
China says rejecting physical cash is illegal amid e-payments popularity - pseudolus
https://www.reuters.com/article/us-china-payment/china-says-rejecting-physical-cash-is-illegal-amid-e-payments-popularity-idUSKBN1O902F
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lykr0n
I think this is reasonable for the government to enforce until there is some
100% publicly accessible banking system that provides a medium of digital
payments. As it stands, there are people who are shut-out of parts of the
economy for one reason or another.

The dangers we will face (and why some people like the idea of bitcoin) is
that we're developing dependence on a financial system entirely controlled by
private entities. Your bank that holds your money, to the many companies
digital payments flow through, to the bank where your money is going. You are
controlled by scores you can't directly influence, and can't challenge. If
you're Chex score is too low, banks will refuse to let you hold a bank account
with them.

I think accepting cash should be required until we have a system like this in
place (I'm US focused, but its the same for other countries): The USPS/Federal
Reserve buys/launches a Visa/Mastercard like transaction network and at the
same time providing a universal bank that any citizen could use without
charge. This would make sure that there is no such thing as "un-banked"
people, and would provide a world where we could realistically go "cashless."

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Gaelan
This still means that the government could track/freeze your transactions.
While it’s better than the status quo of electronic payments (where the
government can, and so can private companies), depending on your threat model
it may not be a replacement for cash.

~~~
lykr0n
The IRS (in the US) does not give out information. At. All. Even to other
agencies. The USPS as well.

Isolation can be done. It's not perfect, but we can have stronger protection
than any private bank can give us.

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selimthegrim
Uh, Medicaid and healthcare.gov beg to differ

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lykr0n
Ok. Most every other agency runs a fairly tight ship. I'd take that any-day
over the patchwork of different, and unaccountable, entities that I both know
and don't know that hold my PII

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userbinator
Interesting (and IMHO a good thing to require acceptance of cash.) The
situation in the US is more subtle:

[https://money.stackexchange.com/questions/74196/in-what-
case...](https://money.stackexchange.com/questions/74196/in-what-cases-can-a-
business-refuse-to-take-cash)

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vertline3
I think it's a wise decision. Cash allows the poor easier access. Plus more
options help money circulate easier.

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malux85
Just throwing this out there because I’d like to hear the intelligent and
reasoned answers from HN and get a discussion going:

Should we have a totally digital and cashless monetary system? It seems to me
that the internet infrastructure as a whole is quite fragile, and a few well
placed nuclear bombs could cut Internet access to a country, and therefore
kill their transactional capability too. Would that make them more vulnerable?

(With most of the banking system computerised, have we past this threshold
already?)

What did they do during World War II? I’m guessing cash was still common and
this wasn’t an issue...

Interested in everyone’s thoughts...

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rchaud
For the reasons you mentioned, a cashless society is extremely susceptible to
disruption (the bad kind) that could lead to a serious breakdown in social
order.

Keeping cash as full legal tender, even with the availability of a cashless
alternative makes sense, in the way keeping farming and defense manufacturing
domestic makes sense, even with the availability of cheaper imported
substitutes.

We should be having these conversations now, because the push for a cashless
society is coming. Mobile payments may solve a real problem in say, Kenya,
where rural people don't have bank accounts but do have phones.

There is no such rationale in the developed world, so you better believe the
current crop of fintech startups (along with the usual PR push across media
channels) will be coming up with frivolous reasons as to why cash is history,
and we all join the 21st century by channeling our transactions through their
solution so they can take their cut.

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vincnetas
From my experience:

There are shops who charges extra if you paying with credit card on the other
hand there are shops where only credit/debit cards are accepted. And in both
cases there is some logic behind that.

There are additional charges payed by merchant when you pay with credit card,
small business just pass that on to customer. For others handling cash is more
work. You need to have a reserve to give change, collect cash at the end of
the day and put it to safe. Someday move accumulated cash to bank. There's
also risk of employee stealing cash. So accepting only cards makes also sense.

~~~
detritus
Since the beginning of this year it's been technically illegal here in the EU
to charge more for payments by debit/credit card over those by other means.

