Heading to ward a cashless society

[Pliny]

Very interesting article. It seems a cashless society is our future. What will it invent to replace cash and circumscribe government interventionist policies.

Swedens War on Cash Runs Into a Wall and a Heroic Bank

Posted on Circle Bastiat, Thursday, December 27th, 2012

The war on cash in Sweden may be stalling. The anti-cash movement has been vigorously promoted by major Swedish commercial banks as well as the Riksbank, the Swedish central bank. In fact, for three of the four major Swedish banks combined, 530 of their 780 office no longer accept or pay out cash. In the case of the Nordea Bank, 200 of its 300 branches are now cashless, and three-quarters of Swedbanks branches no longer handle cash. As Peter Borsos, a spokesman for Swedbank, freely admits, his bank is working actively to reduce the [amount] of cash in society. The reasons for this push toward a cashless society, of course, have nothing to do with pumping up earnings from bank card fees or, more important, freeing fractional-reserve banks from the constraints of bank runs. No, according to Borsos, the reasons are the environment, cost, and security: We ourselves emit 700 tons of carbon dioxide by cash transport. It costs society 11 billion per year. And cash helps robberies everywhere. Hans Jacobson, head of Nordea Bank, argues similarly: Our mission is to make people understand the point of cards, cards are more secure than cash.

Fortunately, it seems that the Swedish people are not falling for the anti-cash propaganda spewed by private bankers and Riksbank officials and are resisting the trend toward a cashless economy. It is reported that last year the value of cash transactions in Sweden were 99 billion krona which represented only a marginal decrease from ten years ago. And small shops continue to do one-third to one-half of their business in cash. Furthermore a study of bank customers satisfaction released by the Swedish Quality Index in October 2012, indicated that the satisfaction index was pulled down among customers of Swedbank, Nordea and SEB by their policy of eliminating cash transactions at their bank branches. Even more heartening is the fact that Handelsbanken, the largest bank in Sweden, is committed to serving consumers who demand cash. As Kai Jokitulppo, head of private services at Handelsbanken, puts it:

As long as we know that our customers are asking for cash, it is important that we as a bank [are] providing it. . . . We see places where other banks are taking other decisions, we get customers from them and positive response.

Fewer then 10 of Handelsbankens 461 branches currently do not handle cash and the banks goal is to have cash in every branch by the first quarter of 2013.

[Boges]

I very rarely use cash. Mostly use it when I go out with friends splitting a bill or for Tim Hortons.

I find it weird seeing people use cash to buy groceries or gas.

[GostHacked]

My thoughts.

The reasons for this push toward a cashless society, of course, have nothing to do with pumping up earnings from bank card fees or, more important, freeing fractional-reserve banks from the constraints of bank runs. No, according to Borsos, the reasons are the environment, cost, and security: We ourselves emit 700 tons of carbon dioxide by cash transport. It costs society 11 billion per year. And cash helps robberies everywhere. Hans Jacobson, head of Nordea Bank, argues similarly: Our mission is to make people understand the point of cards, cards are more secure than cash.

When they talk about bank runs, the threat there is that they physically do not have the cash on hand. There are simply not enough physical dollars to match the digital money that has been created.

This allows those who create the money to have more control over it. Your bank has an error or you experience identity theft, causing your debit/credit card to not work. Also I work in IT so the financial transaction side of things is a pain in the ass. A system goes down causing debit/credit payments from working, so cash is needed or you wait for the system to come back up.

Digital currency does not make things more secure as we see major institutions around the world getting hacked on a daily basis. Being so dependent on technology and having your banking information accessable from a smart phone through an app is a security risk. The more things are connected the more problems you will see.

I will also contest that it costs more 'money' to print money'.

Printing money requires resources to operate. Digital dollars also requires resources to operate. The cost of transporting physical dollars is now replaced by the cost to store digital dollars. Servers and networking equipment costs money and takes a lot of resources to make. Now you have to consider redundancy so you need two of everything. That already is going to cost money and resources (pollution). The servers stay on 24/7 and are required to have a UPS solution to keep the units powered on. Keeping units powered on takes a lot of electricity consumption creating more pollution at the generating station instead of through a vehicle.

