Coronavirus: Is this the end of physical cash? Will we go completely electronic?

[Dai Corner]

A key benefit of cash is the lack of an electronic trail showing what one has bought and where. In a card-only system where details of every transaction are recorded, this just offers one more set of data footprints that can be analyzed to profile us.

If one wants to access credit products from a bank, the only data that should be relevant is how much income is received every month, and how much expenditure goes out. It is of no business of the bank what that expenditure is spent on. I for one will resist any scenario where a daily transaction profile can be data mined to feed some algorithm which decides creditworthiness based on purported calculated lifestyle.

For example, say one has income of £1,000 per week and expenditure of £500 per week - would be a good position to be in if applying for mortgage, long term loan etc, right? Yet if one's bank knows that part of that £500 includes 6 transactions of £4.90 every night, every half hour, between 6pm and 9pm in a pub, it's not hard for an algorithm to conclude one drinks 6 pints per night (substitute normal cost of beer in local pub area), probably alone (as one isn't buying rounds) therefore comes to conclusion that one is an alcoholic. Bang - no credit for you (or punitively increased interest rates).

Alternatively, just draw £30 out of the cashpoint every day and one could be buying either booze or vitamin supplements - you only record total expenditure and no algorithm is the wiser.

This of course leaves alone the question of whether one trusts one's bank to keep your transaction log private and not sell/leak to other companies - sorry, I mean share the data for legitimate purposes with partner organizations...

On the other hand, that £30 cash could arouse suspicion that it's going on things you can't pay for by card such as illegal drugs and half your supermarket spend could be alcohol?

 

[scotrail158713]

A key benefit of cash is the lack of an electronic trail showing what one has bought and where. In a card-only system where details of every transaction are recorded, this just offers one more set of data footprints that can be analyzed to profile us.

If one wants to access credit products from a bank, the only data that should be relevant is how much income is received every month, and how much expenditure goes out. It is of no business of the bank what that expenditure is spent on. I for one will resist any scenario where a daily transaction profile can be data mined to feed some algorithm which decides creditworthiness based on purported calculated lifestyle.

For example, say one has income of £1,000 per week and expenditure of £500 per week - would be a good position to be in if applying for mortgage, long term loan etc, right? Yet if one's bank knows that part of that £500 includes 6 transactions of £4.90 every night, every half hour, between 6pm and 9pm in a pub, it's not hard for an algorithm to conclude one drinks 6 pints per night (substitute normal cost of beer in local pub area), probably alone (as one isn't buying rounds) therefore comes to conclusion that one is an alcoholic. Bang - no credit for you (or punitively increased interest rates).

Alternatively, just draw £30 out of the cashpoint every day and one could be buying either booze or vitamin supplements - you only record total expenditure and no algorithm is the wiser.

This of course leaves alone the question of whether one trusts one's bank to keep your transaction log private and not sell/leak to other companies - sorry, I mean share the data for legitimate purposes with partner organizations...

Personally I find that often the people who think like this are the ones who are trying to hide something. Perhaps I’m more relaxed about this than I should be, but I couldn’t care what the bank do with the fact that I go to Greggs most days (not at the moment though ), or do a weekly shop in Asda.

 

[Bletchleyite]

Personally I find that often the people who think like this are the ones who are trying to hide something. Perhaps I’m more relaxed about this than I should be, but I couldn’t care what the bank do with the fact that I go to Greggs most days (not at the moment though ), or do a weekly shop in Asda.

This does tally with one of the biggest problems with cash - it basically enables crime, and without it detection would be much, much easier, and some simply wouldn't be attempted.

 

[island]

A key benefit of cash is the lack of an electronic trail showing what one has bought and where. In a card-only system where details of every transaction are recorded, this just offers one more set of data footprints that can be analyzed to profile us.

If one wants to access credit products from a bank, the only data that should be relevant is how much income is received every month, and how much expenditure goes out. It is of no business of the bank what that expenditure is spent on. I for one will resist any scenario where a daily transaction profile can be data mined to feed some algorithm which decides creditworthiness based on purported calculated lifestyle.

For example, say one has income of £1,000 per week and expenditure of £500 per week - would be a good position to be in if applying for mortgage, long term loan etc, right? Yet if one's bank knows that part of that £500 includes 6 transactions of £4.90 every night, every half hour, between 6pm and 9pm in a pub, it's not hard for an algorithm to conclude one drinks 6 pints per night (substitute normal cost of beer in local pub area), probably alone (as one isn't buying rounds) therefore comes to conclusion that one is an alcoholic. Bang - no credit for you (or punitively increased interest rates).

