Topic: How do Cashless Societies Cope with this Plot Twist (Read 391 times)

I have this believed and of which I think a few people and independent ventures trust that dealing dodges accessible pay on the grounds that there is no trade of cash. This isn't valid, in any case; bargain trades are viewed as accessible pay by the IRS. The equitable estimation of merchandise and ventures traded must be incorporated into the salary of the two gatherings to the trade.

Not exclusively is a cashless society more remote away than some might suspect, we are really observing an expansion in the utilization of money everywhere throughout the world (and this isn't only a US marvel).

We will see some intriguing tidbits that in themselves make for provocative discourses, yet when we couple them with research on the ascent of the unreported economy (otherwise known as the underground economy) and the quantity of individuals who get some type of government help, we may discover hazardous outcomes coming about because of concealed motivating forces that work in unintended ways.

I live in a near cashless Society, here the fees of local credit card or debit card are paid by the shopkeepers, bigger online companies don't charge fees either on card payment, but smaller online shops charges a small card fee of around $0.20 to 0.40 
But nothing are really free, so the shops just add their card expenses to there costumers in higer sale prices.

I don't think any government would allow private companies to take a 2% fees on every card transactions. But in the event it did happens new payment method would arrive, even blockchain payment cut be introduced.

Banks are pushing for the disappearance of cash precisely because of this, they want to have exclusive control of the money of the world, once they have that monopoly they could do anything they want and we will be powerless to go against them since they just could freeze your accounts and then you will starve and you will have no way to pay for your daily expenses, the scenario given by the op is precisely why we must support bitcoin because we cannot rely on the governments to do the right thing and stop that from happening.

Should this happen and we can't use cryptos, we're screwed. We'd be at the mercy of not just these bankers but the government as well. It would be easy to just lock out our accounts and we can't do anything coz that is where all our money is. Not to mention the constant monitoring.

Visa and Mastercard is playing their last hands, they are not going to be allowed to continue doing this forever, digital currencies and blockchain technology will not allow them to continue abusing the need for transactions using only them because they are the monopoly right now.

Smart people like us already left visa and mastercard methods (or even western union type stuff) to send money overseas and we are using any crypto (hell we even stopped bitcoin for a long time because fee got expensive and using altcoins) we want to send money to somewhere in the other side of the world. Why would anyone spend 2.5% or more on a transaction instead of using something less than 1 dollars ? Maybe mastercard is still the best option for paying something under 1 dollar I don't know (at least for bitcoin but not against stuff like nano) but its still a horrible horrible system that will be outdated quite soon.

I quite like such a society. there will be no problem with counterfeit money anymore. In my country, every year there are more than 5 million dollars (converted) counterfeit money circulating in my country and many people suffer because of it.
some foreign guests were tricked by bad guys when the scammers always paid back the excess with fake money.
I like a society that uses credit cards or other payment methods. It is quite modern and fast.

I do not appreciate this. A society that is too advanced and technology really makes me bored. When we come in contact with technology a lot, we need something different, that's fiat money.
I still like to spend with fiat money, although it's not as convenient as using a credit card but it's traditional. We cannot change the cultures that have existed for a long time.

You asked a really good question. And this is really a problem that needs to be addressed. If we imagine that miners, having united in large pools, will somehow be able to raise the rates for transactions within the network, we will get a very bad situation. In addition, electronic money can not be as secure as paper money. And in case of problems with electricity in a particular region, we can get a collapse in all walks of life. Therefore, I believe that the transition from fiat currencies to cryptocurrencies should be gradual and painless.

How is 60 or in some cases 80% of the population going to switch to barter?

The guys at customer services, IT, sales, sanitation, the police, the teachers, firefighters, how are they going to barter?
Hey, if you want this fire extinguished give me 20 apples and 10 spoons of coffee !! And if you want me to save your cat, that would be one pillow and two bowls of cheerios!

And why do you think that a barter system can't be taxed?
It was possible in Ancient Egypt, it will be possible now too.

If this happens I can totally see people just engaging in an informal economy. They may get their pay from this "fiat" and try to exchange it for BTC and other alts.

If these are banned they might engage in bartering for a while, using the fiat to buy goods, until they gain a supply of crypto.

This is another very strong argument that the cash of the states will always exist. If, for whatever reason, the state abolishes cash, in which I believe very little, then people will again switch to barter relations and the state will only lose from this.
At a time when non-cash forms of payment are only developing, and their number is growing, it is very strange to see an increase in transaction fees for their users. With increasing competition, the cost of such services should fall.
In any case, it will push people to use cryptocurrency.