There is a need now for cyber security and keeping the digital dollars safe. Your servers and protection software/hardware can run you a lot of money as well. A simple appliance like nGenius' Netscout costs a few thousand dollars. Then you are looking at maintenance feeds, hardware/software support which all require resources and regular maintenance. With a few key strokes it is much easier and harder to trace when digital money is stolen.

All these digital dollars rely on a working Internet infrastructure, which on a city wide level can and does get expensive. Let alone a country or global scale.

I do like my debit card, but in some cases I like to use cash for speedy service. Much easier when paying for coffee with cash as the cash does not care if the debit system is not working because of whatever reason. Once cash is in your hand it requires no energy either aside from handing the person behind the counter the money.

[eyeball]

How will friends conduct personal transactions such as paying for a bet on a hockey game or hand a tip to someone? Will we use cards that can connect like a couple of smart devices that exchange data when they're touched together?

Follow the money?

Why do I get the sense that in a cashless society it will be easier for the state to track down and crack down on the little guy but big offenders will still go scotfreo?

[Boges]

How will friends conduct personal transactions such as paying for a bet on a hockey game or hand a tip to someone? Will we use cards that can connect like a couple of smart devices that exchange data when they're touched together?

Follow the money?

Why do I get the sense that in a cashless society it will be easier for the state to track down and crack down on the little guy but big offenders will still go scotfreo?[/size]

Many newer cell phones (Not shitty iPhones yet though) have something called NFC (Near-Field Communications) where you can transfer information by simply tapping phones together.

You could have an App where you can set a specific amount of money for NFC transfer and just give it to your friend.

Edited March 11, 2013 by Boges

[Guest Derek L]

How will friends conduct personal transactions such as paying for a bet on a hockey game or hand a tip to someone? Will we use cards that can connect like a couple of smart devices that exchange data when they're touched together?

Follow the money?

Why do I get the sense that in a cashless society it will be easier for the state to track down and crack down on the little guy but big offenders will still go scotfreo?

I agree……….Not sure I like the idea either………Anything the reduces choices of the individual is clearly a reduction in freedom……..

[GostHacked]

You could have an App where you can set a specific amount of money for NFC transfer and just give it to your friend.

Maybe for large amounts, but it's easier to pull a 10 out of the wallet and hand it over. These transactions will eventually be tracked and I would even say taxed.

[Boges]

Maybe for large amounts, but it's easier to pull a 10 out of the wallet and hand it over. These transactions will eventually be tracked and I would even say taxed.

You could easily claim it as a gift.

You don't get taxed on Paypal transactions do you? You don't automatically have to pay tax on personal cheques. (unless you get audited).

Cash has it's place and I doubt we'll see it gone from our society anytime soon, but just like personal mail delivery, it'll keep being less relevant in society as the years pass.

Edited March 11, 2013 by Boges

[eyeball]

Well, I think they should track the transactions of the rich and powerful first given that's where most of the money is.

[Boges]

Well you can't follow people's transaction based on their income.

[GostHacked]

I agree……….Not sure I like the idea either………Anything the reduces choices of the individual is clearly a reduction in freedom……..

One reason that 50 and 100 bills are not accepted is the counterfeit thing. But I would say 5's and 20's are counterfeited more. One reason is some of the businesses do not hold a lot of cash on site because of theft, so they cannot make change for a 50 or 100.

The laundry machines in the building use these chip cards where I have to fill it up using my debit or credit card, electronic transfer, tracked ect. And you can bet the machines record every transaction when I do my laundry. The card would have a specific ID to it. When this method came it, the savings were passed on to the people who use it. Both washer and dryer went up 50 cents/load.

Eventually all of us are going to be in a situation where the electronic system goes down and you are stuck in line waiting for the damn thing to come back up. In the meantime, if you got cash ... but then again the cashiers can't do much math and cannot add a few numbers together and calculate some kind of tax.

I was in BC last summer and I had to give my credit card before I started pumping gas. The reason was that an incident happened at that gas station where a car was stolen with a kid still inside it. From what I understand major injuries or death resulted. So I asked the clerks 'what is preventing me right now from going out and stealing a car right now' ? I got blank stares.

Had a trip to Halifax recently and when I got back to the airport in Ottawa to pick up my car I had to use my credit card to get out of the lot. Not so much an issue but being 11pm on a Friday night, with no attendant in site, should I have an issue with the stupid payment machine, I am stuck in the lot.

