Cash or Card — Will COVID-19 Kill Cash?

Cash has lengthy been king, however an growing variety of folks have ditched money in favor of bank cards and different contactless, digital cost choices. The drive towards a cashless society has been in progress for a while, however the COVID-19 pandemic has been used as a pretext to speed up the method.

With infectious illness on the high of everybody’s thoughts, payments and cash abruptly appeared particularly filthy, though they have not been linked to illness transmission, whereas digital cost was clear, handy and quick.

But, within the DW documentary “Cash or Card — Will COVID-19 Kill Cash?”1 producer Kersten Schüssler asks some necessary questions, like what’s at stake if society actually goes cashless? The reply is each your privateness and your freedom.

You Pay for Cashless Payments With Your Privacy

The World Economic Forum (WEF) has been vocal about its agenda of shifting away from money and to a digital forex, together with within the U.S., for years.2 But within the final yr, the pandemic has led to a drastic acceleration. In Germany, the place folks have been famously reluctant to embrace cost by card or app, the variety of folks paying by card elevated by 26% for the reason that begin of the pandemic.3

Cash remains to be being extensively used there and is even the one forex accepted in lots of markets and bakeries. This is not the case in Denmark, Norway and Sweden, nonetheless, the place money has virtually grow to be a factor of the previous. You will not discover ATMs fairly often and in the event you go to a comfort retailer, you are more likely to be advised it’s a must to pay by card.

In Sweden, your money could also be no good at a bakery, and store workers view this as factor. One younger bakery clerk interviewed within the movie mentioned it is a lot safer to not have any money on the retailer as a result of it cuts down on robberies.

Till Grune-Yanoff, a professor of philosophy on the Royal Institute of Technology in Stockholm, additionally states that cost apps let him monitor precisely what his two youngsters are shopping for. And this can be a key tenet of the cashless system. While money is nameless, paying by card or app leaves a digital path.

Already in Sweden, most banks now not give out money as a result of it is an excessive amount of of a trouble, and cost utilizing cellphone apps is booming. You can switch cash from one cellphone to a different as simply and rapidly as you may ship a textual content message.

“Here, money has become merely digital information,” Schüssler mentioned. But there is a draw back for the comfort. “This also means that Swedish electronic payment systems can track most people’s financial transactions. Big Brother is watching you.”

Is This the End of Cash?

The movie questions whether or not Sweden is the form of issues to come back, “a future in which cash is a thing of the past — and every payment for everything we buy can be traced and tracked.”4 Marion Laboure, a Harvard lecturer and analysis analyst at Deutsche Bank, has said that COVID-19 could possibly be the catalyst to carry digital funds into the mainstream.5 She advised Schüssler:6

“It’s not the top of money but. But what we now have seen for the reason that starting of this yr, and particularly for the reason that begin of the corona disaster, the amount of money in circulation has positively elevated as a result of it is thought of as protected by way of holding its worth.

However, if we take into account money as a way of cost, it has positively decreased. Fewer and fewer individuals are paying by money. In December, 30% of individuals made contactless funds in Germany. And at the moment, it is virtually 50%.”

Laboure described much more placing advances in different nations, corresponding to South Korea and China, which quarantined and destroyed financial institution notes. In the U.S., “the Fed decided to quarantine banknotes coming from Asia to make sure they were safe,” she mentioned. When requested whether or not this was an inexpensive response to the pandemic, Laboure mentioned, “The risk is very low. But they felt it was necessary.”7

Disease, Tax Evasion Used as Impetus to Destroy Cash

Throughout the pandemic, it has been implied that contactless, cashless funds are the popular “safer” alternative, permitting you to maintain your distance and eliminating the necessity to go “dirty” money backwards and forwards. But are you actually at better threat of catching COVID in the event you pay with money?

Johannes Beermann, an govt board member of Bundesbank in Berlin, would not suppose so, and he additionally would not imagine money might be changed by apps or playing cards anytime quickly. “I would say that’s been sufficiently disproven,” he mentioned. “If you look at the bank notes, like the five-euro or 10-euro bills here — which are in particularly heavy circulation — they have a special coating. We know from research that bills and coins don’t play any role in the spread of infections.”8

Corruption and cash laundering considerations had been additionally cited when banks stopped issuing 500-euro payments in 2019, whereas the Better Than Cash Alliance, an initiative with 77 members, together with the Bill & Melinda Gates Foundation, Visa and Mastercard,9 that’s “committed to digitizing payments,” has additionally referred to as for money to be abolished as a result of “slush funds, dirty money, money laundering and big sums not declared to tax authorities or the state.”10

“Of course, we have to combat money laundering, tax evasion and the financing of terrorism, and I think cash has to be monitored, as should other payment methods,” Beermann mentioned. “We have to ensure that. But I don’t think that this [digitized payments] will vanquish the underground economy.”

Leaving a Digital Footprint With Every Payment

The digital footprints or monetary information trails that you simply go away each time you pay by card or cell app are being watched carefully. Sarah Spiekermann, professor for information methods and society at Vienna’s University of Economics and Business, researches how this information is noticed and analyzed, and states that bank card information and digital cost information are feeding an trade of information brokers:11

“We know that credit card companies pass on this data. In the meantime, they can observe everyone in real time via all the digital media that they use to create large-scale profiles. It’s almost become normal to have 30,000 to 40,000 pieces of data on each person. And with this high-resolution history, they know what you do, the routes you take, what you buy, what you pay for, where you go on vacation, how much you pay. They know it all.”

