didn't borrow through there). So there was no way for them to actually seize my money from my bank. A bit like having gold and withholding it, they can't seize anything from me, is this a solution?
No. After all, I was completely fucked if I didn't pay. Interest incurs on taxes due (quite a steep rate at that), plus penalties accrue on non-payment (super steep). In addition, at some point you get issues with the justice system. If then it appears you were withholding some gold, you're completely fucked. Now you're paying extra penalties for tax avoidance, which may be criminal depending on the magnitude. You say it requires physical force as if that's some kind of benefit, no way, you're life is screwed when it comes to that. You'll be heavily fined, may get jail time and may have a criminal record, as well as extra scrutiny on your taxes for the rest of your life.
If the government uses force on you by seizing your assets, the solution is not to hide those assets, e.g. in anonymous gold. You can't escape government force, and you're still liable for what you owe. They'll seize other assets you may have, like your home or car, or they lock you up. A system that lets you hide your wealth is not a solution, instead of them seizing your wealth they screw your life in a worse way and accrue penalties that total more than the amount due in the first place. At the end of the road you still owe what they wanted to seize.
The solution is different political policy, more legal protection for citizens to resist undue seizure, fewer mistakes with taxes etc. That, by the way, could happen when all transactions are digital, transparent, and more easily accounted for and reviewed. Even the most modern tax authorities tend to run most calculations on historical data, then give you a chance to correct them once a year. Obviously this is a flawed system: historical data is not accurate (e.g. you lose your job, they send a tax bill on the basis of your old income, you have no money, no taxes due, you must pay a huge bill, then fight it and get the money back. It sucks). And ordinary people have trouble with proper bookkeeping and do not give an accurate account of their finances once a year, it's really hard. In a world where finances are completely digital, this whole story becomes much easier and more accurate. It's far from perfect, but it's an improvement. Combined with citizen protections, a digital banking system can be beneficial.
Privacy and political oppression are enemies of financial transparency and digital systems, there are great arguments to make there against digitisation of banking. But asset seizing that you mentioned, I don't think is one of them, hiding wealth does nothing to solve the problem. That doesn't mean I approve of automatic seizing, by the way, no way. But the solution isn't hiding, it's different procedures, e.g. building in recourse prior to payment being required let alone assets being seized.
In theory, I agree with you. We all need better laws and better governments, and less mistakes.
In practice, however, being faced with this 10x incorrectly calculated tax bill (and I've been there, too), if your money is seized before you can object, you are screwed. My business would have been totally busted in a moment if the money were taken automatically back then. And when this kind of thing happens, your first thought is not "we need a better legal system and transparency!". Your first thought is "where I'll get the money to feed my family tomorrow and pay salaries at the end of the month?"
And even when everything is transparent and all taxes are just and always calculated correctly (we can dream, right?), there's always a question of malice. Politicians are not always neutral unconcerned actors, to say the least.
"Tax avoidance" is not that simple. Tax laws are complex. Often businesses and governments have different opinions on what should be paid, so all tax bills can be opposed and challenged.
I own a small one-person software consulting company in Switzerland, working with international clientele and paying myself a salary. I _still_ have discussions with authorities on what should be paid and why, because its in their interest to claim the most, and in my interest to pay the least (and there are no less than 20 different incredibly complicated laws regulating my business). Often I prove that I am right, and tax claims are reduced, sometimes substantially. If I have paid automatically everything that is claimed by authorities, my business wouldn't survive a single year. For larger companies dealing internationally, it is way more complicated. 50 years ago, to own a "transnational corporation", you had to be a billionaire and run a quite complicated business machinery, and laws were written according to that. Now, a one-man software company can be transnational, but some laws were not updated to reflect it.
Thus, allowing the government to peek into and seize my bank accounts at its caprice would be the disaster for me and my business.
I agree with you 200% here, but the HN crowd don't seem to be able to even conceive that once cash is gone, it only takes a glitch, a bug (in software? Surely not!), or a malicious action by bank or state, and then you are left in a rather desperate state.
Today the bank can, and had recently, make mistakes, but o can still buy food on the way home thanks to cash.
Have an unpopular opinion about the current governing political party? One click later a bank account might experience a "technical difficulty." Named to an unofficial secret list of troublemakers (e.g. "no fly list") by a faceless bureaucrat? ditto.
This applies not only to individuals but also to corporations. The ability to freeze (or "disappear") a corporation's finances with a keystroke could be a powerful political weapon.
From Apple to the EFF to Amnesty International... and the faces that represent them, this could open an entirely new political warfront.
Not even malicious. Just a mistake or law misinterpretation. Banking software systems may seem relatively logical (spoiler: they are very NOT), but legal structure around payments, compliance, taxes, insurance etc. is a mess. Tax returns are commonplace (this means that mistakes in taxation happens all the time).
Currently, if there a mistake, you can challenge it, then pay. What governments want is taking money first, then you can try to challenge it. I'd say no thanks.
Swede here – it's national news whenever any of the payment systems go down. In particular the big bank initiative Swish, which seemingly tend to not cope well with high density situations such as concerts and festivals, garners criticism whenever it goes down since it's advertised as "the alternative to cash." What scares me the most about it is that the system is designed to have you give up control, under the guise of "making your life easier." Tin-foil hat warning perhaps, but fact of the matter is that these institutions (in which I include the government) have shown over and over again why they can't be trusted, not least because when they "make a mistake" it's always the rest of us that end up in the shit for it. You're asked to just deal with it, with little recourse.
I'm all for abandoning physical cash, but we're nowhere near having solved all of the questions, and the current alternatives available in Sweden are demonstrably worse than cash – despite the latter's shortcomings.
Another thing people overlook is that when all peoples money is in the bank, then banks are free to raise all the "fees" they need to "handle" your money.
Also if all peoples money is in the bank, then government can choose what ever tax rate they please and just take the money by simple transaction.
I'm also in Switzerland but I'm pretty sure my ATM limit is much, much lower than 75k. Actually I managed to max out my debit card daily limit just by buying a new MacBook Pro. The limits aren't there because banks hate cash (much), they're there to stop someone being marched to an ATM at knifepoint and being forced to empty their life savings into someone else's pockets.
Admittedly, I have never actually attempted to withdraw more than about 1000 CHF from an ATM. I just assumed the limit is the same as the debit card tx limit, which I have definitely hit.
>>> My ATM daily cash withdrawal limit is 75000 Fr. (not a typo). I dream of hitting it once, but I'm not that rich.
Isn't it a bad idea? Default limits at my bank are around 1000Eur in withdrawals a day but I have reduced my limits to what I might typically need (around 100Eur), just in case I get my card skimmed/stolen to limit the damage.
My personal limits are much lower. 75000 Fr. is as far as I can raise it without hitting an ATM limit. Still, it is quite high amount compared to other European countries, around 4000 Fr.
