This article argues that the push towards a cashless society opens citizens up to greater financial surveillance and removes autonomy over personal economic transactions. While digital payments are convenient, removing the option for cash takes away flexibility and risks excluding those without access to banking. Private companies see cash as competition and are working to phase it out, but most people see cash as a normal public utility rather than a "social evil". The surveillance implications of a fully digitized payment system could enable new forms of economic control and censorship by governments and corporations.

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The Guardian view Columnists Letters Opinion videos Cartoons
Hang on to your cash. This dash to digitise
payments is dangerous
Brett Scott
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
Wed 13 Sep 2017 11.20 EDT
3,902 1,116
S
weden 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.
Opinion

2. 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
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3. 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

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Guardian Pick
Just you wait. The bank is bound to end up talking to your soon to be private and for profit
healthcare provider about your alcohol intake and this will be the basis for them to refuse you
coverage.
What a time to be alive.
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