[Reader-list] Brett Scott: Hang on to your cash! (Guardian)

[Patrice Riemens]

'NaMo' last argument for this not entirely sucessful demonetization 
drive was to fire up digital payments substituting for cash. Brett Scott 
points out to why this maybe not such a good idea - but meanwhile, our 
-NL- own Queen Maxima (herself a former banker!) has declared "Cash is 
the ennemy" ...



Original to:
https://www.theguardian.com/commentisfree/2017/sep/13/cash-digitise-payments-money-cashless

Hang on to your cash. This dash to digitise payments is dangerous.
Banknotes and coins are a public utility, and companies make no profit 
from their use. Hence the drive for cashlessness – and with it, greater 
surveillance.

By Brett Scott, The Guardian, Wednesday 13 September 2017



Sweden leads the world in cashlessness. In doing so it also leads the 
world in opening its citizens up to fine-grained financial surveillance. 
“Cashless society” is a euphemism for a “bank payments society”, in 
which every transaction must be passed through a complex of banks, card 
companies, phone providers and payments apps.

In granting financial corporations complete control over the money 
system, our every economic interaction ends up logged in their databases 
for analysis. Sweden may end up being the first society in which every 
private economic action is recorded.

Cashlessness is often presented as natural “progress”. Indeed, a recent 
BBC article about Sweden’s digital payments fetish asks: “So how did the 
Nordic nation get so far ahead of the rest of us?”.As if cashlessness is 
a state we are all willingly racing towards.

Commentators often suggest the phenomenon is driven by “consumer 
demand”. It’s partially true. Ask a room of people to raise their hands 
if they wish to be able to use digital payment, and most will do so. But 
if you reframe the question as “Do you want to not have the option to 
use cash?” people are more hesitant. We like new options, but we don’t 
like having options removed.

Automobile evangelists in the early 1900s pitched cars as the transport 
of the future, superior to other forms, such as horse-drawn carriages. 
The bicycle, though, has remained stubbornly persistent, despite the 
car’s greater speed, distance and carrying capacity. That’s because the 
bicycle is more efficient in certain contexts, and requires lower 
maintenance. Cars have come to cause congestion, pollution, accidents 
and urban sprawl, and nowadays we see the simple bicycle as one solution 
to the problems caused by the “superior” car.

So it is with cash. The digital payments industry tries to cast cash as 
the horse-drawn carriage of payments; but cash is the bicycle, more 
flexible, resilient and convenient in certain settings, especially 
informal ones.

People don’t “want” cashlessness any more than they “want” a society 
where you’re allowed to use cars only. And once people glimpse the dark 
side of bank digital payments – with surveillance, massive increase in 
financial cybercrime, and exclusion of people who cannot access the 
formal banking system – they will probably want cash to remain.

There are, however, certain institutions – banks, payments companies, 
and governments – that really do want the death of cash. They are waging 
a war on cash, publicly smearing it as an outdated social evil while 
contrasting it against a romanticised vision of digital payments. Most 
ordinary people do not see cash as a “social evil”. They see it as a 
normal public utility. Private companies, though, see public utilities 
as competition. The only reason Visa ran its “cashfree and proud” 
campaign is because Visa loses revenue when you use cash.

Engineering public consent for cashlessness is a subtle process. People 
may indeed enjoy a new payments app or contactless card, but financial 
institutions then use that to justify the gradual removal of the cash 
infrastructure – such as ATMS – in order to deliberately make cash 
harder to use. This feeds back, making digital seem relatively more 
convenient, “inspiring” more people to choose it.

A similar self-fulfilling feedback loop can be seen in the European 
commission’s recent inquiry into implementing cash thresholds that would 
set limits on the size of cash transactions. Thresholds seemingly strike 
a compromise, hindering criminal groups, which may use large cash 
transactions, while having minimal impact on legitimate businesses, 
which use small cash transactions. Nevertheless, if you wanted to slowly 
create a cashless society, thresholds would be the ideal way to 
incrementally implement it. By gradually lowering the threshold over 
time, authorities slowly wean people off cash by making it increasingly 
harder for them to use it. It acts as a ratchet mechanism, pushing them 
into the arms of the digital payments industry.

Maybe I’m wrong. Maybe ordinary people in Sweden do passionately desire 
cashlessness, and have driven it themselves. Maybe they are not aware of 
the downside of digital payment, or don’t care because they have 
relatively high levels of trust in their government and financial 
institutions. But this issue goes beyond Sweden. The Indian government 
recently tried to force-feed cashless society to its citizens through 
its botched demonetisation programme, which hit the poorest Indians 
hardest.

And then there is the rapid digitisation of China’s money system. Two 
services, WeChat and Alipay, have gained massive ground in mobile 
payments. There are enormous surveillance implications to having 
hundreds of millions of transactions being routed through two companies 
that the Chinese government has access to. Payments are one of the last 
data frontiers. Your Facebook profile presents your public persona, but 
in your private payments you “put your money where your mouth is”.

States having access to your payments data opens up potential for 
economic censorship. Want to disrupt a major protest in a country where 
everyone uses two major payments providers via phone apps that give 
location data? Order the companies to not process payments from any 
phone within the protest area.

Corporations too are drooling over the potential to monitor customer 
payment data. They can pass it through their machine-learning systems to 
understand your traits and manipulate you with ever-increasing levels of 
subtlety.

This is the world we celebrate when we congratulate Sweden for locking 
itself into a cage of digital payment. Maybe we should be more 
circumspect.

• Brett Scott is a campaigner and former broker