Skimming doesn't work with my card (set to chip-only operation), PIN code is 6 digits, auto-blocking after 3 attempts, and not written anywhere. I travel a lot, and the ability to get instant cash saved me more than once.
American here. I would love for the ability to set my cards to chip-only operation. I've even considered going so far as to use a magstrip writer to remove all data from the magstrip.
@jon-wood — yes, in most countries, even in the US (though I have found a few incompatible ATMs in Boston).
The only country where all ATMs were hard-wired to accept 4-digit pins was Israel. But I was there 5 years ago, perhaps they upgraded their ATMs since. :)
100 € might be a bit too low. Mine is 800 € a week IIRC, but it also counts for payments via EC (Electronic Cash, i.e. paying with the normal bank account card). I once ran into it on a Sunday after just having paid for a week-long hotel stay. Luckily I had just enough money left to pay the train ticket back home.
Having said that, I also like the relatively low limit to contain the damage in case of skimming or card theft.
There was a money laundry investigation a while ago because someone walked into their local Post Bank and withdrew 4.6 million Franks in cash (in 4600 Thousand Notes). The employees checked if the man had the amount in his account and paid it out. The bank was found not guilty of any wrong doing. [1] However it turned out the guy was a con man and disappeared. Flags should have been raised because of the large electronic deposit just 2 days before but the employees them selves did not know that.
On the subject of money laundering, Joi Ito just recently published an essay linking anti-laundering laws to copyright laws and critical of the usually poor design of both.
Abstract: Intentionally or unintentionally, poorly crafted or outdated laws and technical standards threaten to undermine security, privacy and the viability of our most promising new technologies and networks, such as Bitcoin and Blockchain. We should vigilantly be reviewing and revising laws and standards for the public good and working to prevent the creation of fragile and cumbersome systems designed to comply with these poorly crafted or outdated laws. In this post, I discuss the Digital Millennium Copyright Act’s Anti-Circumvention provision, Digital Rights Management, Anti-Money Laundering Law, Know Your Customer Laws and security backdoors. [1]
"Most of us are already moving toward a cashless society -- not because we care about the crime-fighting, but because the stuff is darned inconvenient."
What on earth are they talking about? Why do people keep saying cash is inconvenient, as if saying it makes it true? It is, in my experience, extremely convenient. It is the most convenient form of payment, person to person. I owe money to my friend. Do you have a pay-pass terminal? Oh you don't. Let's just log into our bank accounts. Let me make sure I got your BSB number and account number right. etc.
I want to give some money to the homeless beggar. Excuse me, do you have your bank details?
Here in NZ it is literally easier to pay people via bank transfer. If I want cash I have to get a $20 out of an ATM. If I owe someone $5, I then have to get $20 out and spend some to break the $20. Or I can get their bank account, enter it into my banks phone app and bam in seconds the money is transferred, next time I have their account saved. But it wasn't that hard because they had a banking app on their phone and knew how to send it to me in an SMS.
Commonwealth Bank in Australia lets you transfer money with just a mobile phone number. I literally open the app, authenticate with Touch ID, select someone from my contacts and it just works (depending on their bank and if they have their mobile number associated).
I think even the amount to transfer and who to transfer to should be automated. The app should just know who visited the restaurant and the menu would already have the prices. You just choose what to order/buy and it's charged, just like on Amazon etc. Once we abolish tips everything will become automatic!!
Correct me if I'm wrong, but do you mean basically ordering your food on your phone?
That destroys the human element, which is a big part of the restaurant/hospitality experience.
There are products out there that let you order through a tablet at your table, and also apps that let staff use an iphone instead of a notepad, but it takes away a large part of the experience.
It's fine for places like McDonald's (who now have touch screen ordering in some countries, like New Zealand and Australia), but if I went to Bouchon Bistro, I wouldn't want to be ordering through a tablet.
Well, I wouldn't mind if most restaurants had robots instead of waiters and digital food ordering (like tablet on a table). Human element I usually need is people I came with, not waiting staff, I don't remember when I had any useful input from them (they don't know my taste and their goal is different from mine). Nice looking smiling human per hall, who can come up to our table once and ask if everything's ok would be enough. Maybe in top fancy restaurants it's not the case, but 90% of restaurants aren't in that category where I live.
That McDonald's style kiosk ordering takes away the human element I can understand, but I don't see why would that be the case if the waitstaff is using a digital notepad instead of a paper one (I'm talking about something like a Noteslate).
> Why do people keep saying cash is inconvenient, as if saying it makes it true?
I know I enjoy arguing about whether the cash I have is too large for the other party to conveniently make change for. I especially enjoy my wallet bulging with coins and wads of paper. I love the thought of having the week's grocery money ready to be lost and stolen - or even better, carrying my whole pay packet about until I can put it somewhere safe.
Why are you sitting on piles of cash (digital or otherwise) such that NIRP would hurt you? It's much more sensible to keep your long-term savings in non-cash vehicles. And your short-term, liquid holdings (rainy day savings fund) doesn't need to be so large that a -1% interest rate will hurt a lot.
I made a coin holder out of index cards and duct tape that fits in half my wallet and holds 24 coins. I can always either pay with exact change or minimize the number of coins I receive in change,
I routinely dip into the spouse's in-vehicle change-hoard tray to refill it, because apparently some people can't be arsed to fish a penny out of a giant pile of coins when their drive-through total is $X.01, and would rather dump $0.99 in coins into it--never to be spent--instead.
In theory, you should never need more than four $0.01 coins, never more than one $0.05 coin, no more than two $0.10 coins, and not more than three $0.25 coins, per cash transaction. If you have those 10 coins, you can always provide exact change. If you do not have those exact ten, you can always spend some of your coins, such that you get fewer than nine coins in your change. In practice, I need more coin slots, because I am spending coins that do not originate from my own transactions, and need to spend as many small coins as is possible, rather than maintaining an efficient working set of coins in my wallet.
If no one else is filling up a change jar at home, your coin holder only needs to hold ten coins (in the US). It will fit in the same space as a paper note folded in half.
Well I'm glad at least a few people on HN still appreciate the finer things cash provides! Try worrying about muggers with other forms of payment!
What's interesting to me is how far ahead some poorer societies are than us in the cash department. Such as in Africa. They have gone all mobile payments and eschew the local currencies.
Criminal can drain your whole account (plus credit limit) by applying force to you. They can only have whatever you are currently carrying n case of cash.
Well you can have the same restrictions applied in the app as an ATM.
Or claim to.
I take your point though. The inconvenience to the mugger to force you to travel to an ATM may be much greater than making you send a larger amount with your phone. After all, with physical cash it was very believable you didn't have more money that can be extracted. Now that you can move more, the mugger can force you to move more.
