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People asking about what problem this solves haven't been to South Africa or Zimbabwe which in some ways are ahead of the West in creating cashless societies.

The biggest bank is a phone operator and people can send each other money over the phone and from what I understand this is very common. Also interestingly most phones aren't smart phones. It's mostly analog. Banks have a serious incentive to create and encourage cashless societies -- because they're limited by the liquidity ratio.

People there are more skeptical of hard cash there while here it's nearly on par with Gold in terms of confidence.

I don't think I've to explain offering an API allows third party engagement and endorsement and an opportunity for others to grow their service. Yes there are security concerns but these can be all secured from backend.




Let me counter with these facts about banking in South Africa:

1. Fees at most banks are high. (A basic account with no transactions typically have fees of several dollar per month).

2. If people are moving away from physical cash, its because of security concerns (theft and robbery), not liquidity.

3. Most transactions are done by credit card, debit order or Electronic Fund Transfer (EFT). EFTs are done between numbered banks account. Mobile to mobile phone transfers are still very rare.

4. People are stubornly loyal to their banks. If root fails, it will be cause of this.


Regarding # 4. This product is by one the current largest banks in South Africa. Standard Bank of South Africa is big in S.A and operates in many other African countries.


Just to clarify #2 - I read that as meaning that liquidity is a reason for banks to like the move away from physical cash. Why customers like it is clearly security, though, you're right.


Have you opened a bank account ins South Africa? If so, what economic bracket do you belong to?


One of the issue with cashless is that banks/financial service provided making money of of the money i.e. $100 making more than $100 with out adding any real value in fees (100 time circulation). I know time is money in most western countries but my place we do one crop a year and sit idle for 9 months. So time is not a money and we would rather give cash to a person get that much worth of a product.

E.g. My sons school charges 2% extra if i use credit card, Rs 20 if i use netbank and does not accept cash. So on a Saturday i am happy pay in cash when i have nothing else to do.

Unless government makes the transfer without fee (now they can print less money and that cost can be used for this infra of transfer), why is cashless better in the scenario where that saved time is not used for anything value generating?

Genuinely looking for answers to this that makes sense rather than saying time is money.


The example of your son's school is fine, but imagine that your son lives in another country. Cash has other problems beside being slow. It's insecure - a person could steal your $20 bill from your mailbox or his, or from the Post Office. It's untraceable - if your son's school says "We never got your payment" but your son swears he gave them the cash, you're stuck in a situation where either your son or the school is ripping you off (I'm sure your son would never do that). And last, it takes both time and money to convert cash to another currency. Taking the cash to somewhere where a person can convert it to the preferred currency is bad enough, and then it costs you money on top of it.


> It's untraceable

Feature of cash, not a bug. It's not the best choice for every situation, but neither is digital, which is why it's important that people have both options available.


Yeah, the ability to make payments outside of the scope of the panopticon is one of the better arguments in favor of cash and against a completely cashless society.


I'd like to think that in time someone will solve this too by some kind of clever obfuscation, but it's not going to be BoA doing it. It's going to be someone who wants to fuck with their status as a state-sponsored usurer. Or at least I hope.

Also consider Bitcoin as a "cashless society" alternative to the financial panopticon - no one's looking over your shoulder there and it's definitely not "cash".


I'm skeptical about Bitcoin as a potential alternative because I suspect that, if you combine the surveillance abilities of the state and the money of the state with the time and effort of the very many clever people who work for the state, Bitcoin will become substantially less anonymous.


Usually traceable unless you use a tumbler to "clean" your coins, even then it's still traceable I think


If it's digital, it's traceable. If it passes through DARPA wires, or FCC waves, it's traceable. There are ways to obfuscate. But never completely like an 'air-gapped', transaction wherein I hand a cashier $5 in exchange for ice cream.

I'm clearly in the 'it's nobody's business except for the parties involved' party...


This.

'Cashless' as in 'cash is illegal' terrifies me. It's nothing more than a force multiplier for the power brokers (banks, govs, etc.).

There will always be corruption, theft, etc. But in one scenario, anyone can do it. In another, only the third (one) party can do it. Tell me which is better, oh starry-eyed Valley dreamer?


Its virtually untraceable. There are ways to find out if the note was new and released by the bank only to that person etc.

Which is why the tinfoil me gets change before doing tinfoil purchases xD


That's why you always get a receipt when you pay in cash - it serves as proof that you paid.


You should be living in some other universe. Most of the corruption stems from the fact that cash transaction history can be spoofed easily. There is no way to link cash with your identity linked to the tax systems. With digital payment, all the payments to/from will be linked to a taxable entity.


True enough, but this wasn't in the context of taxes - it was about avoiding getting ripped of by paying cash then having an entity claim you never paid them. Receipts are still good for this - signed receipts even better.


I've always wondered about the "don't send cash through the mail" thing. How do corrupt postal workers detect cash inside a birthday card?


Transfer convenience justice for all!


I would say that a lot of countries in EU are ahead of US in eliminating cash as well (wether this is good or bad can be discussed). The new EU Payment Service Directive 2 (PSD2) will essentially force EU banks to open apis for account information and payments to third parties.


Do you think it is good (or an "advancement") to eliminate cash?


"ahead of the West"

Ahem, ahead of the US, really. Canada and the EU can be cashless already, with chip cards and direct bank withdrawal at the POS a reality for 99.99% of merchants.


China is cashless. Stores don't accept your cash much. And you have to show a government id to buy anything. And they track you.