I agree, since I don't like depending on credit cards totally. This kind of scenario is not far from actually happening because there are some cities that have already adopted vast use of cards - such as in New Zealand. I've heard that they have been using cards for their payment transactions because it is preferred and used in most merchant stores. If such a problem would arise, I'm afraid that the people won't have much choice especially if cash would already be unavailable for use. I believe that during such case, the people would find other ways like using/switching to crypto. In fact, many have opted to invest in crypto because of their distrust in fiat and banks.

if the ban is carried out simultaneously, of course the bitcoiners will now prosper. but I don't think it's that easy for now. only certain countries may be able to implement it at this time

It seems is also a cultural thing. Some countries are more prone to not using cash. Apparently most transactions are already over phone already in Sweden, while in other countries like Portugal or Italy cash is still used a lot in everyday shopping.

But nonetheless I claim the necessity for cash will be evident the very moment it's completely unavailable for the general public, even on those countries which on the surface don't care about having financial privacy.

Banning of cash is objectively a super bullish fundamental for Bitcoin.

Privacy is a big yhing. Paying for anything in cash means the transaction
is untraceable. Cash is on the way out, in my country it is difficult to pay
utilities like, electricity, phone, internet, waste collection, t.v. payment is widely
accepted or preferred by card or through the bank.

I would imagine card transaction fees would rise but not by 2000%, that is
just unsustainable. At the moment with "tap and go" card payments i can
buy a bottle of water for €1 and pay with card and walk away within 20
seconds, high fees for these payments wont work.

There really is no competition, in Europe its either Visa or Mastercard, not
a great start for competition.

If it's completely cashless then there's no way to go around the fees aside from using cryptos, assuming the government and banks haven't made it illegal yet. Would be funny and depressing if people would have to resort to bartering like inmate.

If you think about it, it only happens that our prison is larger than theirs.


Good that they actually thought about this. Completely cashless would give banks more power than they already have now.

People isn't really aware of the impact that 0% of financial privacy will have on their lives (and that is exactly what you get with no physical cash). In many countries people are surviving thanks to not paying a certain cut of taxes (so called underground economy). All of these people will have to look for alternatives to make it.

Then there's drugs, prostitution, and any of the common goods and services that may be embarrassing to have on a record.

So there's trillions in there alone, and that is beside the store of wealth use case which is also potentially worth trillions.

The loss of privacy is only a problem if you cared enough about it before the shift, which doesn't apply to most of the people. If they cared about privacy in general, they wouldn't be so carelessly sharing data on social media.

I even dare to say that people's privacy is already compromised by financial institutions and social media platforms. They know what interests you, what you buy, what you eat, and so forth. What's there to lose for people?

The damage is already done without people knowing, and when they finally do start to care they will realize it's too late already. People will swallow everything that they are subjected to. It has been like that for decades, no reason to expect things to change.

Tokenized fiat is still fiat. It all comes down to who's backing it, and it's still the government with a bag of potatoes and a pair of stinky socks. JPM's 'coin' is just a value transfer tool for their clients for now, but if they have serious plans to have it become an actual currency-like unit that the average joes can use to pay for things, the situation will obviously change.

I don't think there needs to be a war. If there is a war, then it's more something that thrives on social media rather than it being an actual real world issue. Governments still have the best position within the currency game they created themselves, and I don't see that change with the mass having more faith in fiat than in crypto. Convenience plays an important role too of course.

There is always a way to prevent that from happening:

Visa, Mastercard reach $6.2 billion settlement over card-swipe fees
Mastercard Fined $648 Million By EU Over Fees

And if fees go up too much, then the market will react and a new company will pop-up with cheaper fees, and since somebody mentioned Sweden, the leading payment processor in Sweden is Izettle, not any of the big names.

Besides cash gives you a false feeling nobody can touch your money...in a matter of minutes, the CB decides old notes have no value and will consider only new banknotes real money as it happened in Turkey. And all your cash will be useless.



Oh yeah, the government should do it!!!!
Because we all know the government is so damn good at doing things! /s

And how much does this Rupay cost in subsidies from the government?
Because every time any government offers something cheaper it actually costs you more but since it's from tax money people have a tendency to ignore the issue.