Alternatively, just draw £30 out of the cashpoint every day and one could be buying either booze or vitamin supplements - you only record total expenditure and no algorithm is the wiser.

This of course leaves alone the question of whether one trusts one's bank to keep your transaction log private and not sell/leak to other companies - sorry, I mean share the data for legitimate purposes with partner organizations...

There is of course the very simple solution of doing one’s day to day purchases on one card and applying for lending on another.

 

[londiscape]

On the other hand, that £30 cash could arouse suspicion that it's going on things you can't pay for by card such as illegal drugs and half your supermarket spend could be alcohol?

In the current state where we still have widespread use of cash, an algorithm that assumes cash use is only for illegal drugs would be both useless, and borderline psychopathic on the part of those who would promote said algorithm. Equally useless would be an assumption that half of supermarket spend would be booze, as a £70 spend in Tesco has sufficient "spread" as to not be predictable (not being able to distinguish £70 solely on booze, and £70 solely on vegetables, and any variation in between). My example earlier referenced individual small card transactions which would be capable of being profiled as a single item in a known type of retailer.

Personally I find that often the people who think like this are the ones who are trying to hide something. Perhaps I’m more relaxed about this than I should be, but I couldn’t care what the bank do with the fact that I go to Greggs most days (not at the moment though ), or do a weekly shop in Asda.

By "something" do you mean: A) things which are illegal; or B) things which are legal but those of which you do not approve? I believe you are more relaxed than you should be - your trips to Greggs every day might very well do you a disservice if you want health or life insurance and that card trail could well come back to bite you. Oh - they won't ever share the data? Course they won't - until your bank ends up being owned by the same holding company as your insurer.

This does tally with one of the biggest problems with cash - it basically enables crime, and without it detection would be much, much easier, and some simply wouldn't be attempted.

Dagnammit - never realised this before. Having a private home enables crime (everything from domestic violence to weed smoking). With CCTV cameras in every room detection would be much, much easier, and some people would simply not attempt domestic violence or weed smoking. "6079 Smith W.! Yes, YOU! Bend lower, please! You can do better than that. You're not trying. Lower, please! THAT'S better, comrade!"

 

[najaB]

There is of course the very simple solution of doing one’s day to day purchases on one card and applying for lending on another.

It's a good thing that companies don't share financial data with some kind of reference agency for monitoring credit...

 

[CaptainHaddock]

Personally I find that often the people who think like this are the ones who are trying to hide something. Perhaps I’m more relaxed about this than I should be, but I couldn’t care what the bank do with the fact that I go to Greggs most days (not at the moment though ), or do a weekly shop in Asda.

Ah yes, the old "If you've nothing to hide you've got nothing to fear" argument that was used to try and bring in ID cards post 9/11.

If anyone uses the "If you've nothing to hide you've got nothing to fear" argument with me I ask them to post their full address, bank card details and a few naked pictures of themselves on the internet. Why wouldn't they if they have nothing to hide?

 

[JamesT]

Though one reason for a lender asking to see evidence of what your spending is on is to gauge how much resilience to a change in circumstances. If you're spending all your money on essentials for life you're going to struggle much more if your income is reduced compared to someone with lots of discretionary spending.
Affordability criteria came in after the financial crash as one of the causes was perceived to be lending to people who couldn't afford repayments if there were any changes in circumstances.

 

[island]

It's a good thing that companies don't share financial data with some kind of reference agency for monitoring credit...

Indeed it is. Credit files contain a very basic amount of information, such as end of month balance, credit limit, and whether payments have been made on time.

 

[Domh245]

I don't know if I should be worried then about the amount of tabs for information other than existing credit account on my experian report then!

 

[Bald Rick]

Ah yes, the old "If you've nothing to hide you've got nothing to fear" argument that was used to try and bring in ID cards post 9/11.

If anyone uses the "If you've nothing to hide you've got nothing to fear" argument with me I ask them to post their full address, bank card details and a few naked pictures of themselves on the internet. Why wouldn't they if they have nothing to hide?

This is slightly disingenuous, as it is a completely different context.

I have nothing to hide about my transaction history - I have absolutely no problem with there being a record of exactly how much I spent, where and when. Indeed, I welcome it, as it can help prove where I was if the need arose. (As indeed it has done).

Publishing naked photos of myself (not that I would wish that on anybody) is something I do want to keep private, hidden if you like.


