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The end of cash?

15 September 2017

Does anyone remember cash?

You know, that collection of notes and coins which allows for anonymous transactions and the convenience of working anywhere, any time -- regardless of the state of the nation's power and communications infrastructure?

Well it seems that pretty soon, those memories will be just that -- memories.

Increasingly, the world is moving towards a cashless society and I think we have to decide whether that's a good or a bad thing.

Although New Zealand was, for a while, a world-leader in cashless transactions, we've recently been overtaken by Sweden. Last year, cash transactions made up just 1% of the value of all payments in that Nordic nation.

Banks and governments are quick to promote the benefits of a cashless society. Less risk of being robbed, faster processing at the check-out, cleaner and more sanitary, cheaper than the costly process of replacing bank-notes and coins as they wear out -- it seems the positives are almost endless.

Indeed, one could be forgiven for thinking that this was true. Just slap your Pay-wave card on the EFTPOS terminal and you're done. Wave your iPhone and let the Apple-Pay system do the hard work. What could be simpler?

However, little is spoken of the downsides to this cashless society.

For instance, last week we saw a massive coronal mass ejection (CME) take place on the surface of the sun. If we'd been in the wrong place at the wrong time, this event might have knocked out our power and communications grids for quite a while. Without cash, people would have been powerless to pay for anything and if that outage was protracted -- how many of us have sufficient reserves of food in the cupboard to survive without buying some more bread, milk etc -- especially when you realise that your fridge and freezer might also be out of action.

Then there's the issue of privacy.

Cash transactions are one of the last bastions of privacy we have. If you want to do something as innocent as buy the wife's birthday or Christmas present a few weeks or months in advance, you can do that with cash and then, even when she's browsing the bank statement, she'll not know what she's getting.

When we go cashless... a quick glance at the online banking will enable her to see that you spent $200 at Michael Hill Jeweler and the surprise is blown!

But more importantly, as Google has proven, information about peoples preferences, likes, dislikes and purchasing habits is one of the most valuable commodities on the planet.

So, when the bank knows every single transaction you make, they're building up a lower-house of valuable data and do you really think they're just going to ignore that value?

By law, they may not be allowed to sell that data -- but they can use it themselves so they can instead, sell a service. How long before your bank becomes an advertising agency?

Want to promote alcohol... no problems, your bank will drop a little message to all those accounts which have made a purchase at an pub, wine shop or bottle store in the past 12 months. That's targeted advertising and that targeting is worth big money to the bank and the advertiser.

Then we have "big brother".

Already, governments are making good use of banks to surveil people in an attempt to catch money laundering, terrorist activity and other illegal things.

Just about anything which involves moving more than a few hundred dollars around triggers anti-money-laundering processes and usually involves the reporting of such transactions to the relevant authority.

Now imagine this taken to the n'th degree -- as it no doubt will be.

Someone is murdered in a park on the North side of town. With the flick of a switch and a quick bit of data-mining, a computer somewhere will spit out the names and addresses of everyone who was seen to make a purchase in that area at the time of the murder. You instantly become a suspect in a murder -- even you you'd simply ducked down to the shop to get a loaf of bread.

Now you might say "this is great, it will help solve crime" -- but at what cost?

What happens when someone decides to track a friend or enemy, abusing the power they have by way of their access to this database. They can gain access to an enormous amount of very important information with a few keystrokes.

Won't happen?

Don't be so naive. How many times have IRD employees been caught doing just this and selling that info to repo agents and the like? How many times has it happened at WINZ? How many police employees have been caught out making unauthorised inquiries of their databases?

No... it WILL happen, history proves that.

So people, be prepared... one of your last rights of privacy will (probably sooner rather than later) be taken from you and big brother's constant surveillance of our every move will be further extended.

Good thing or bad thing?

You tell me.

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