
Denmark is inching closer to becoming cashless - ghosh
http://www.cnbc.com/id/102682877
======
plesner
I'm Danish and I find this thoroughly distressing.

The payment processor, Nets, is a monopoly, owned by US investment firms. They
have frequent outages and are unapologetic when they do. There is no
transparency. They have a terrible privacy record (see
[https://en.wikipedia.org/wiki/2014_Se_og_H%C3%B8r_media_scan...](https://en.wikipedia.org/wiki/2014_Se_og_H%C3%B8r_media_scandal)).
Until last year everyone down to their phone support staff had open access to
everyone's payment records (see [http://www.computerworld.dk/art/230818/alle-
kundeservice-fol...](http://www.computerworld.dk/art/230818/alle-kundeservice-
folk-i-nets-har-adgang-til-foelsomme-kort-data) \-- in Danish). Despite all
these issues they just laid off a bunch of people. Their only priority, it
appears, it making money for the owners.

Money is a critical piece of infrastructure and these guys absolutely cannot
be trusted to implement it. With more payment processors and a regulatory
framework that forced them to provide decent service maybe cashless is not a
bad idea. With the current implementation though there's a good chance it will
be a disaster. It will certainly be a gaping vulnerability for anyone who
should feel like targeting us; I wouldn't be surprised if all it would take to
bring the whole thing down is one lone hacker.

~~~
sumedh
India developed its own payment network called Rupay although adoption is a
bit slow among the masses. Denmark should create its own network.

[http://en.wikipedia.org/wiki/RuPay](http://en.wikipedia.org/wiki/RuPay)

~~~
plesner
It is homegrown. The Dankort was a government initiative originally built and
paid for by a consortium of banks back in the 80s. The theory was that the
savings for the banks from having a more efficient alternative to cash would
pay for the development costs, which is exactly how it turned out. But then
the banks forgot that what they spent on payment processing they made back
elsewhere and wanted it to pay for itself, and started cutting costs. Finally
last year they sold the whole thing off to the US.

In addition, the dankort is strictly regulated to the benefit of consumers
which the banks dislike because it limits how much they can charge when you
use it. They have an interest in pushing people to visa or mastercard or their
own mobile payment solutions which don't have the same restrictions. The
payment processor itself is developing their own alternative to compete with
the dankort which they are mandated to also implement. I don't think they
provide bad dankort service on purpose but it's a concern that good service is
actually against their own economic interest.

------
skrebbel
For me, cash payments mean privacy (at least until all shops have facebook-
uplinked facial recognition cameras installed in every corner).

But then again, Danes never seemed to care much about privacy (you can look up
a person's address and all kinds of personal data if you know their social
security number, for example), so I doubt there's going to be much backlash.

~~~
alkonaut
There is nothing that says that cash-free also implies that all payments are
transferred via credit card companies and banks that record everything. A
cheaper system for small payments via some form of "electronic cash" needs to
be added to the mix. If we are in luck, that system is invented by someone
other than a credit card system, bank, or Apple.

~~~
Tomte
It has existed for a long time now:
[http://en.wikipedia.org/wiki/Geldkarte](http://en.wikipedia.org/wiki/Geldkarte)

No one uses it.

------
raverbashing
While I'm a big proponent of cards, and a firm "mythbuster" of the "getting
cash is free" myth, going 100% cashless worries me a great deal.

What if I'm visiting and my card is not accepted, for example?

Also, this facilitates central bank policies. Like negative interest rates and
lending massively to banks

~~~
alkonaut
What is the connection betweek cash-vs.-plastic and central bank policies? Is
it the amount of money held in cash? That has to be pretty small already in a
place like denmark?

~~~
michaelt
A few days ago there was an article [1] posted here [2] about negative
interest rates:-

    
    
      As long as paper money is available as an alternative for 
      customers who want to withdraw their deposits, there’s a 
      limit to how low central banks can push rates. At some 
      point it becomes cost-effective to rent a warehouse for 
      your billions in cash and hire armed guards to protect 
      it.
      [...]
      Bank notes, as an alternate storehouse of value, are a 
      constraint on central banks’ power. “We view this 
      constraint as undesirable,” Citigroup Global Chief 
      Economist Willem Buiter and a colleague, economist 
      Ebrahim Rahbari, wrote in an April 8 research piece. They 
      laid out three ways that central banks could foil cash 
      hoarders: One, abolish paper money. Two, tax paper money. 
      Three, sever the link between paper money and central 
      bank reserves.
    

Of course, inflation already serves as a tax on savings, so this isn't as
radical as it sounds if governments really want to discourage saving.

[1]
[http://www.bloomberg.com/news/articles/2015-04-23/negative-i...](http://www.bloomberg.com/news/articles/2015-04-23/negative-
interest-rates-may-spark-existential-crisis-for-cash) [2]
[https://news.ycombinator.com/item?id=9496568](https://news.ycombinator.com/item?id=9496568)

~~~
alkonaut
I have read much less economics than I would like, but at negative
inflation/interest rates, I can't see why one would chose to hoard billions in
cash (whose value is set by a central bank that is likely eager to increase
inflation by printing more) rather than hoarding some other resource ?