But I believe you are right, it is about control. Much more than people think.

[eyeball]

Well you can't follow people's transaction based on their income.

Didn't Flaherty just say the other day we should start following the money that wealthy tax cheats move offshore?

[Guest Derek L]

One reason that 50 and 100 bills are not accepted is the counterfeit thing. But I would say 5's and 20's are counterfeited more. One reason is some of the businesses do not hold a lot of cash on site because of theft, so they cannot make change for a 50 or 100.

The laundry machines in the building use these chip cards where I have to fill it up using my debit or credit card, electronic transfer, tracked ect. And you can bet the machines record every transaction when I do my laundry. The card would have a specific ID to it. When this method came it, the savings were passed on to the people who use it. Both washer and dryer went up 50 cents/load.

That’s crazy……….I haven’t had to do my laundry in a shared, paid, facility for quite some time………….Always remember digging through the couch for nickels and dimes come laundry day……..

I was in BC last summer and I had to give my credit card before I started pumping gas. The reason was that an incident happened at that gas station where a car was stolen with a kid still inside it. From what I understand major injuries or death resulted. So I asked the clerks 'what is preventing me right now from going out and stealing a car right now' ? I got blank stares.

It’s been that way for awhile now……The Lower mainland use to be famous for gas & dash…….Then one attendant got himself killed trying to intervene on one attempt……….BC Federation of labour got involved, and now all gas stations have to have prepay, two or more people working in them late at night or they are set-up like a WW II pillbox in which you have to pay through a bullet proof glass drawer, well not being aloud within the store………..A real pain in the ass late at night if you want a specific item and the gas jockey isn’t the most adapted to the English language…………

[Boges]

Sure, but do you really want the CRA to start scrutinizing every single transaction you make from your Chequing account?

Only rich people should be subjected to this because they can afford it? Seems like harassment no matter what.

[Boges]

I would have no problem with paying before you pump. I use a Petro-Points CC that allows me to have a discount on gas and all I have to is tap a card on a sensor. When NFC technology catches up I'll soon just have to whip out my phone.

These are nice conveniences that I welcome. Simply having a smartphone allows for some Big Brother to watch over you. Google Now knows when I'm at work or not and tells me how long it'll take to get home.

[eyeball]

Sure, but do you really want the CRA to start scrutinizing every single transaction you make from your Chequing account?

Only rich people should be subjected to this because they can afford it? Seems like harassment no matter what.

No but since I know that's the world we're moving towards anyway I figure we should concentrate our efforts where it can have most effect. Rich people should be subjected to it because they have the most money. Maybe they could volunteer to be subjected to it first to provide a good example for the rest of us - like a noblesse oblige thingy.

The state isn't going to get much bang for it's buck shaking down the prole's digitized loonies and twoonies.

[eyeball]

I would have no problem with paying before you pump. I use a Petro-Points CC that allows me to have a discount on gas and all I have to is tap a card on a sensor. When NFC technology catches up I'll soon just have to whip out my phone.

These are nice conveniences that I welcome. Simply having a smartphone allows for some Big Brother to watch over you. Google Now knows when I'm at work or not and tells me how long it'll take to get home.

You don't have some creepy little greeter that is compelled to run out and hover about while you self-serve? I'd rather just ignore the camera myself.

[Boges]

No but since I know that's the world we're moving towards anyway I figure we should concentrate our efforts where it can have most effect. Rich people should be subjected to it because they have the most money. Maybe they could volunteer to be subjected to it first to provide a good example for the rest of us - like a noblesse oblige thingy.

The state isn't going to get much bang for it's buck shaking down the prole's digitized loonies and twoonies.

Initially the example was given about friends giving each other money. Lets say, in this society of zero cash, Someone needed help moving or painting a room and he paid his friend $20 or so for his trouble through a cheque or a futuristic NFC Cash transfer. It would suck if the CRA chimed in to the friend that got the $20 and said where's my cut?

How about kids that offer to shovel a driveway for a nominal fee, what about that?

As cash usage dwindles, I'd imagine the government would end up saving money for not having to produce so much actual currency.

How much does getting rid of the penny save? IMO we should get rid of the nickel and dime too.

