Many consumers and businesses alike have welcomed this revolution with open arms, adopting online banking, contactless payments, and associated apps in ever-increasingly vast numbers. For its part, the mainstream media almost universally hails this emerging milieu a very good thing indeed — but not all are convinced of the virtues of cashlessness.
Among the dissenters is campaigner Brett Scott, author of The Heretic's Guide to Global Finance, who for some time has observed this inexorable march with growing concern. He believes people rarely understand how and why this clamour for a digitally-monopolized payments future has become louder and louder over time, and just who benefits from the push. Speaking exclusively to Sputnik journalist Kit Klarenberg, he sums up his assorted worries.
It would be easy to dismiss opposition to cashlessness as natural yet irrational resistance to change. After all, as a vast number of influential fora perpetually hammer home, cashless societies are supposedly inevitable, a logical evolution and advancement in payments, offering fresh benefits to consumers while eradicating — or at least minimizing — the shortcomings of the means and structures that preceded them.
However, Brett believes a self-perpetuating and dangerous feedback loop underpins the tectonic shift toward cashlessness in recent years — a feedback loop of financial institutions' own making, in the pursuit of profit. Ultimately, the less banks spend on physical infrastructure, and the more payment giants like Mastercard and Visa increase their transaction volumes, the more money they make. The needs, concerns and interests of consumers are thus secondary considerations for Big Finance, if at all.‘nudging'. Finance industry players want the public to adopt digital, so slowly make it difficult to use any alternative. For example, they start shutting down ATMs, which makes it harder to access cash, which makes digital systems thus appear relatively more convenient by default, which induces people to ‘choose' digital. For centuries, there was no public angst at all about physical currency's ‘inconvenience', and I still see people use cash every day without any obvious difficulty — yet we're constantly told it's burdensome. This is psychological reverse-engineering," Brett told Sputnik.
Supporting these efforts, and further perpetuating the digital payments feedback loop, are extremely well-funded propaganda blitzes — major banks and payment system providers both have dedicated marketing teams relentlessly pushing cashlessness, via major ad campaigns and PR stunts, such as competitions to find the most ‘digitized' businesses.
These efforts, coupled with the proliferation of technology such as smartphones and the overall advance of financial technology, have made fintech pushers and providers a progressively influential lobbying force, meaning governments and other powerful bodies end up giving citizens a digital payments nudge too. For example, in June the European Commission concluded an inquiry "on restrictions on payments in cash", which considered the idea of imposing ‘thresholds', limiting the size of cash transactions.
In the UK, the Treasury ran a public consultation March — June on "the role of cash and digital payments in the new economy". Brett submitted evidence — but argues the consultation's ‘call for evidence' document "was uncritical about digital payments, while demonizing cash", associating the latter with crime, money laundering and tax evasion, while barely mentioning any negative aspects of the former.
"I certainly won't argue there aren't benefits to digital payments, but what we're moving towards — a totally cash-free society, where citizens can only engage in economic exchange digitally via banks — is hazardous. People like having the option to use digital payments, but that doesn't mean they want the option to use cash removed, particularly when they see the negatives sides of cashlessness, which include increased surveillance, cybercrime, and disenfranchisement of those who don't have bank accounts" Brett told Sputnik.
The significant surveillance opportunities cashlessness inescapably creates for banks, businesses and governments is of some anxiety to civil liberties campaigners — but despite growing public concern about how much personal information can be harvested from social media accounts, there seems to be little comparable anxiety about the rise of digital payments, despite payment data being far more revealing.
"What someone discloses about themselves on social media is by and large at their discretion — a public persona they have a high degree of control over. If every monetary transaction in the world has to be passed through a nexus of companies, banks and apps, there's by definition no truly private means of monetary transaction — and all one's interests, likes and potential dislikes, activities and actions can be recorded and analyzed," Brett told Sputnik.
Governments already inclined towards indiscriminate mass-surveillance would similarly be keen to tap into such a wellspring, gaining an even more intimate and extensive view of citizens' daily activities. More sinisterly though, it could even allow states to ostracise individuals entirely from economic action, banning them from purchasing anything — or at least certain products and services.
Where does a cashless society leave the homeless? Digital payments are presented as clean, but could lock swathes of people out of the means of subsistence. Wrote this for @WiredUK. Big thanks to Natalie, @MarloesNicholls + @Suitpossum for talking to me 🤖 https://t.co/OVrmW9akuP— Phoebe Braithwaite 🦑 (@phoebraithwaite) August 7, 2018
Most obviously though, a centralized payments system depended upon by everyone also makes everyone equally vulnerable to attacks from criminals, or simply ghosts in the machine. For instance, on June 1 Visa suffered an unprecedented hardware failure, with catastrophic implications for millions of customers across Europe — many couldn't pay for often vital goods and services, others were stranded many miles from home. The glitch took the best part of 24 hours to fully rectify.
Nonetheless, Brett doesn't see cashless societies as necessarily unavoidable — despite multi-billion dollar marketing crusades, increasingly common use of digital payments, and evidently widespread political support, there's growing unease in some quarters about ever-reducing physical currency usage.
Ironically, such disquiet is often most prevalent in the most cashless societies. Swedish Central Bank Governor Stefan Ingves has repeatedly warned in 2018 the lack of cash transactions in the country is a problem, damaging the economy's resilience, and making even brief breakdowns an extremely parlous prospect for all. He has proposed new regulation to protect the long-term status of the Swedish kronor by forcing banks to handle cash.
"There are those who [think] we've nothing to fear in a world where public funds have been completely replaced by private options. I think they're wrong. That commercial players in all scenarios would shoulder the responsibility to meet public demand for safe payments is unlikely. If nothing is done, Sweden is heading for a situation where all means of payment the public has access to are given and controlled by commercial actors," he wrote in February.
The Dutch central bank warns about the rise of the cashless society, while the Amsterdam public transport system continues to promote it https://t.co/CdxR18uHX5— Brett Scott (@Suitpossum) June 18, 2018
Brett has also encountered resistance among national security specialists, which he feels notable — one would perhaps presume such individuals would support a shift away from cash payments, given their prevalence in terrorism funding and the drug trade. "The resilience question makes them think twice," he says, "if you're in charge of maintaining the integrity and safety of your country, the pandemonium that could erupt if a digital system collapses is a major concern. For example, what if your digital payment system is subject to a coordinated terrorist cyberattack?"
Brett hopes such warnings offer some pause to more determinedly pro-digital politicians elsewhere. He also suggests citizens, governments and banks alike should remain circumspect about cryptocurrencies, which are frequently touted by true believers in the sphere as a panacea for the various issues inherent in digital payments.
His skepticism stems from the fact cryptocurrencies often don't actually operate like currency — they're effectively tokens priced in US dollars, and in fact remain dependent on the fiat money system. While he thinks they're innovative, and uses them from time to time, he thinks it's not obvious they have the ability to replace the global banking system. In the mean time, he suggests we defend cash as much as possible — after all, if it ain't broke, don't fix it
.The views and opinions expressed in this article are those of Brett Scott and do not necessarily reflect those of Sputnik.