BUT then you can reverse it later. Unless you can argue that the mugger would be more likely to kill you afterwards than before, as a result of the sum. But then you could have the reversals happen anyway, and the muggers would know that's the default. All that remains is proving it was a mugging... all the transactions could be reversed based on that (we are not talking about bitcoins here, but systems of credit so the mugger might go into debt if they spent the money already). The idea of banks etc. instead of bitcoin actually helps in a libertarian type system because the money can be yanked back and the mugger doesn't want the inconvenience of never having a bank account. Plus if his other property is all interconnected, then crime really won't pay, and there would be less need for incarceration. We just have to somehow have fair systems of proving it was really a mugging. Maybe along the lines of the DMCA... someone could claim a mugging and then you'd have some time to respond, both sides would present evidence, and there would be a global reputation for both true and false claims of mugging.
Anyway I think in practice there have been less muggings now that cash is digital in Africa.
There is a reason crypto-currencies are still growing in popularity. You might have electronic convenience and decentralization convenience at the same time.
First off, Walmart will wire up to $50 for $5 domestic, not $25.
Second, what's the point of sending $1 to much of the world, where it isn't legal tender?
Third, "cashless" in this context means domestic use. Even if we were all cashless tomorrow, you'll still have to pay transfer fees to put $1 into an overseas account. Plus, the bank on the other side may charge to accept that transfer - mine does.
Fourth, the failure rate for sending $1 through the postal system has to be pretty low, because it's hard to detect a single bill in an envelope. A high failure rate would mean that every letter would be opened up, just in case there's cash. That level of tampering is easily detected. (Of course, sending cash overseas is different, as international letters stand out, and perhaps might more often contain cash. But I have send cash to South Africa and it got there just fine.)
If we instead talk about sending $1 inside the US then it's $0.49 for the stamp and $0.07 for the envelope ... for what may be door-to-door delivery.
What other system can beat that price? (I think Bitcoin's transaction fee is slightly less, but not significantly so.)
Does that mean domestic bank transfers between accounts aren't free in the US? I suppose that would explain why cheques are still in use.
I've never paid for a bank transfer within Europe, even when the transfer crosses national borders. I've always just assumed that to be one of the basic ideas of a banking system.
Here in my Western European country, national transfers done over the Internet are paid, unless both accounts belong to the same bank; they cost around .5€-1€. They're free at the ATM, though; it's clearly a convenience fee, not a cost.
Further examples: I have a bank account in Germany and UK and neither charge me for bank transfers. I haven't even heard of a bank account that charges for transfers in Germany.
US is pretty unique and backwards in this regard. International wire transfer in EU is either something like eur 0.20 or free, depending on how bank structures its fees (the internal txn processing cost to bank is somewhere between 0.005 - 0.02 depending on volumes).
I open up my Swish App (owned/operated by big Swedish banks), enter my friends phone number (either manually or via my contacts) and then enter the amount and a message, totally free and significantly more convenient than cash, which I basically never carry.
I can even pay the kids selling strawberries by the roadside via Swish.
Then again, Sweden is in the forefront of the cashless society at the moment, for better or worse.
Let me expand on that, Swish is currently free for sending a transaction between two persons.
Accepting Swish-payments for merchants, companies, organizations and associations is not free however. The last time I checked (a couple of months back) - Swish was more expensive than handling credit cards in general.
In this thread I have seen dozens of comments about muggers and knife wielding assailants at ATM machines. In my 40+ years on the planet, including living in NYC and DC and traveling to dozens of third world countries, I have been mugged exactly once, in 1989. I was able to get away without giving up any money.
Meanwhile, the number of times that an electronic account that I hold funds in has been unexpectedly lower than expected due to error, misunderstanding, or fraud, is at least 100 or more.
Cash is convenient in some ways, not so much in others. It's convenient for making small purchases and keeping the transaction anonymous. On the other hand, it's inconvenient when you want to be able to prove a transaction [my bank paid a deposit into your bank] and also inconvenient for large transactions.
On the other hand, "convenience" is a contrived reason to favor cashless transactions. As if the whole purpose in life is to reduce friction from our lives. It's not. Oh, it frees your time up to do other things. As if people didn't have enough time. The main thing lacking for most people when it comes to time is time management and allocation. That is, people who might save an hour's time by automating activities don't go out and spend that hour productively. Likely they'll find something else that'll use up their time.
So, we have people who work in industries which are automating jobs away [say Uber, or even supermarket automation, HFT, etc.] but who on the other hand want authentic hand made or bespoke items. Why not go for the mass produced item from Walmart they helped get produced and are more "convenient"?
There's a lot of... judgement? projecting? something else? in this comment.
> As if the whole purpose in life is to reduce friction from our lives. It's not.
Purpose? No. But it does feel really good not to have friction with silly things in your everyday life.
> That is, people who might save an hour's time by automating activities don't go out and spend that hour productively. Likely they'll find something else that'll use up their time.
Why do you say so? What's objectively productive? Doing nothing with the extra time may be actually a productive / useful solution. If your day is full, just removing stress from life is great.
> we have people who work in industries which are automating jobs away [say Uber, or even supermarket automation, HFT, etc.] but who on the other hand want authentic hand made or bespoke items
Do they? Some probably. But generalising like that over whole industry's lifestyle is silly. Even if you do see those items, maybe they just buy something cool they like, which is simply not what's mass produced and stocked at Walmart.
I feel like you're trying to criticise lifestyles of other people, but don't see a real reason for it.
> I feel like you're trying to criticise lifestyles of other people, but don't see a real reason for it.
I feel like you are reading way too much into it. You say less friction "feels really good", but don't address his point that maybe less friction is not actually good. There are many areas of life where this is demonstrably true. Take road widths, for example. If we "reduce friction", we end up with wider and straighter roads which have shown to cause people to drive faster and results in more fatalities (i read this on the internet somewhere). Sometimes friction keeps us grounded.
I found nothing offensive about the parent comment, and have noticed similar things.
All it is is commentary [and irony], not judgement. It's not wrong or right, but it does have consequences on the human condition. Some positive, some negative.
For example, human inter-relationships are full of "friction". For some people not having friction would be ideal, for others a relationship without friction is no relationship at all.
And I think that can extend into the physical world. Maybe I'd like to remove the friction of having to wipe after going to the toilet --but it's also a good reminder we're still part animal. So it is when we actually have to drive or cook for ourselves. We're not just commanding people or things to do the bidding for us -we have to face the "dirty work" whether it's having another human do it for us or ourselves. But automation removes this mirror.
The "reason" for it is that we could lose touch with our own humanity. It all becomes abstracted --it's a transaction, the human labor (or lack of it) are not even considered any more. I know this might sound like it's coming from a luddite, but it's not. It's just observation and it may or may not have import in the future, if we keep going this route.