Edited March 11, 2013 by Boges

[eyeball]

Initially the example was given about friends giving each other money. Lets say, in this society of zero cash, Someone needed help moving or painting a room and he paid his friend $20 or so for his trouble through a cheque or a futuristic NFC Cash transfer. It would suck if the CRA chimed in to the friend that got the $20 and said where's my cut?

It sure would. It would also make buying a lid a pain in the butt.

I guess I'm holding out some hope, that if the state squeezes the freedoms of the wealthy and influential first, they'll squeeze back and reduce some of the justifications the state uses to squeeze all of us. I subscribe to a trickle-down theory of decency and honesty - I believe that by concentrating efforts to make everyone accountable for their actions and deeds at the top of society that decency and honesty will trickle down throughout the rest, just like wealth is supposed too. It also seems reasonable to think that wealth might actually start trickling down as advertised once the decency and honesty start moving.

We just need to restore the meaning of oblige that the noblesse were responsible for. Like I said I live in hope but probably in vain.

How about kids that offer to shovel a driveway for a nominal fee, what about that?

I used to make a small fortune doing that.

As cash usage dwindles, I'd imagine the government would end up saving money for not having to produce so much actual currency.

I imagine they'd still manage to cock things up.

How much does getting rid of the penny save? IMO we should get rid of the nickel and dime too.

We should have a Potlatch.

[Peanutbutter]

A real pain in the ass late at night if you want a specific item and the gas jockey isn’t the most adapted to the English language…………

This is why so many people want it to be mandatory for new immigrants to be able to speak and write English.

[TimG]

A cashless society does not mean anonymous transactions must end.

Anyone who gives someone a store gift card is using anonymous electronic cash.

[Pliny]

A cashless society does not mean anonymous transactions must end.

Anyone who gives someone a store gift card is using anonymous electronic cash.

A gift card is more like a coupon for a certain store and not as universally redeemable as cash but I understand the

confusion between coupons and cash. Money, in the fullest sense of it's meaning, went from being a commodity to

redeemable notes for the commodity, to irredeemable notes (paper money), to electronic digital entries and all of them

are called money.

Anonymous transactions will never end, a "medium of exchange" will generally evolve. Its purpose - the facilitation of

trade.

The point of the OP though is how Government's intervention, creating fiat legal tender, becomes a problem for them that requires further intervention and that they will, in order to create the cashless society, be forced to redefine legal

tender laws to suit their demands.

[Pliny]

I guess I'm holding out some hope, that if the state squeezes the freedoms of the wealthy and influential first, they'll squeeze back and reduce some of the justifications the state uses to squeeze all of us. I subscribe to a trickle-down theory of decency and honesty - I believe that by concentrating efforts to make everyone accountable for their actions and deeds at the top of society that decency and honesty will trickle down throughout the rest, just like wealth is supposed too. It also seems reasonable to think that wealth might actually start trickling down as advertised once the decency and honesty start moving.

Excellent concept. You can tell the level of "fairness" and "trust" in a society by how just the government is.

We see some degradation of the concept of fairness and trust in our society. By fairness I don't mean sharing to the

point of an achievement of equality, I mean how we treat each other. If government is unfair, and they mean trying to

achieve equality by fairness, and you can't trust what they are going to do because they may be just equalizing things

and not considering the fair treatment of an individual and you don't understand the complex and copious laws they enact

that leave you scratching your head then society will tend to be unfair and unjust. As an example, suspending a child

from school for nibbling a pop-tart into the shape of a gun is not fair or just. Is there a fear that he will later in

life nibble a pizza into the shape of an AK-47? (Plagiarized that from Mark Steyn actually)

Edited March 12, 2013 by Pliny

[TimG]

A gift card is more like a coupon for a certain store and not as universally redeemable as cash but I understand the

confusion between coupons and cash.

There is no confusion. Gift cards for large stores can be used a medium of exchange. The government could also set up similar system that anyone can 'redeem' at any store connected to the government computers. The result is digital cash that is a completely anonymous.

My point is digital cash and anonymity are not mutually exclusive.

[Boges]

Is it legal for the Government to raid someone's Paypal account without cause?

BTW a cashless society was predicted in Revelations. Just a though.