My opinion of course.

 

[Bletchleyite]

This is slightly disingenuous, as it is a completely different context.

I have nothing to hide about my transaction history - I have absolutely no problem with there being a record of exactly how much I spent, where and when. Indeed, I welcome it, as it can help prove where I was if the need arose. (As indeed it has done).

Publishing naked photos of myself (not that I would wish that on anybody) is something I do want to keep private, hidden if you like.


My opinion of course.

That does show human irrationality, though. Detail of your financial history could be used for all sorts of purposes mostly not to your benefit, even if it's just to target advertising. Whereas a naked photograph of an adult...there's not much that could be done to harm you from that.

 

[najaB]

Whereas a naked photograph of an adult...there's not much that could be done to harm you from that.

That is very much a matter of what you consider to be 'harm'.

 

[al78]

I'm not completely comfortable with dispensing with cash and going completely electronic at the moment. The reason being flaky technology. The contactless feature on my new debit card failed a few months after receiving it, and the same feature on my credit card (different bank) seems to be intermittent, e.g. it worked two weekends ago but failed last weekend at the same retailers. Lack of reliability is the bane of technology, especially new technology, and I am the type that normally embraces new technology that looks to make things simpler/easier. Fortunately when contactless has failed, the retailers still allow using a machine and entering a pin.

 

[Bletchleyite]

That is very much a matter of what you consider to be 'harm'.

Which is a human thing. Note that I was assuming this was an anonymous leak (i.e. "some randomer has a naked photo of me", vs "somebody knows my personal and banking details), not the sharing of naked photographs with identifying information for e.g. blackmail purposes.

 

[Bletchleyite]

I'm not completely comfortable with dispensing with cash and going completely electronic at the moment. The reason being flaky technology. The contactless feature on my new debit card failed a few months after receiving it, and the same feature on my credit card (different bank) seems to be intermittent, e.g. it worked two weekends ago but failed last weekend at the same retailers. Lack of reliability is the bane of technology, especially new technology, and I am the type that normally embraces new technology that looks to make things simpler/easier. Fortunately when contactless has failed, the retailers still allow using a machine and entering a pin.

Are you keeping your card somewhere it may become damaged, e.g. alongside your phone or keys perhaps? Two failed cards seems to be rather more than a coincidence, they aren't complex technology.

 

[al78]

That does show human irrationality, though. Detail of your financial history could be used for all sorts of purposes mostly not to your benefit, even if it's just to target advertising. Whereas a naked photograph of an adult...there's not much that could be done to harm you from that.

I disagree. It could be used to highly embarrass you or harm your social status. Bear in mind images can be editied to show you in a light you would not want to be shown.

 

[al78]

Are you keeping your card somewhere it may become damaged, e.g. alongside your phone or keys perhaps? Two failed cards seems to be rather more than a coincidence, they aren't complex technology.

When not in use the cards are kept in my wallet. When carrying them on person they are in my pocket along with my keys. Do you think putting them in the same pocket as my keys could have damaged the contactless feature?

 

[Tom B]

This is slightly disingenuous, as it is a completely different context.

I have nothing to hide about my transaction history - I have absolutely no problem with there being a record of exactly how much I spent, where and when. Indeed, I welcome it, as it can help prove where I was if the need arose. (As indeed it has done).

Publishing naked photos of myself (not that I would wish that on anybody) is something I do want to keep private, hidden if you like.


My opinion of course.

That doesn't need to be a card transaction, although as there is a record of each transaction rather than one cash withdrawal, there will obviously be more data. I know that a rapist was convicted in the 80s as his alibi of being at home in Bristol was contradicted by a cash withdrawal in the town where it occurred.

Similarly, about 10 years ago, I got a call from Lothian & Borders - it turned out that, six months or so previously, I had been in the bank and had had a brief conversation with a lady who, later that day, was murdered. They saw this on CCTV and got my details from the teller's records and contacted me. As it happens I recall the conversation was along the lines of "are you waiting, or can I go ahead?".

 

[Domh245]

When not in use the cards are kept in my wallet. When carrying them on person they are in my pocket along with my keys. Do you think putting them in the same pocket as my keys could have damaged the contactless feature?

It's certainly possible that having exposed cards alongside your keys is damaging them - after all they're essentially a long thin strip of copper embedded in plastic so the sharp edges of the key could quite easily damage it. I've got a card from 2017 that I keep in my wallet and only remove when I need to use it (admittedly not all that often as I tend to use the virtual copy of it on my phone!) but the contactless on it still works.