The inevitability of friction is one part of the human condition, and the drive to eliminate it is another. What separates humans from animals is that we can evolve intellectually by amassing tools and knowledge over generations about what causes friction and what we can do to eliminate it. But eliminating friction just means we get to work on harder problems, like how to leave this planet. So you never truly eliminate it, you just change its nature.
I found myself nodding along in a agreement with mc32's post. I usually stop by the ATM around Dawn, it's just one of those errands I enjoy. Not to mention the minimal possible tracking ability by aggregating payment history info. Small businesses that I frequent also seem to appreciate cash, which is plus.
I've done it all in cash in the past. It's not "hard". It's only thought of as inconvenient because we've been raised to think so. Now, some of those things are no longer easy due to incumbent "automation" [automatic deposit, for example]. I have had cash jobs in the past. It's not a "game changer" It removes friction, yes, but it's not in the same league as curing disease, bringing about equality or reducing pollution, etc. --the big things that matter in improving life.
There are many, many apps out there to facilitate many things, to reduce friction. You know the two that matter most to me [other than telephony]? Navigation (maps) and Yelp (or similar) [finding food, entertainment]. Most other things can wait till I get to the office or get back home. I detest the idea of being electronically "tethered" into always on attention.
No, the convenience is real and doing those things manually consumes time. Heck, I have a small cheque sitting on my desk for weeks because it's not quite worth enough to take half an hour out of my day to take it to the bank.
You should look into a bank that has a good App. I use BECU and they have feature on their app where I can deposit the check with a couple snaps of my camera.
In Canada all you need to send someone money from your bank is their email address (and you supply a question they should be able to answer). Actually quite an impressively well designed system, considering it's been around for at least a decade now (first one I have a record of having sent was in nov 2005).
With Venmo/Square Cash, I find myself paying people via app more than anything. Forgot your wallet at lunch? Splitting up bar tabs? Our landlord wants a single check, and paying my roommate rent via Venmo removes all the pain of handing him a check (he was terrible at depositing them) without needing to carry around a few hundred dollars in cash every month. These apps have been available for years, and it's easy to get it set up to pay/deposit directly to/from a bank account, which makes transactions free. Cash is no longer the most convenient way to give friends money for me.
I'm also waiting for panhandlers to figure out Square is free, assuming they have a smartphone. "Sorry, no cash" stops being the end of the interaction if they start taking credit.
Electronic payment is nice because you don't have to make change. Paying a friend with PayPal means I don't have to round up $18 to $20, because I've only got twenties and my friend has no ones. It also means I don't have to closely watch cashiers as they count change.
You however have to closely watch PayPal. Try to pay to a product or service from former USSR countries; then weeks later suddenly get your account suspended. Or not.
Do you like taking chances like that? Cash saves you here.
We live in a world where people from all over the world live together. I work with people who are from France, Germany, Spain,but also from Russia, South Korea, China, Israel, South Africa. We might go for a dinner one night, then I have to send them some money - I'm genuinely worried paypal might block my account for sending them money "as a precaution". Seriously, cash is million times better.
I very rarely have cash on me. I don't encounter beggars and just shout a friend a drink or movie if I owe anything. Bulk of my purchases are contactless (PayWave in AU) at bars, shops, etc. Haven't been to an ATM in almost a year which strikes me as pretty convenient!
You haven't been to argentina then. Money is an inconvenience every single day. Handling change, and having to have dozens of bills in your wallet all the time is a hassle. Visiting an ATM every couple of days, or running short of cash and being unable to pay for anything.
Cash has other inconveniences cards dont have , and viceversa.
Argentina is a living proof that cash is the king.
Until very recently, as a visitor you will be losing 30% of value if you withdraw funds from ATM or pay with card, as opposed to bringing USD cash and exchanging it on street.
From my point of view, the major inconveniences of cash are having to predict how much you'll need on hand to cover expenses, and having to go out of your way to replenish your holdings when it's likely to be insufficient.
I use contactless card payments for pretty much everything except coffee these days.
I think it's two things: firstly, I've been conditioned not to use card payments for low-value transactions; and secondly, forking over actual currency for coffee makes the cost more "real" in a way that helps me to limit my consumption.
If the amount of a person-to-person payment is not a multiple of $20 then cash is useless, because that is all ATMs give out and my peer group doesn't consider using it for any other reason.
Open Venmo or Squarse Cash, type name (gets auto completed), type amount, done. Works regardless of whether your preceding set of transactions has left with exactly the right number of bills of each denomination.
I disagree, except for the single case of paying your friend, it's more convenient everywhere else.
Here in New Zealand, the only places that don't take cards are small stalls at farmers markets (most of them take cards now), and some taxis (which is more to do with them trying to avoid tax and being generally dodgy, any good taxis take card).
I have the bank account details of all my friends saved, and I can just open up my banks app and send them money, and it arrives within an hour into their account for all but 1 bank.
I agree, but of course the people who argue against cash on convenience argue on the grounds that using cash you have to carry around different denominations, risk losing it etc.
My belief is that the biggest weakness of a solution is generally a side-effect of its greatest strength, in this case the need to carry around cash in different amounts and risk losing it, having it stolen are necessary in order to have something so easy to exchange among people.
I haven't actually had actual cash in my wallet since before Christmas. Every store takes credit or debit. I can email money to people I owe money to. Cash is darn inconvenient.
Giving money to homeless people is just about the only thing in your list I can't do.
We also have contact-less payments with both credit or debit so it's even faster for low cost purchase. Need a coffee from starbucks? Just tap your credit card and go. But the time you put the wallet back in your pocket it's authorized.
Swedish and Norwegian banks have apps that focus on person-to-person transfers. Most of them will let you transfer money by adding your VISA card and using the recipients phone number. Vipps, developed by Norway's largest bank, has gotten 1,5M users in 1 year (approx. 5M are living in Norway). There are complementary apps from other banks and financial institutions as well.
Aren't here any equivalents in the US? Any particular reasons why apps like cash.me don't get adopted?
Why do people keep saying talking in person is inconvenient, as if saying it makes it true? It is, in my experience, extremely convenient. It is the most convenient form of communication, person to person. I want to talk to my friend. Do you have a phone? Oh you don't. Let me make sure I got your phone number right. etc.
When that is the case you can use electronic payment. But they are not mutually exclusive. Electronic payment can coexist with cash. The fact that electronic transfers are convenient for large purchases does not negate the convenience of cash for small person to person transactions.
People are making the argument that because electronic payment is convenient for large transactions, therefore cash is inconvenient in all cases. This is a falsehood. They are both convenient in different cases.
In a way, convenience is in the eye of the bearer.
To me, it's much more convenient to have transactions over and done with by the time I leave the store, rather than ending up with an unauditable monthly statement that could have extra or missing charges.
(Never mind the whole commercial surveillance angle. I've actually made it a point to go back to cash at various places I'd gotten lazy with. Hitting the ATM every week is a small price for participating in society's most popular mix network)
Cash is inconvenient for small purchases. I hate dealing with coins. I wish they would finally kill the 1 and 2 (and maybe even 5) cent coins in the Eurozone.