 

I do think in the near future cash will be completely gone. But looking at problems Europe faces it could be that they do not want cash to disappear just yet, because the older generations have trouble adapting to newer technologies and like to use cash.

I believe in same outcome, tokenization. What is jp Morgan doing right now? Fiat will disappear, I don`t doubt in that, but what is future bringing for all of us in uncertain. Now we have decentralized cryptocurrencies. What will stop someone to use anonymous zcash and force him to use some USDT or some other stable coin, government coin, corporation coin? We are entering in specific era, what will happen nobody can say, but war between centralized and decentralized sector is inevitable.

I think so too. Eventually, I strongly believe that we'll see tokenized fiat, where every token is compatible with PayPal, MasterCard, Vista, etc. In other words, governments haven't pulled out their big guns yet.

In the end, people want something that works as money whenever they want, has a stable unit value, offers convenience, and more importantly, the ability to reverse transactions. People don't know how to take care of their finances. They will always fall for scammers or mess up themselves resulting in loss of funds. If that happens with Bitcoin, your funds are lost for ever, which is a pretty scary thought for people.

If this happens this may happen to the cashless society
•convinient when buying
•effecient, saves you from the hassle of handling fiat moneh
•helps you track your expenses andthe money itself
•no more counterfeit money
•rampant hacking
•oldies cant cope up
•government can peek at your accounts

Thank you for bringing up few very good and strong points on the negative side of the cashless society. It's very much true! If we completely move towards cashless society, we will be at the mercy of banking cartels who will control the entire network. Whenever they will increase the fees, merchants will pass it on to the consumers like us and at the end of the day, we will bear it all! That is the imminent future. But the question is how to cope up with the ever increasing demand of the payment processors and Banks.

The answer is - a government run and non-profit payment processor!

Just to give you an example, In India, Visa and Mastercard is being used by majority of the banks for their payment processing. These organizations are private ones and seeing their dominance in the Indian financial market, Indian Government has started an initiative called "Rupay". It is a similar payment processor like Visa and Mastercard but strictly run by Indian Government. Now slowly all government banks have started using this payment processors and started issuing Rupay cards to the account holders. It is not not only giving great competition to the Visa and Mastercard, but also offering the similar efficiency within India. Only few private banks are still using Visa and Mastercard but all other banks are now offering the choice to their customers whether they want to get a Visa/Mastercard or a Rupay card. The transaction cost of the Rupay card, is simply a lot cheaper than these two conglomerates trying to control the major market share.

So these kinds of threats can be managed of a government wants to manage with good intention. Even governments know that it's not a good thing to be at the mercy of foreign made companies to control our own financial system so they have built their own. I am sure, a lot of other governments will try to achieve the same in the future because cashless society is the imminent future. I hope this answers the valid concern that you have raised here! Thanks for the opportunity!

With large volume transaction the transaction fee won't be considered a big thing, because the fee will be small compared to the amount that has been transferred. The transaction fee arises with the low volume trades, where the minimum fee seems big when compared with the amount transacted. Making cashless society will progress only when every human is taught about technology and its need.

Possible thou,when we have no longer in need of fiat but for now everything is connected to fiat which maybe used in digital form so we always using fiat over anything but if a day comes when crypto have stable value with that people will prefer cryptos over other due to the decentralization.

The fee increase will be pushed onto the consumer/client, so they will not feel the impact of this on their profits. The smaller merchants should take note about this on-sided decision and start considering adding alternative payment options for their clients.

It is nice when a duopoly like this can force changes like this, without companies having any choice or alternative in this matter. Their monopoly gives them the power to make decisions like this. This is why Bitcoin was created, to break Monopolies like this and to offer people an alternative option.  

Are you serious? Do you actually believe that FIAT will disappear just like that just because new methods of payment are available? I find it laughable that people actually believe something like this can happen.

It is a fact that people will always prefer FIAT over anything else like gold, Bitcoin etc due to their historical connection with it and it has proven to be far more reliable when compared to any other form of payment system.

Certainly, every new coming year is closer to technology and this also affects the money system. Cards will also turn into digital money as time goes on. I can even say that this fact is inevitable. Because, when any presence develops, its surroundings should develop accordingly.

indeed before the existence of bitcoin we were familiar with visa cards and master cards, in fact they had started it first. and now Bitcoin is present by offering a new system, and unfortunately not all countries immediately accept it. of course it becomes a natural thing if it requires a process

We are now entering the era without fiat/paper money on our pocket. Cards will be the thing we have to keep in pocket and golds in our safes. This is really starting to happen today. We can see that Visa Cards and Master Card, the duopoly is preparing for hike/increase of charges for the next year. That only means that people will try to stop using fiat and use their digital assets instead.