 

[Bletchleyite]

When not in use the cards are kept in my wallet. When carrying them on person they are in my pocket along with my keys. Do you think putting them in the same pocket as my keys could have damaged the contactless feature?

If they aren't carried in a wallet, it's possible they are causing the card to bend or distort in a way that could damage it, yes, though I'd have thought it more likely for the chip to be damaged by being scratched. I would very much recommend carrying them in a wallet, even if it's only a thin one like those given away with season tickets.

If you're carrying them alongside your keys but in a wallet, this is unlikely to cause damage unless you've got a magnetic key (some of the patented keys have a magnetic pin).

 

[najaB]

Do you think putting them in the same pocket as my keys could have damaged the contactless feature?

Unlikely. The antenna is usually a good 3-5mm in from the edge of the card. It's more likely that they are flexing and breaking the wires than the keys causing any damage.

 

[david1212]

The various thoughts across the recent comments are interesting, from going cashless to avoid theft by casual staff to it enabling crime or at least making it easy e.g. purchase of drugs.

Today I made two small purchases for £2 and 89p plus my weekly shop all on contactless debit card. Normally all would have been cash. Now three different stores and presumably their banks have my details plus my bank knows eactly where I was at a specific time. Maybe I'm too distrusting of how these might be used either intentionally as is, for data analysis intended to be anonymous but actually at some point the anonymity lost or in some way fraudulently.

Further I have three statement entries to check and as my main account is a building society one with a cash card but not a debit card I had to transfer more funds to the debit card. With cash easy to see you are running low plus can not spend what you do not have. With the card either forgot about a purchase or there is an error then suddenly come to make a payment and it is refused and / or get charges for going overdrawn.

Covid-19 has certainly brought out the risk of cross-contamination and literally dirty money but I will be happy when cash payment are again readily accepted. While there are pre-paid cards most in some way have a fee and unless loaded with cash at a Paypoint or similar are not totally anonymous.

 

[CrispyUK]

The contactless feature on my new debit card failed a few months after receiving it, and the same feature on my credit card (different bank) seems to be intermittent, e.g. it worked two weekends ago but failed last weekend at the same retailers. Lack of reliability is the bane of technology, especially new technology, and I am the type that normally embraces new technology that looks to make things simpler/easier. Fortunately when contactless has failed, the retailers still allow using a machine and entering a pin.

By the technology failing, do you mean that the retailer’s terminal is failing to respond at all to your contactless card being presented, or that it detects the card but the transaction fails?

Contactless cards do require a Chip & Pin transaction every so often as a security feature to limit potential misuse of a lost/stolen card - unfortunately the pin pad terminals often don’t show this well and just show the transaction declined in the same way it would if funds weren’t available.

 

[Dai Corner]

The various thoughts across the recent comments are interesting, from going cashless to avoid theft by casual staff to it enabling crime or at least making it easy e.g. purchase of drugs.

Today I made two small purchases for £2 and 89p plus my weekly shop all on contactless debit card. Normally all would have been cash. Now three different stores and presumably their banks have my details plus my bank knows eactly where I was at a specific time. Maybe I'm too distrusting of how these might be used either intentionally as is, for data analysis intended to be anonymous but actually at some point the anonymity lost or in some way fraudulently.

Further I have three statement entries to check and as my main account is a building society one with a cash card but not a debit card I had to transfer more funds to the debit card. With cash easy to see you are running low plus can not spend what you do not have. With the card either forgot about a purchase or there is an error then suddenly come to make a payment and it is refused and / or get charges for going overdrawn.

Covid-19 has certainly brought out the risk of cross-contamination and literally dirty money but I will be happy when cash payment are again readily accepted. While there are pre-paid cards most in some way have a fee and unless loaded with cash at a Paypoint or similar are not totally anonymous.

As I've remarked before in this thread, one man's irritating statement entries are another man's useful data.

Why not set up a standing order for your normal weekly/monthly debit card spend to minimise the number of manual transfers necessary?

Being able to prove where you were (or at least where your card was) at a particular time might be useful if you were wrongly accused of a crime or misdemeanour.

These things cut both ways and, for me, the advantages far outweigh the disadvantages.

 

[Dai Corner]

Coronavirus 'will hasten the decline of cash'

As people turn to digital payments during the lockdown, there are fears over the long-term future of cash.

www.bbc.com

Coronavirus will hasten the decline in the use of cash as people make a long-term switch to digital payments, experts say.