It's very inconvenient to have to pay the bill at a Asian restaurant that doesn't have a credit card reader nor an ATM when you have less cash than you thought you did. But they're giving Venmo a reason to exist, so someone's winning.
I probably make about 1 cash transaction a month, usually at some old joints or clubs that have no way to take cards, although even at clubs I can now increasingly pay with my card via NFC, it's so painless and seamless.
I tend not to give homeless people money in general, I rather do it via an institution or buy them what they need. If they say they need some money for food I'll go shop with them if I have time. But I've indeed also walked to an ATM at various times, which are fortunately all over the place in my city. Even if I had cash I'd always be a bit conflicted to give... On the one hand I've spoken to various (ex) homeless people and they advised me not to give, not be naive for my sake and their sake (read: drug addiction, better dealt with by an institution which are pretty solid in my city). On the other hand, I've loved ones with homelessness in their past who've rebounded by the grace of complete strangers' help, including financial help, and didn't ever use drugs but were really down n out and on the street. You never know which of the two you're dealing with.
But let's be real, helping homeless people isn't exactly a daily use case. If it was something you do frequently enough, there'd be way better ways to do it than giving away random small bits of cash.
Everything else, digital is more convenient. For example if I have dinner with a buddy, on the way back home I'll grab my phone, open my banking app, click his address which is automatically saved from the first time I used it, type in the amount and press send. It's virtually the same as grabbing my wallet, calculating the tokens I owe him and handing it to him. Payments are literally like messaging for me, but you're sending digital value tokens instead of digital speech. Yes it's hella convenient to do digital messaging of money.
The thing about digital payment's that's more convenient is that I don't rely on carrying a specific denomination of cash with me, or rely on being in physical proximity to the payee. Need to send $500? Well I'd never carry that kind of cash, so that's an ATM trip for me, and then a trip to the guy I owe it to. Digital money is more convenient here.
Payments in stores? Both I and the cashier need to do basic calculations with the tokens using cash, and again I have to carry enough on me. Turns out digital cash is easier and faster. I have my card out by the time it's my turn in the queue, I let the cashier scan, then I hold my card next to a little NFC scanner and I start walking away. In some older places I put in a 4 digit pin, even so it's faster than cash. That's convenience for me.
Don't get me started on online payments, which are btw causing physical store bankruptcies left and right. I see it all around me, I've got friends who buy their entire wardrobe online, their phone online, their groceries online etc etc. I'm not much of an online shopper myself, but even so I rarely use cash and the reason is convenience.
The biggest problem I see coming with "cashless societies" is severe technological fragmentation. For mobile payments, in China you can get around with WeChat Pay and AliPay; in USA you use PayPal, Apple Pay, Android Pay, Samsung Pay, Venmo, and probably a few others I'm forgetting. In Australia you have PayWave. What about plastic? In Singapore you have NETS, in USA you have Amex, Visa, MasterCard, in China you have UnionPay, ...
And guess what? None of these systems talk to each other. Even PayPal USA doesn't talk to PayPal China for goodness sake. Most payment systems require local addresses and phone numbers to even register an account, so if you're a short-term tourist or business traveller, you're out of luck. If you're a frequent international traveller, cashless societies are going to be absolute hell unless we come up with some kind of internationally-standardized protocol, which doesn't seem to be happening any time soon because each payment system has a corporate agenda behind it.
Plus, every electronic form of payment includes fees. Their sole purpose of existing is to collect fees to pay the owning company's investors.
The effect is that in the middle of all monetary transactions, there is a mandatory and forced private profit scheme. That's insane.
Cash is free to use, and bears no intrinsic fees. The same is often true of personal checks in the USA. While these are the most labor intensive ways of transferring money, they don't incur any intrinsic shrinkage in their use. All the digital and fully automated systems of transferring money are more expensive at face value.
True. PayPal is currently free for interpersonal payments, but who knows in the future. Now that banks are not processing so many checks they have to compete using their own "easy pay." Chase has QuickPay, which I haven't used because it's yet another network, but it is free to send money to someone at Chase or another bank in the ClearXchange network. Maybe if they can stay in the game and expand their interoperation payments will stay free.
The closest to something standard there is is the combination of IBAN and BIC/SWIFT. Works flawlessly and cheaply within the EU plus surroundings (.ch, .no, ...) thanks to https://en.wikipedia.org/wiki/Single_Euro_Payments_Area . By November, only the IBAN will be required anymore.
This is a problem. I see Chase's QuickPay can talk to a few other big US banks, but I haven't tried it because then I always have to ask the other person who their bank is. This is no different than asking if they have a PayPal account, but it's still a pain. It sure would be nice to have a convenient, distributed EFT-like standard for these things.
Ya, this. I can't even log into my ICBC account online because it requires a stupid SMS verification with a number I can't use in the USA. Some US banks do this as well, and I stayed clear of them.
I'm not sure what you mean about those systems not talking to each other? I can take my Australian PayWave cards (which are actually Visa, Mastercard & Amex) and use them in Singapore and across Europe. I was using them in Sweden, Denmark, Germany, Austria & Slovakia.
Cashless makes travelling easier. It's far easier than managing different currency for each country: SEK, DKK, SGD, EUR, AUD, some USD for those US trips, and all the small change you can't get rid of in each country. Why not use the same tap-to-pay cards that you use when at home, considering they work everywhere?
If you mean receiving money from someone while travelling, perhaps that is a more awkward case right now. But Paypal seems to work across many countries.
When it works, yes. I believe you about Europe, and perhaps Australia and Europe are politically and culturally friendly enough with each other that the businesses there made it work. But try Japan, China, Korea, for example. My Visa card wouldn't work in Japan, and in China UnionPay is pretty much the name of the game.
Also not to mention, every time I use my Visa card abroad, the fraud center tries to call me to "verify" transactions. They always call my US number (like, hello, I'm abroad, I probably can't take calls). My phone answers with a recording that says the only way to reach me is by e-mail. They don't e-mail (we're in the 21st century, hello). Then they disable my account, rendering me unable to pay for my meal in some foreign country where I can't speak the language. Then I have to call the Visa customer center, from the middle of the street, yelling my social security number and card number in open public space, "verify" some stupid transactions that I have no way to verify without logging into my account at a computer, to get my card reactivated again before I can pay and leave. Great security they have, making customers yell personal information over the phone instead of typing it in.
And yes, I tell them I'm leaving the country before I do. But they still do this. And their geography sucks. I told them I was travelling throughout Eastern Europe once and they disabled my card in Bosnia because they didn't know it was a part of the region I was travelling to.
