After the latest attack on Money in physical form such as banknotes and coins. More by Harvard Economics Professor Kenneth Rogoff (“The Case Against Cash”), it might sound like we will all benefit from its demise. Rightfully, however, not everybody agrees.
Cash payments offer consumers freedom and anonymity. Sure, you might think, “why should I care if I’m not a criminal?” Think again. As Chairman of Signature Bank Scott A. Shay told CNBC, today’s technologies are already feeding companies’ big data processors. These data are serving them to influence consumer behavior. So, says Shay, “It’s not too far-fetched to wonder if the day might come when the health records of an overweight individual would lead to a situation in which they find that any sugary drink purchase they make though a credit or debit car is declined”. And being overweight is not a crime, at least not today.
There is another critical issue in a cashless scenario: third-party freeriders. Today, cash is provided by the central bank (in essence, the government) while all other A transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More methods go through private companies who are not concerned about the public’s wellbeing. On the contrary, they are worried about their earnings and overall growth. These earnings can come directly through consumer purchases (via visible fees) or indirectly (via big data and/or hidden fees). Furthermore, the data they collect about your purchasing habits will never again remain private, that is, between you and the merchant. This means that anybody, even honest citizens, will be easily scrutinized in the name of security, like it or not.
And finally, as many pro-cashless advocates like to state, by limiting your earnings to virtual wallets, commercial banks will have the freedom to impose negative interest rates to your savings when, and for as long as they please. For better or for worse.
To read the article by Ground Report that inspired this one, please click here.