This is a strange decision I feel, very much to the benefit of larger
companies who pay a significantly lower processing cost per transaction.

It means that little people like myself have three options: raise all prices
by whatever percentage it is that the processing fee is; charge as normal and
take the hit if a client decides to pay by card; wing it and try to charge
people as i may suspect they'd best prefer, which is illegal.

I'm really not sure how the customer benefits, as I assume most businesses
will simply raise all their prices.

The likes of Visa and Mastercard will be happy though, which is good?

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Wowfunhappy
> Since the beginning of this year it's been technically illegal here in the
> EU to charge more for payments by debit/credit card over those by other
> means.

Wow. What is the stated rationale behind this?

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detritus
I'm not too sure. I _think_ it was to prevent consumers being hit with hidden
charges, which makes sense, but I can't help but feel the legislation is a
'sledgehammer to crack a nut' sort of solution. I think it would be fairer to
simply force companies to state up front what their charges are and then the
consumer can make her decision based upon that.

\- ed

Curious, I had a quick Google, and lo — from a few months after the
legislation was introduced...
[https://www.theguardian.com/money/2018/jun/17/credit-
debit-c...](https://www.theguardian.com/money/2018/jun/17/credit-debit-cards-
fees-costs-rules)

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walrus01
I'm actually kind of surprised, given the Chinese government's "social
control" surveillance ability which is enabled by Alipay and Wechat payments.

reference: [http://harvardpolitics.com/world/wechat-the-people-
technolog...](http://harvardpolitics.com/world/wechat-the-people-technology-
and-social-control-in-china/)

~~~
blazespin
Yeah, no kidding. Autocratic government against demonetization? Something
seems weird about this.

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kayoone
The Chinese government is exactly the type of government that i would expect
getting rid of cash soon, so this seems a bit weird, but maybe has to do with
not excluding the poor from a lot of commerce. Meanwhile in Berlin, arguably
one of Europes startup hotspots, you will be lucky to be able to pay with
anything other than cash in a vast number of hipster cafes or bars.

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tomcam
A lot of posts here make the leap to how decisions like this would work in the
West. The contexts could not be more different. Until very, very recently
China had pretty much no credit available to private citizens, and until the
advent of WeChat a few years ago there wasn't much in the way of electronic
funds transactions. And the Chinese have tended to be very, very good savers.

This all adds up to mountains of cash in private hands, especially held by
older people in the middle class. The Chinese government and people value
stability above all else. Eliminating cash just isn't going to be an option in
the near term, even with a totalitarian government.

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anongraddebt
This is one of those signals - among others - that China is farther along the
next technology curve (whatever it will be) then the U.S. They basically
skipped plastic and went straight to digital/mobile. If the next wave of
startups coming out of China can crack international markets, like U.S. based
startups have always done, then... look out.

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NTDF9
Same in India. There are more digital wallets than plastic. Even villagers in
remote districts understand a digital wallet.

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anongraddebt
Yep. You'll find structurally similar examples from the late 19th century when
England passed the torch of tech innovation to the U.S.

Same goes for business history. Companies built from the ground up on the new
technology tend to have the wind at their back.

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username3
Is it illegal to add a fee for accepting physical cash?

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dis-sys
it usually works the other way around - they give you a 2-3% discount when
paying with your mobile. in that sense, an extra fee for accepting physical
cash is already there.

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echevil
Very reasonable decision

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tanilama
Of course. This is a blatant challenge to the government's authority.

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rustacean
lol, It is ignorance to blame all problems blindly on authority. Many people
around me are complaining that some businesses only support electronic
payment, which is a kind of market discrimination for those who have not
received the education. And in China, e-payment has nothing to do with privacy
or freedom. All payment tools can only be opened with ID cards, and some even
need to upload recent photos of real people holding ID cards.

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solotronics
e-payments are only a small step away from cryptocurrency

it's really interesting to have the option to make and use a money of your
choosing instead of a state currency who's issuance is totally outside your
control

democratization of money!

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dmoy
wechat and Ali pay are still paying in RMB. I'm not really sure what hohre
talkint about here, it's still a centrally controlled state currency.

