Is this the last decade of cash?
The corona pandemic is not helping. Belgian media is picking up the Australian news about the coronavirus found active 28 days on banknotes, without understanding that the 28 days is on the Australian polymer and paper banknotes, while Euro banknotes are made of cotton fibers on which the coronavirus gets inactive rather quick. https://medicalxpress.com/news/2020-04-euro-banknotes-safe-coronavirus-ecb.html
You are touching so much in shops, including the pay terminals everyone is touching, that cash won't add much risk.
Until this year, I used to not care, and pay everything electronically.
But in March I became the victim of an identity theft. My bank account was frozen, my bank cards and payment app blocked. Opening new bank accounts or credit cards was impossible due to being on a blacklist.
My employer could not pay my salary in cash. For most professions this is forbidden by law since 2016.
Friends lent me cash. But I discovered cash was refused at supermarkets, shops, public transport, parkings, fuel stations, hospital, physiotherapist, online webshops, Uber, Deliveroo, etc. Sometimes because of corona anxiety, but often already from before 2020.
Prepaid cards could be a nice solution. But even while they are debit cards, in Belgium they seem to be refused where credit cards are refused, since they are Visa or Mastercards cards. These are refused in many Belgium places, since merchants don't like the higher costs. Not many prepaid cards allow charging with cash. And their availability is in recent decline: this year at least the following prepaid cards stopped or are announced to stop: Carrefour prepaid Flex card, BNP and Hello. The decline might be due to new very strict EU anti-money laundering laws. The anonymous prepaid cards (and generic gift cards) are now restricted to 100 euro maximum recharge in their lifetime and 50 euro payments.
Cryptocurrencies are also in theory a nice solution. But their acceptance in Belgium is extremely limited. Thanks to Takeaway accepting bitcoin, I could order delivery from many local snack restaurants.
But I discovered that bitcoin and most other cryptocurrencies, while having an "anonymous" reputation, are actually only pseudonymous and extremely open and transparent: for every transaction the origin address, destination address, amount and timestamp are recorded for eternity in a public ledger for everyone open to consult. When I buy something, the merchant can see how many coins I have in my wallet address. Buying, spending or selling coins are activities that can get your name connected to your addresses. Developers try to solve this privacy issue, but I'm afraid the war on anonymity (related to the war on cash) will crush that before cryptocurrency payments become popular.
So, my identity theft experience has awakened me: sharing your personal details in so many places caries a lot of danger. Think about it: while the law became more strict, there are still many (online) shops and restaurants taking knowledge of your credit card number, expiry date, CCV and your name. That's still enough information to do fraudulent payments in many places.
The cashless society is a surveillance society, with every payment traced. And it creates a lot of dependencies: electricity, internet, and permission by the banking and payment system. Once you are on a blacklist, even if you did nothing wrong, but somebody pretended to be you and did fraudulent payments, you are screwed for at least months.
So, now that I'm finally off the blacklist, I opened several bank accounts. That will not help for all issues, but still: having only 1 bank is really dangerous.
And from now on I pay everything possible with cash. Not just to keep my personal details safe, but also to keep the cash usage statistics high. Did you notice that the financial sector is regulary reporting the cash withdrawals decline? They report both the total amount withdrawn and the number of withdrawals.
I learned that the bank and payment processors are fighting a war on cash and they are actively lobbying the government for a reduction of the cash payment limit to 50 euro. Yes, an insane fifty euro! The banks are lazy about cash and want to impose negative rent without risking a bankrun. No cash is no bankrun. The payment processors just love the percentage they get from every payment.
Currently the acceptance of euro banknotes and coins for debts is compulsory by European law. But many merchants violated the law and we had at least one Belgian minister ignoring the enforcement. See e.g. this article from 2019: https://www.bruzz.be/samenleving/no-cash-doet-intrede-brusselse-horeca-2019-05-10
The law has exceptions, e.g. for security reasons such as a pandemic. After the pandemic I will try to report all cash refusing merchants.
Merchants that refuse to accept cash payments can be reported at https://meldpunt.belgie.be
. But I guess it is better to wait until after the pandemic.
We need to defend the right to use cash. And a crucial action to avoid the end of cash is to keep using it as much as possible.
Every time you pay with a bank card or app, you contribute to a cashless future where:
- banks, payment processors and government have total control over your finances (see protestors in Hong Kong preferring cash payments).
- every financial transaction is monitored and logged forever.
- your financial data will be used to calculate your social credit (already happening in China, that is eager to export that concept and technology).
- every payment can be blocked (already happening with webcam sex workers).
- personae non gratae can be totally financially blocked.
- tourists have a hard time paying. E.g. in China, most payments, including toilets, need to be done with the WeChat app, but without Chinese bankaccount it's hard to enable WeChat payments.
- you are in trouble when electricity, networks or payment systems go down.
- banks can easily charge negative rent because you can't withdraw your money.
- when banks or governments are in need of money, they easily take a percentage of your money (like they did in Cyprus with the bank deposits above 100000 euro, and as they initially wanted to do under 100000 euro too).
- people spend more, up to the level financial mismanagement, because cashless payments disconnect the pleasure of buying from the pain of paying. Studies show that psychological effect already. See e.g. "consumers are more likely to buy unhealthy food products when they pay by credit card than when they pay in cash." in https://academic.oup.com/jcarticle-abstract/38/1/126/1798815
- homeless people and charities are less able to get donations. Experiments and data are showing the effect already now people are carrying less cash.
- Some economic and socio-political implications, such as "Eliminating cash may decrease the (observed) GDP", are discussed in https://www.sciencedirect.com/science/article/pii/S0176268019301843
Use cash or lose it!
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