So now, whenever I travel, I carry a spare $1K USD in cash or traveller's checks, split up and stashed on different parts of my person and luggage, for emergency situations like this, so at the very least I can buy a one-way flight ticket home if all other electronic payment fails. Cashless just doesn't work, yet.
Argh, that definitely sucks. That's not how it should work :(
Some of that seems bank related: my Australian bank emails me fraud notifications, I can add international cell numbers for txt if desired. Their website / app lets me tick off individual countries I'm visiting, and log-in to update it if I change my travel plans. If your US bank is using SSN for verification, that's dodgy :(
I feel you though, and I still take a (small) cash reserve when I travel. But I also take backup preload cards: Travelex offers Cash Passport, and both Qantas & Virgin offer Mastercard tap-to-pay built-in to their Frequent Flyer card (which also earns points). All three support Japanese Yen natively, so should work in Japan, but China and Korea are probably a no-go.
Some countries suck, though. Denmark has many misconfigured payment systems that block overseas cards (they misinterpret "Address Verification Not Available" as a decline), and you probably don't want to use cards in countries with high skimmer fraud. So we're not cashless yet, no :)
Who is behind the recent cashless movement? Which group? Who wants to profit? The huge population who will be on the looser side, is evident.
It's not surprising that lesser educated people would find it convenient to not have cash. Though those don't understand what they would loose in the first place. Cash means freedom, no one can spy on what you spend your money on. And a big part of the money is still spend every day in the real world on location, and the smaller part online. Also cash cannot loose value as easily over night or even vanish without a trace (banks are private and can go bankrupt). It's very easy to keep track of your spending, when you use cash for all location payments (banks of course would like to loan you money). And remember, there was a time when banks were a new thing, and to catch consumers they provided bank accounts and services for free. Back then, you got your money from your employer in cash. Suddenly, employers started to pay out the money only to bank accounts you were locked in to the back system and of course they started to charge you for bank account and all their "services" incl ATM and cards.
The dominant explanation among leftist economists in Europe is that banks wants to set negative interest rates on consumer bank accounts. But that only works when cash is eliminated. Otherwise, negative interest would cause a bank run because keeping the money at home in cash is literally more profitable than leaving it in the bank account.
The interest rate is already de facto negative, 0% interest rate and fees on checking accounts. People still use them, because they value the convenience.
Just replying to the last part -- I have two bank accounts, I don't pay any fees or charges whatsoever. Over here banks usually make the majority of profits from loans and mortgages, and investment fees. I suppose it makes sense to keep the daily banking charges to a minimum to ensure the happy customers will come to them with their financing needs.
My bank charges nothing for my accounts either. And I'm in Iowa.
Accounts are free, because the bank benefits from having your account in their ledger. They make loans and investments using that balance. Its the business they're in.
Banks benefit hugely when you use your credit card, they make money off the transactions. But also, they know that when you use your credit card you don't think about your purchase as much as when you use cash. With cash you watch it disappear, with a card its just some abstract numbers on a screen.
HN typically is in favour of privacy, and against surveillance. Then is equally enthusiastic about cashless apps which have a transaction record for every tiny amount. I don't understand :)
I'll generally buy most day to day items with cash and a card just for online. I don't find it any way inconvenient - there's an ATM at the supermarket and near all the shops I visit.
Amongst children and friends I don't see any evidence of a move to cashless either. They'll still take notes for a night out and make sure to leave enough for the cab home, or go to the hole in the wall first. They'll use a bank app to pay back a random £20 borrowed.
In person, I always use cash whenever possible. It saves business owners 3% or so on processing fees, so they can keep prices lower. I suppose there is the possibility that they might forget to declare that transaction and not have to pay federal taxes on it... but that wouldn't break my heart and potentially it would keep the money within the community.
"Cashless society" is a cute idea for tech enthusiasts living in urban areas (nothing wrong with that btw) but it is not feasible for most of the places where I find myself.
>It saves business owners 3% or so on processing fees
For a "cashless society" surely the fees will be regulated. FWIW, the EU recently limited interchange fees for credit/debit card transactions to 0.2% for debit cards and 0.3% for credit cards.
Add scheme fees (around $0.01 + 0.017%) and acquirer markup and debit cards don't really cost more than 0.5% and credit cards 1%. Often cash handling is a lot more expensive than that.
Not anywhere close to 3%. And anecdotally, I've never had anyone complain when I handle them a bundle of $20 bills.
Many banks don't charge fees for using machines that count coins that are dumped into them. However, some big banks are charging customers who deposit lots of cash. At one major bank, there's no fee for the first $10,000 deposited. After that, you'll pay 20 cents per $100. [1]
My bank generally charges 0.225% on bank notes deposits and 2.25% on coins deposit for commercial customers. The max per month without fees is 1000$, coins always have fees.
My bank is one of the big 5 canadian bank with assets in management over 500B$.
If you need to contract an armored courrier to move that cash, that's an extra very significant fee.
Still not anywhere close to 3%. And I'm not arguing that electronic payments don't have merit; just that the elimination of cash does not have appreciable merit to be feasible.
Also, cash has its builtin handling costs. It needs to be handled and counted by cashiers, which usually takes more time than an electronic payment transaction (iff the electronic transactions go smoothly).
I don't have any insight on how much costs this is actually causing BTW. But I recall handling costs for businesses being an argument in the debate to abolish pennies (in the US) or 1ct/2ct coints (in Europe).
> But I recall handling costs for businesses being an argument in the debate to abolish pennies (in the US) or 1ct/2ct coints (in Europe).
FWIW, the merchants in one city in Germany are currently trying to stop accepting 1ct/2ct coins, because the bank charges the merchants 1ct per coin to deposit, so they aren't making any money on it.
Speaking of losing a bank account...I'm curious how safe in the US bank accounts insured by FDIC are. I understand that it works well in the classic case of an insolvent bank where the problem is that the bank mismanaged its resources (too many bad loans, for example) and so doesn't have the money to cover deposits.
In such a case the bank has full records of everything that happened, and auditors could come in and figure out exactly how much is owed to whom.
But what would happen if online attackers got into a bank's systems and completely pwned the bank, having free run of the system for several months. Suppose they wiped all the live data, and managed to also wipe a few months of backup data.
How would FDIC figure out who lost what from insured accounts if the bank itself no longer has records covering that?
That isn't QUITE true. There are enough details that I can only speak in generalities, but in general, ordinary consumer accounts are indemnified against fraud and theft by the bank itself. US law requires that banks cover all or nearly all of a customer's losses to most sorts of fraud and theft (which it is depends on the kind of payment system) so long as it is a regular consumer account (small business accounts, for instance, may be out of luck) and the customer reports it within certain legally mandated time frames.
If the fraud is so extensive that the bank cannot afford to reimburse all of the customers, then the bank is undercapitalized and will be taken over by the FDIC.