The lockdown has led to a 60% fall in the number of withdrawals from cash machines, although people are taking out bigger sums.

Payment card use has risen with online shopping, particularly for groceries.

Experts say the long-term future of cash could be at risk, before the UK is ready to cope with the change.

This could leave behind an estimated 20% of the population who rely on cash, they say.

About 11 million cash withdrawals are still being made each week, with £1bn taken out, according to Link, which oversees the UK's cash machine network.

Yet, with many shops as well as bars, cafes and restaurants closed, there is less demand for regular cash withdrawals. People are going out less, but potentially hoarding more cash.

The average ATM withdrawal has risen from £65 last year, to £82 now.

Established more than 100 years ago, Webb's Ironmongery Store has seen locals through many a crisis.

In the current emergency the hardware shop at Tenterden, Kent, is serving items such as garden and home equipment, and paint, from a counter set up in the doorway of the shop.

In order to ensure customers do not have to wait, given social distancing, it has put a sign up pointing out that cash is still accepted.

Image copyrightNIGEL WEBB

Image captionSign at Webb's saying they take cash
"We are trying to serve as many people as possible, so they can get it done and we can send them on their way," said co-owner Nigel Webb.

"We take cards, but they may have to wait for the machine. We can process cash in a couple of seconds."

Cash use falling
Following a survey of consumers, Link suggested that 75% of people were using less cash, and 54% of those asked said they were avoiding cash.

There were reports early in the coronavirus outbreak about the spread of the virus on banknotes and coins. However, the Bank of England and World Health Organization have stressed that the risk is now greater than on any other items, and repeated the advice on regular hand washing.

Some 76% of people asked in the survey said they expected to use cash less and move instead to other forms of payment, or online shopping more in the next six months.

Natalie Ceeney, who authored a major report on access to cash,said that an estimated 30% of UK residents liked having cash as an option but, as a result of lockdown, may now be comfortable using other methods of payment. She described this as a "sticky habit", which they could stay with in the future.

With 50% of the population already operating predominantly cashless, that left only 20% who relied on notes and coins, many of whom were vulnerable.

Their demand risked being insufficient for the providers of cash infrastructure, such as delivery and ATM services, to be profitable enough to survive. "The cash infrastructure could collapse before we are ready," she said.

Will this be seen in future years as the crisis which finally ended our love affair with cash? Many shoppers are suspicious of handling it, worried about anything another person might have touched.

Traders who used to wince if you showed them your plastic are happily bringing out their card readers from the back of the stall. These findings do also show that in uncertain times some cling to their notes and coins even more tightly.

And they may be struggling to get hold of cash because they can't leave their homes. But right now there seems little doubt the virus is speeding up the switch to electronic payments.

 

[Bletchleyite]

My local shop has removed the minimum card payment they used to have and says he has no intent to reinstate it.

That leaves the chippy as the only place I ever spend cash. Got 70 quid to use up...that's a lot of chips!

 

[najaB]

I rarely use cash myself, but that was the case before the current health situation too.

 

[underbank]

This does tally with one of the biggest problems with cash - it basically enables crime, and without it detection would be much, much easier, and some simply wouldn't be attempted.

Criminals are well ahead of the game. Only the thick/unsophisticated criminals are reliant on cash, i.e. the street drug trade, low lifes selling stolen goods, etc. The "real" criminals have been into other things for decades, i.e. works of art, precious metals, antiques, firearms, - things that don't need their ownership registering unlike houses, cars, etc. They're used as a kind of "currency", being transferred between criminals in exchange for goods/services etc. Even if cash disappeared completely, the big criminal gangs etc wouldn't be affected in the slightest.

 

[underbank]

I'm not completely comfortable with dispensing with cash and going completely electronic at the moment. The reason being flaky technology. The contactless feature on my new debit card failed a few months after receiving it, and the same feature on my credit card (different bank) seems to be intermittent, e.g. it worked two weekends ago but failed last weekend at the same retailers. Lack of reliability is the bane of technology, especially new technology, and I am the type that normally embraces new technology that looks to make things simpler/easier. Fortunately when contactless has failed, the retailers still allow using a machine and entering a pin.

Flaky tech is certainly a problem in our village - the Spar shop first removed the minimum spend on cards, then went cash only, but the village internet is too flaky and they've had to go back to accepting cash. It's why a couple of other shops didn't even take cards and still don't. Outside the big towns and cities, the internet simply isn't reliable enough. And no, we don't have Virgin or cable as an alternative - it's BT copper or nothing for us!