Information like how a lot alcohol you drink or how a lot you spend on trip can all be tracked and “sold to the highest bidder.” We’re at a degree the place as soon as fledgling startups have morphed into immense information empires, accountable for our information and our privateness is of their arms.

The COVID-19 pandemic has made it clear how worthwhile digital technologies are in appearing as a security web to permit many actions to proceed, however as a result of governments have not handled elementary points to guard privateness and digital rights, these information empires proceed to personal and function the Internet and world technique of communication.

These monopolies result in uncontrolled energy that, in flip, leads folks to be much more constrained and residing in a society based mostly more and more on surveillance, and digital funds are a mandatory a part of this plan and additional surveillance capitalism. Spiekermann defined:12

“We’ve analyzed, for instance, how Oracle Blue Kai has described accumulating 30,000 person attributes from 200 information distributors, which might enable them to create the profiles of 700 million folks. That’s most likely your complete western world.

And if we glance to see who’s offering that information: Visa, Mastercard or Acxiom, Google, Facebook, Twitter interfaces. That’s surveillance capitalism. Surveillance capitalism includes lots of and 1000’s of firms with information trade agreements working collectively behind the scenes.”

As a results of this information, you and your neighbor may find yourself paying totally different costs for issues like flights and inns, or you may be refused insurance coverage or be handed over for a job supply. You may suppose these items are simply dangerous luck or destiny, she mentioned, “when in reality, it’s the result of databases making some sort of prediction about them. And people behind the scenes are earning money to create these profiles of people. It’s disgraceful.”13

There are not any legal guidelines in place to curtail this brand-new kind of surveillance capitalism, and the one motive it has been capable of flourish over the previous 20 years is as a result of there’s been an absence of legal guidelines in opposition to it, primarily as a result of it has by no means beforehand existed. Surveillance has grow to be the largest for-profit trade on the planet, and your total existence is now being focused for revenue.

Payment Technologies Are Rapidly Developing

You’ve most likely used one or extra kinds of contactless, digital funds, however that is solely the start of the cost applied sciences to come back. In China, Chinese and U.S. firms are testing “smile to pay” facial recognition expertise, which ties your potential to pay for items and companies together with your smile.

But it would not finish there. Ultimately, the plan is to make use of facial scans if you enter a retailer, which make use of artificial intelligence to acknowledge the individual and their credit rating. AI additionally detects feelings, social affiliations and whether or not you are underneath stress or getting sick.

All of this private information is the price of counting on this digitized system, and it may have vital ramifications for each psychology and safety. Spiekermann, who needs money to be retained, mentioned within the movie:14

“If I pay with a smile and I start to connect smiling to economic transactions, then this habit will also leave its imprint in my real world. I don’t think we really want those kinds of associations to develop. Our society and social interactions would become subtly commercialized … [also] power can be rapidly knocked out, as can IT systems. It’s a matter of security. We need a concrete backup. We still need cash — for security reasons.”

While all-digital cell banks are already up and operating, various choices are additionally rising. Berlin firm gives a contemporary digital-analogue hybrid cost system that makes use of encrypted barcodes to get cash or make a cost.

The barcode stipulates how a lot is paid in or out. No switch of account or bank card information is required, and every transaction will get a brand new barcode, permitting you to make use of money in a digital context however with out abandoning information trails.

In addition, whereas U.S. federal regulation doesn’t require companies to simply accept money as cost, cities and states can enact native legal guidelines to take action. At least 21 cities and states, together with Massachusetts, Rhode Island and New Jersey, have handed or are contemplating legal guidelines that prohibit retailers from refusing money funds.

It’s unclear how strictly such legal guidelines are being enforced, however in New York City, for instance, companies can face steep fines for refusing money or charging larger costs to prospects paying money.15

Former Interpol President Opposes Cash-Free Society

Bjorn Eriksson, former Interpol president, was additionally interviewed for the movie. He’s conversant in cyberattacks and cash laundering, and states that money ought to be accessible as an choice for folks, together with those that aren’t tech savvy — a inhabitants he estimates to be about 1 million folks in Sweden alone.

“They are looked on as unprofitable. Just leave them,” he mentioned. “I don’t like that type of society.” Security is one other main concern to leaving money behind. “What happens if the Russians, Putin or somebody, switches off the system? We have no defense. How do you then defend yourself if you just have this card that doesn’t function? Cash is a perfect option.”16

The interference together with your freedom and privateness, nonetheless, is what he believes will drive younger folks to push for money to be preserved:17

“[What] … attracts a lot of young people is what they see in China and some other nations where you use these to control your citizens. Because if you have a system with card, you’ll have a technology with cameras, you have a technology with artificial intelligence, you’re really going to be checked. Young people don’t like that.”

He additionally believes the pandemic is getting used as pretext to modify to a cashless society though “there is no proof whatsoever that cash is carrying that type of threat from corona.”

The push to eradicate money goes to proceed, particularly since digital funds are extraordinarily profitable for banks and cost service suppliers, whereas the information dealer trade can also be making enormous revenues, Schüssler mentioned.18 Still, money represents a type of freedom, one which ought to be handed on to the subsequent era to protect as a lot autonomy and privateness as doable.


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