I am puzzled to see the majority of comments here favouring an all bank/electronic solution that leaks an insane amount of metadata to the regular players [0] (bank, gov., etc.) because it's the opposite of what I usually read in the regular encryption submissions regarding privacy (and defence against the prying eyes of a government).
[0] who gives what amount of money to who and when for instance
What makes you think cash is anonymous? In China, ATMs record the serial numbers of the bills they dispense.[1] 80% of ATMs in Beijing, Shanghai, Nanjing and Guangzhou had this feature in 2013, and it was supposed to be rolled out nationwide by the end of 2015. There's no secret about this; you can ask the ATM to print the serial numbers of the bills it dispenses on your receipt.
Now being rolled out in China: ATMs with face recognition.[2]
Because not all cash transactions go through ATMs. When friends are splitting bills, or lending each other money, or two people are just selling a piece of furniture, the trail gets lost. In the US that's enough to establish reasonable doubt.
It is utterly trivial to launder cash to avoid this kind of tracking. Pay for a $1 pack of gum with a $20, and now you have $19 in clean cash. Rinse and repeat as necessary.
I am lucky to live in a safe area. I don't like the tracking capabilities of debit and credit cards. I don't want my bank to know what kinds of shops I like to shop in, or how I chose to spend my money.I don't want a profile.
As a result I love cash. The only time I use cards is online or larger purchases where I can't easily carry around that much cash.
Cash has been around for thousands of years. I doubt it can be removed from our society without a great deal of backlash. That is a very good thing in my opinion.
> I doubt it can be removed from our society without a great deal of backlash
This is the reason there's so much talk about going cashless these days. It's being propagandized so there's less friction when they decide it should happen.
Unfortunately with civil forfeiture, the situation with cash isn't much better. (E.g. the case of a black kid who carried $10,000 cash, his life savings, to move across the country, ended having the money taken by police and never returned, he was cooperative with officers and never accused or even arrested.)
There's been a deluge of anti-cash articles post Davos, and it's no mystery as to why. Not because it helps to prevent crime, or is more convenient, or any of these other reasons. Simply because you can't implement negative interest rates in a deflation event if your citizens have access to cash.
Banks want cash banned because they spend a lot of money handling it. Also a cashless economy where the banks own all the infrastructure is more opportunities for them to make money.
Basically we're setting up a system where private entities will be able to tax and control participation in the economy, and we're doing it without any sort of debate except over how annoying coins are. Personally I'm not very impressed.
I see this mentioned often, but it just isn't the case. In order to effectively implement negative interest rates, we will have to modify the exchange rate between physical cash and bank deposits to remove the incentive to hoard physical cash above the amounts needed for normal daily activity, but we will not need to ban it outright. This paper[0] from the International Monetary Fund explains in more detail the steps banks will take to implement the changes.
Whoa, the guys who wrote this paper should get treatment not dissimilar as people who helped design and build Nazi death camps.
People will just ditch banks and return to exchanging physical currency in their transactions. Why would you need electronic money if it incurs additional fees?
I agree about the motivation, partially. I think that reducing cash use in transactions is also of interest to regulators to make it more difficult for people to hide income from tax authorities, or to engage in illegal transactions. Some countries have already successfully implemented negative rates without banning cash, though they are certainly looking into it.
Regardless of your opinion if we're going to have or would want a cashless society or not - the article glosses over a lot of negative aspects.
The article mentions crime as a main motivator to shifting away from cash. The amount of robberies/muggings have gone down, but card theft and fraud is sky-rocketing. I would be interested to hear more about how kidnapping/extortion have fared in comparison as well.
The article mentions that retail crime will be just a memory after we've shifted away from cash. There has been plenty of retail card theft and fraud stemming from hacked retailed networks and hacked/rigged payment terminals during the last three years (2013-2016).
The article mentions that shifting away from cash would give the governments of the world a leg up in controlling our usage of money. I have nothing to object to there, but would like to add that it also gives private companies a leg up in controlling our usage of money as well. Both from the perspective of knowing where we spend and what we spend on - but also as they can terminate the contract to any retailer or payment processor at basically any time. Sure, not everyone is Wikileaks - but when you've broken the principle, it could happen to anyone.
People have been saying bitcoin here, but without spelling it out. Bitcoin is digital money. One of the most important properties is that you don't have to trust any other party to protect it for you. This makes it similar to cash. If you have cash in your teapot, someone has to physically force their way into your home to seize the cash. If your money is all digital in banks, it can be easily seized or frozen by the bank or the government. With bitcoin, you have digital money that cannot be easily siezed or lost due to a failure of some organization.
Unfortunately, nobody knows how to make it scale yet where it will be usable by a large number of people and still maintain this "trustless" quality. Hopefully all of the smart people currently working on the scalability issues will solve this problem and we can move to a digital cash future.
Recently my Debit Card didn't work anymore and the process to get a new one didn't work correctly. It meant I was without cash and possibilty to get my cash for more than 4 weeks. It showed my very hard how depent we are on those systems.
Yes, but my bank is a small one in my old home area. Now I am living in a far aways city without this bank. Also I was only on sundays in my old home area and had no possibilty to go there on a weekday.
I haven't seen anyone mentioning what happens in a cashless society if your card is broken/lost.
I've lost my card, went to a bank, showed my passport, got enough cash for a couple of weeks and got card replacement in a few days. What would happen if the society was cashless? Would I get a new card immediately?
Well the problem is you may not want your bank to gamble your money. And governments refused to separate financial activities of banks with their depots missions in most places. Leaving 98% of your actual money playing on markets on stuff you would not have wished to invest in the first place. Like the junk bonds and US mortage from 2007 that are still there in the bilans.
It is as if our arms are bent to deposit our money in less than trustable places without guarantees.
Are they trying to prevent banks from bankrupting or what?
You also may not want government to be able to seize your money like it was done in Malta or in Greece.
Banks are privately owned entities I do not trust. I have the right to not entrust my money to thieves and parasites without a minimum of security on my savings. Especially when they could bankrupt.
The difference in law between a bank and any other company that looks after your money for you (for example, a pre-payment for goods) is that a bank is allowed to add your money to its central assets and do what it likes with it, whereas any other company has to keep your money in a separate account until it returns either it or the goods you wanted in exchange. Lots of people think this is the other way round. This means that if a bank goes under, the bank's creditors get to keep your money, and you get to claim back under your country's guarantee scheme, whereas if a different company goes under, your money in its separate account is protected from creditors, and should be returned to you.
A while back I got a random letter written in German that I had to ask a friend to translate for me. Turns out that a few years ago I had pre-paid for some computer equipment that was under development in Germany. The company director had played fast and loose with the rules and used my money to (fail to) develop the product, before the company went bankrupt. Because of this breach of the rules, the company lost its limited status, and the director was personally responsible for the debt to everyone.