~~~
raverbashing
I guess you didn't read the part that said "Negative Interest Rates", charged
directly to your bank account

~~~
alkonaut
When I get my money out of the account because of deflation, why would I
choose cash over, for example, gold? In financial unrest, holding cash gives
zero return _at best_ , and more likely a large negative return due to
inflation.

~~~
BonsaiDen
Negative interest rates will primarily affect big players like for example
pension funds, even at -0.75% percent interest these will loose a lot of
money. And buying gold is not particularly easy / cost effective when you need
to convert tens of billions of dollars. Not only will will you hugely inflate
the price as you keep buying, but also introduce much bigger fluctuations than
would result from deflation alone in the long term.

Lately, the Austrian central bank was rumoured to play with the idea of
negative interest rates so the Austrian pension funds quickly brought up the
idea of just storing their paper in secure vaults. As long as the costs of
storage / protection are lower can the losses due to the negative interest
rates, it's a net gain for the funds.

The central bank isn't directly allowed to prevent anyone from just getting
their money in cash and while they could delay it by "process", only the
government itself could issue a blockage on cash deposition.

~~~
alkonaut
Gold _is_ cumbersome, but on the other hand, billions in cash is too. Swedish
M3 money supply is $300Bn, the cash (M0) is only 4% of that, or around $13Bn.
The largest pension fund has more than 3 times M0. So clearly, there is little
chance that this pension fund could convert its assets to cash, at least not
swedish currency. I'm not sure what the Swedish law is here, but I can't
imagine that they would be required to _issue_ the amount of money required,
if such a large fund suddenly wanted to store cash? (You could mint the famous
platinum coin I guess).

------
PeekPoke
This is the taxmans dream - all transactions recorded and traceable.

~~~
cperciva
Being able to see every time a dollar (or krone, I suppose) changed hands
isn't enough for the taxman though. Last month Tarsnap Backup Inc. wrote me a
cheque, and there's a very clear electronic trail showing the money moving
from Tarsnap's account to mine. But that electronic trail says nothing about
the reason why the money moved.

If Tarsnap was paying me a bonus, that would be taxable income. But if Tarsnap
was merely reimbursing me for expenses I paid on my personal credit card,
that's not taxable. The taxman can only tell the difference when they turn up
at my door and ask to see my records showing why that money was paid.

(The answer, incidentally, is that Tarsnap was reimbursing me for the AWS bill
I paid via my credit card. Tarsnap, being a Canadian small business, can't get
a US dollar credit card with a limit high enough to pay its AWS bills, but my
personal credit card has a generous limit.)

~~~
beagle3
The taxman would ask you to file that explanation; 4 years down the line, 5
times, to different auditors, at different times, using different forms. You
are presumed guilty until you've proved your innocence. And if you've lost the
paper trail - well, then, it's a taxable bonus.

(Canada might not yet be this bad - no experience there. But I've filed taxes
in 3 countries that are)

~~~
icebraining
Around here, you're always required to file those records every month
(electronically). Don't assume this gets you off the hook from having to
produce them later to an audit, though - it's still your responsibility to
hold on to them.

------
Htsthbjig
Going to the store and having a problem with one of the products, we looked at
the registry of all my last purchases(that got recorded for using a discount
card) so they could see I was right.

Just looking at the list it felt so wrong. Everything I bought, with the day
on it, the person that attended me FOR YEARS.

I mean, they had all this information about me that even I do not have about
myself so they could study me like a Guinea Pig.

Governments are collecting more information about us that the Stasi or KGB.
Transcribing our phone conversations, our GPS position, and now everything we
buy, where we buy it, when we buy it and soon with whom we do it.

This is a serious problem. We are predators by nature, the first thing hunters
do is study the habits of their victims so they can find vulnerabilities.

Too much power in a few hands. This people also have the power to make money,
and want to ban cash so they can force you interest in your own
savings(negative interest or tax your money).

~~~
raverbashing
_that got recorded for using a discount card_

And now you know what's the purpose of a discount card

------
MrZongle2
"Dad, can I have my allowance?"

"Sure, let me just find my phone....ok, firing up my MobilPay app...selecting
your name from my contacts....entering amount of $10....entering my PIN for
confirmation.....whoops. Getting an error. Let me try again. Uh oh, looks like
the service is down at the moment. Sorry, son...you'll have to wait. Maybe it
will be back up in an hour or so."

(If you don't have kids, substitute with a yard sale/flea market, handout to a
panhandler, impromptu purchase at a food truck, repayment of a small loan to a
friend, etc...)

Mountain of privacy horrors aside, a cashless society _still_ looks like hell
if you need to engage in a transaction with anybody or anything that doesn't
have a card reader.

And the solution is _neither_ "don't have those transactions" nor "add more
card readers".

------
flurdy
Im all for it. I moved back to Norway for a few years (2006) and most of the
time there I only carried my debit card and no cash. I sometimes had a 200kr
note in the same card sleeve for emergencies, but think I only used it once or
twice in the 5-6 years I was there. Even remote pop up cafes/hot dog stands in
the middle of nowhere took chip and pin cards.

It annoyed when I moved back to the UK that I had to start carry cash again as
most corner shops in the UK have a minimum spend of £5 for cards. For valid
reasons as in the UK the card providers charge a much higher fee than in
Norway but it generally makes me avoid those shops.

The spread of contactless cards are also a blessing (in the UK and Norway).
Paying for kids ride on stationary cars in shopping centres, even quick
charity donations, etc are all great friction removing innovations.
([http://www.fundraising.co.uk/2015/01/22/cruk-trials-
contactl...](http://www.fundraising.co.uk/2015/01/22/cruk-trials-contactless-
giving-through-the-charity-shop-window/))

~~~
learnstats2
> the card providers charge a much higher fee

I suggest that card providers would charge an even higher fee if nobody was
using cash.