Centralized electronic payment processors such as Visa, Mastercard and co raising their fees is the least of the problems, the big problem would be the loss of financial privacy.

Bitcoin would obviously pump massively at the news of relevant countries going cashless. However the rise of demand for block space would raise Bitcoin fees as well, so second layer solutions must be ready by then to profit from the perfect storm.

but i don't think this can happen. because first of all if the  credit card companies did that there would be incentive to keep cash or even reinvent it to get rid of them.
besides lets not forget that we are living in a world of cut throat competition. if credit cards were the only means of payment then there would be a huge amount of competition which would lower the fees automatically. so anybody who raises the fees would simply be kicked out of the game.

and we always have the decentralized solution called bitcoin

Going full cashless is bad, and a scenario you gave is just one of the many negatives that could potentially happen should this idea come into realization. Aside from interest rates and fees, if a certain catastrophe occurs and disables the whole payment network, then what comes next? Consumers would be the ones suffering from a cashless society, as the services and merchants could increase rates at will without the consumers knowing beforehand. Fraud would be legally permitted once this happens, too.

Exactly. And even though it seems like in the article that merchants aren't directly affected, they most likely will since there is no way these intermediary businesses don't pass on the fees to the actual buyers/sellers.

They seem to be attributing the hike in fees in anti-fraud measures (aka chargebacks, credit card fraud), when you simply don't see that being necessary in decentralised cryptocurrencies like bitcoin, since it is not reversible and no one can physically "skim" your data as easily as a card.

It really goes to show the flaws of a cashless society as you said. It will be interesting to see if governments start their own electronic payment system, instead of relying on third parties, in order to go cashless. But imo centralised cashlessness has just too many detriments, including cost, maintenance, security concerns, and privacy concerns for it to be worthwhile to consider.

Exactly. And even though it seems like in the article that merchants aren't directly affected, they most likely will since there is no way these intermediary businesses don't pass on the fees to the actual buyers/sellers.

They seem to be attributing the hike in fees in anti-fraud measures (aka chargebacks, credit card fraud), when you simply don't see that being necessary in decentralised cryptocurrencies like bitcoin, since it is not reversible and no one can physically "skim" your data as easily as a card.

It really goes to show the flaws of a cashless society as you said. It will be interesting to see if governments start their own electronic payment system, instead of relying on third parties, in order to go cashless. But imo centralised cashlessness has just too many detriments, including cost, maintenance, security concerns, and privacy concerns for it to be worthwhile to consider.

This is exactly why central banks have now changed their minds about cashless societies.

For example Sweden was going cashless (with shops refusing to accept cash). But the Swedish central bank stepped in:

https://wolfstreet.com/2018/10/26/nirp-fades-swedens-central-bank-makes-u-turn-on-cashless-society/

Cashless society is a nightmare, not only privacy-wise, but also in other ways we can't currently imagine. I personally don't use credit cards, and if there was no way to buy something for cash, I would usually skip it. At the same time, I'm amazed how people around me opt in for credit cards, like it is something very fashionable and technologically advanced. I would like to see some common sense around me, but not seeing it, so I guess, that's the sad future that expects us no matter what country we live in.

The scenario you indicated is not only possible, but very probable. Further centralization and monopolization, not to mention more control over the lives of the individual members of the society. The fees are almost always absorbed by the consumers. I guess the consumers have no choice but to swallow the increased fees, or maybe, if crypto were widely adopted, switch to using crypto.

....

Here is a hypothetical cashless society scenario for you.

#1  Paper money is eliminated.
#2  Credit card companies and assorted electronic payment processors raise fees and APR's by 2,000%.
#3  If paper money were available, everyone could abandon credit cards and utilize paper money instead but with the cash option dead that is no longer possible.

Question: how do consumers cope with conditions under cashless societies where fees are raised severely the way pharmaceutical drugs in the united states are after a single entity buys up existing stockpiles.

There are interesting and somewhat well worn arguments published all over the internet for potential negatives associated with market consolidation, further centralization of markets leading to monopolization.

I wonder if any cashless supporters have a good response to this?