Even if "cashless" works perfectly, now you've constrained the entire economy to either the formal electronic currency or barter. Or maybe something like wampum, an informal improvement on barter.
One need only look to the history of the United States before the greenback to see it.
People do business outside the formal economy. They do cash only business. Unemployed/underemployed don't simply stop breathing. Since we have a high U6 number, the hubris of even considering this is breathtaking.
Stretching a metaphor too far, "cashless" is censoring the economy. What happens when the economy perceives this and routes around it?
Visa and mastercard are already skimming a portion of all payments via their systems. So if we are moving to a cashless society, should this not be state owned infrastructure? Imagine a future where no cash exists and the large banks and card networks coown the infrastructure for all payments, taking their cut. I feel that cash is an important competitor to prevent this from happening. but unfortunately as with most things it's use it or lose it.
The article claims Swedes and Sweden "are making the shift". That's currently false, but it's something that could happen. Perhaps I'm reading it too strictly, but as they were mentioning the National bank of Korea in the same paragraph.. The current set of laws and regulations in Sweden mandates that cash are legal tender and that there is an obligation for the Riksbank (National bank) to make sure there is "enough cash" available.
There is currently no proposed changes to those laws in the direction of scaling down cash. There are however proposed changes in the making that will make cash more available than they currently are. The chief of the Riksbank (National Bank / "Federal reserve") have an article in one of the major newspapers about this very subject, published today [1].
If you read the linked article it's more about a social shift than driven by law. I.e, many individuals are foregoing cash for cards, to the point where churches and 'homeless' now accept cards.
I have read the linked article and I know it talks about the social aspect - that card usage is very high.
What I'm saying is that the way the paragraph is currently written is not clear on that and could be interpreted as Swedish abolishing or thinking of abolishing cash from a legal perspective - especially if you do not read the linked NyTimes article.
"Stefan Wikberg, 65, was homeless for four years after losing his job as an I.T. technician. He has a place to live now and sells magazines for Situation Stockholm, a charitable organization, and began using a mobile card reader to take payments, after noticing that almost no one carried cash."
This excerpt is from the article [1] linked in the Bloomberg article [2]
Interestingly Switzerland goes into both directions. We are going more and more into a cashless society and also our banking system is quite modern. On the otherside the amount of 1000Fr bills issued in switzerland is getting more and more. It means cash's main purpose will move to bigger amounts of money.
A no-cash system, beside all the other downsides, reduces and sometimes outright removes the ability for humans to alter and/or workaround the system when systematic failure modes are discovered. And that's just unintended consequences, forget about perverse incentives.
This is the same reason I think augments that posit privacy is unnecessary because enough downstream controls will somehow account for all "bad" things that could happen. It's a scam, pushed by unscrupulous hucksters for their advantage at the cost of everyone else.
Here in my small German town that I am living in. Shops that accepts debit cards only made an appearances about 15 years ago. Before that, cash is the only way.
Credit cards are still very much not in vogue in my town. Actually, even in larger shops like Ikea, credit cards are not accepted.
That mirrors my impression as well - here in Germany credit cards just became mildly common but customers are still far from being expected to carry one. Debit cards however, are very common, however they won't help you when getting a beer at sunday league football or visiting the local bakery.
>Debit cards however, are very common,
Agree. Sadly most of the times the stores are only accepting the shitty domestic "girocard" scheme and not international brands of debit crds.
>visiting the local bakery.
Kamps usually accepts credit cards, even contactless.
Must be quite rare then, the Ikeas in Köln (x2), Düsseldorf, Essen are still sans credit card. The ones just over the border in Holland do accept credit cards.
The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. The public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone.
...
As an additional firewall, a new key pair should be used for each transaction to keep them from being linked to a common owner. Some linking is still unavoidable with multi-input transactions, which necessarily reveal that their inputs were owned by the same owner. The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner
Only if I publish my address and leave patterns behind. Agree that it's debatable then again, wouldn't you agree that in a relative sense, pseudo-anonymous is better than bank accounts tied to your name?
It depends. Pseudo-anonymity can give a (possibly false) sense of security. With bank accounts tied to your name, at least you definitely know that "they" can trace it back to you at every time, whereas with pseudo-anonymity you might never know if you're fully anonymous.
Good point there. Pseudo-anonymity (or should I say, pseudonym-based) is the first step towards better privacy and decentralised transactions, not the solution. Still, we have the means to do so, if we really want to. With bank accounts, everything traces back to you by default without much improvement to be done. Different systems, different purposes.
>Even if these sorts of crimes are replaced by electronic thefts of equivalent value,
Why would they be of equivalent value? Consider how much harder it was to steal $100 million in cash, how much more planning it took, if even possible.
Sure, outright theft may become less lucrative. But if cash completely goes away, black markets can and probably will start using their own medium of exchange.
Cards are sometimes faster but using my card usually goes like this:
Swipes card in reader, producing a loud error noise
"Nope, you have a chip. You need to stick it in the bottom. Hit next. Now enter your PIN. Do you want cash back? Hit okay. Let me see your ID, please."
Shows ID next to card so they can compare
"Sign this receipt, please. This one's your copy."
American, I guess? Me too, but I live in the Netherlands and cashless payment here is so much easier. If it's under an amount you set (say, €25/day) paying is as simple as holding your PIN card near a reader for a few seconds. If it's over the limit, do the same but then you have to authorise with a PIN.
Ever seen a busy pub or coffee shop where serving is being slowed down while they wait for the 1 or or two card readers.
If your not grown up enough to mange your fiances so you can keep £50 -100 in change to mange incidental day to day expenses dont be surprised if people treat you with condecension.
Electronic (particularly Paywave/Apple Pay/NFC) is miles faster than me & a shop assistant both mucking around counting coins, let alone queueing up at ATM machines or the "don't you have anything smaller?" conversations.
He says having moved from New Zealand to the UK in the last 6 months. Cash is a constant PITA here for me.
I'm of the generation where as kids ('90s) we used EFTPOS (electronic debit system which took an absolute maximum of 10 seconds including manual retailer and customer actions) to buy ~US$0.30 chocolate bars from corner shops. That was helped by both the retailers and customers essentially paying no transaction fees. (Doesn't apply to PayWave, but that's another story and the customer expectations are the same)
— The largest cash note is 1000 Fr. (slightly more than $1000). It is readily accepted everywhere and I can pay for coffee with it and get change. (The coffee will be around $4, or $7 for vanilla latte in Starbucks).
— My ATM daily cash withdrawal limit is 75000 Fr. (not a typo). I dream of hitting it once, but I'm not that rich.
— I can go to the nearest bank and buy a physical gold bar, from 1g to 12 kg, for cash, no questions asked, no papers needed. And sell it later at the same place, with only a nominal fee taken (if still in original package).
And I like it this way. When I travel in any other country, it looks strange to me when even a 100€ bill is frowned upon and probably won't be accepted.