------
onion2k
_The rise of electronic payment could also raise privacy concerns, but Hahn
said these pale in comparison to what it would mean for state revenues._

Those two things appear related but they really aren't. The claim that you
need a detailed record of all transactions in order to maximise tax revenue
and stop crime is wrong; you only need a record of the financial aspect - the
value of the transaction, when it happened, what was purchased, and what tax
was due. You don't need any information about _who_ bought the items to ensure
the tax is collected properly. You could have a cashless society that respects
privacy by making a legal requirement for the details of who made a
transaction to be stored separately and anonymously to the tax reporting
information. If Denmark's system doesn't do that then they have made a choice
to deliberately limit people's privacy. Suggesting privacy _has_ to be
compromised in order to report tax receipts properly is nonsense.

------
bodhi
> Still, essential services like [...] chiropractors

Is it just me that finds this odd? Or are Chiropractors much more common in
Denmark?

~~~
emirozer
That really is odd, considering there was never a solid proof for chiropractic
procedures helping people in the long term. I may have mistaken but as far as
i know its just a momentarily relief.

~~~
Toast_
Treating symptoms rather than the 'cause' is in fact common practice; Consider
the case for Ambien.

------
ghostberry
How do you give money to a poor homeless person?

~~~
necrodawg
It said Denmark, not the USA. People here have homes.

~~~
ghostberry
30 seconds of searching later

[http://udenfor.dk/uk/Menu/News/The+number+of+homeless+people...](http://udenfor.dk/uk/Menu/News/The+number+of+homeless+people+in+Denmark)

~~~
Squarel
He did not say no one is homeless.

The number of people you see sitting on the street begging in a Danish city vs
the number in a US location is vastly different.

Homeless people in DK often sell a magazine, and you can pay for this using a
mobile.

------
anon4
What if I want to give 20 quid to a friend? The thing that worries me the most
about cashless is how it makes it extremely hard to give money to others --
each transfer needs to be a bank transfer and if I want to give you money, you
need to be carrying a device approved by the bank, into which I can insert my
card, write my PIN, etc., etc. Unless you can show me how person-to-person
money transfer will work, I'm not convinced cashless will work.

Also, I don't agree with having to pay to pay, i.e. the "x%" tax on each
purchase the bank takes.

~~~
useerup
Two very popular apps in Denmark are "Mobilepay" and "Swipp". You download an
app and connect it to your bank account (typically by means of a plastic
card).

It is extremely easy to make person-person or person-business payments with
the apps. You only need to know the phone number of the recipient. The
transfer is immediate and the recipient gets a receipt on through his/her app
in seconds.

It has become a very popular way to settle smaller amounts between friends,
restaurant bills etc. It is actually easier than cash since you do not need
small change.

------
lyschoening
I still carry a single note around with me here as a backup, but I rarely have
to use it. What has really advanced the process in recent years is MobilePay,
a mobile app that let's anyone send money to anyone else with a phone number,
provided they also have the app.

As for privacy concerns - my guess is criminals and those with privacy
concerns will resort to pooling payments in some way - e.g. by converting it
to some virtual currency and then back again. The tracking of regular people's
transactions is of course getting much much easier.

~~~
tsotha
That's a good point. The criminals will always find a way around it. They'll
do business in stacks of euros or dollars.

You can get rid of the _official_ currency, but there will always be people
using some kind of currency. Currency from some other country, drugs, precious
metals. Even favors.

The only people who will be completely locked in are the 9-5 types.

------
walterbell
Week-old discussion (142 comments) on cash and negative interest rates:
[https://news.ycombinator.com/item?id=9496568](https://news.ycombinator.com/item?id=9496568)

------
xycodex
Bad idea. Cash is the ultimate failure mode for on-site payment systems. What
if the internet/phones went out? What if I'm visiting from abroad and my card
is declined for potential fraud?

~~~
hobarrera
Lots of places already fail to generate invoices with no internet/electricity,
so there really no new issue here.

Besides, I expect countries like Denmark don't have power/internet outages as
often us we do in underdeveloped countries.

Also, you can notify your bank if you're travelling abroad so they don't
reject anything. It's actually mandatory for some banks.

------
nateguchi
I'm still waiting for receipts to go

------
cjsthompson
The real reason they are going through with this is so the mafias that are
called states can police everything you do with your money. It's just as
unnacceptable as electronic voting machines and should be opposed at all
costs.