But it gets worse than that. If the government wants to punish you, they can just cut you off. Can't buy food, can't pay rent.

Oh you think your friends can help you? China has that covered too, with its shiny new credit system. Being associated with - let alone helping - people cut off from buying food may result in a drastic lowering of score and ability to do business yourself.

On the bright side, used wisely such coersion may he better than outright violence at stopping criminals and terrorists.


That's not accurate. I was just in Chengdu and Shenzhen last month and paid almost exclusively in cash everywhere I went. In fact for smaller vendors and street food, cash is the only option. Many vendors also accept WeChat payments (which seems to be the most common form of payment, at least for casual to mid-range transactions by people in my peer group), and UnionPay network credit cards are also widely accepted. Western credit/debit cards tend to work only at more upscale/modern/larger vendors. From what I've seen of Chinese commerce in various cities, I would be very very surprised if China went anywhere near cashless anytime soon. Cash seems to be a bigger part of the culture there than in the USA.

You do have to show government ID to get a cell phone or purchase long-distance train tickets. Also checking into a higher end hotel. And since using public Wi-Fi requires you to authenticate with your Chinese phone number, that's also effectively linked to your ID. There are many aspects of Chinese society that are easily trackable by the government, but commerce does not seem to be one of them, at least from what I've seen.


Thanks for the personal experience! So my impression was wrong. I'm happy about that.


Wait, is China really cashless now? A coworker of mine was just telling me that he used go with the accountant at his workplace to withdraw millions of dollars in cash from the bank to pay all the employees in cash. He hasn't worked in China for at least over 10 years but I didn't expect a change from million dollar cash transactions being commonplace to cashless in that time.


I dont think he knows what he is talking about. I spent 3 weeks in China in February, and used cash for pretty much everything including accommodation. Admittedly, there are lots of options for paying for things with wechat, etc. but it was nowhere near cashless.


China is nowhere near cashless. Though, they do do a lot of payments by mobile apps like Alipay and WeChat. I was there for 3 months recently and I used Alipay for almost every cos Im from NZ and whilst we have cash here I never use it, every transaction is done via debit card. Was so good when I got Alipay in China cos I hate cash. Still... China definitely isnt cashless.


Thankfully, there is a good amount of space between money under mattresses and a government controlled economy. Your comment is a giant straw man. Canadian and EU systems are private ones and the government has little or no power to directly intervene, short of law enforcement.

The idea that eliminating paper is some sort of boogeyman from Revelations is about as silly as the idea that holding on to your Glock allows you defend your rights against a corrupt government. Neither actually offer any type of protection against these particular issues.

Unless you are wandering around with $20K in cash everyday, your bank account is still subject to the very things you seem to be afraid of. The only thing that changes in a mostly cashless society is your access to your bank account. If the government is going to freeze your account, it matters little if you have a chip card or need to go to the teller.

Thankfully, we in the west have moved most of the management of this to the private sector, and require things like warrants before any real action is done. That can and is an issue at times, but has little effect on the day to day implementation of one method over another.


Sadly, I think the solution in the US and some parts of the EU is even worse than the chinese one.

Try buying Cuban cigars without cash anywhere. Your VISA or MasterCard will mysteriously fail to allow this purchase – because, due to the embargo, these companies just refuse to allow transactions containing the words "cuba", "iran", etc.

VISA and MasterCard also have additional rules of their own, and if you have a society that is cashless, they can just cut you off, too.

This is giving a for-profit entity (which, by its own nature, does not care about you, just about taking your money) far too much power.

Sweden is having that problem: You can’t do anything without a debit card anymore, banks have high fees just to get cash from your account, but the only debit cards you can get are from VISA or MasterCard.

This wouldn’t be an issue if there were many competitors, or even local competitors, or if the systems were open.


I'm Canadian, so not only can I buy Cuban cigars, I can buy them in a store down the street with my debit card. (A real debit card that connects directly to my account, not just a prepaid credit card.) Regardless though, making an illegal purchase isn't a very good reason to argue for cash; in fact you may have more luck changing the dumb laws if people are truly hurt by them.

The US definition of a "debit card" is massively different than the Canadian one. For us, our bank card is the debit card. The same one I use to take money out of my account at an ATM is the same one I can use to buy a $1 coffee.

Why some banks do charge outrageous fees, thanks to the free market there is a healthy market and many banks in Canada are now fully virtual or offer next to no fees.

Just because a system is poorly designed in one locale does not mean the idea itself is flawed, just that it should be implemented in an improved way.


> The US definition of a "debit card" is massively different than the Canadian one. For us, our bank card is the debit card. The same one I use to take money out of my account at an ATM is the same one I can use to buy a $1 coffee.

I keep seeing this pop up, but it's a misconception; we have these in the US too. I have one, although I don't use it for purchases (I use a rewards credit card that gets paid off monthly instead). Here's an example (hopefully Wells Fargo doesn't redirect you because you're in Canada): https://welcome.wf.com/checking/?gclid=CIzL2ong1NMCFVBtfgodb...


It's not that they don't exist, it's that you don't have the POS being widespread enough to support it in a common way.

The Interac system in Canada is pretty much a given for any vendor that has a cash register. That automatically makes every single bank card into a direct debit card. You can choose to use it if you want of course, but it's default for all bank accounts, really.


This is still very wrong. US debit cards work with any credit card-accepting POS. If you can enter 16 digits and expiration date and get a charge, your debit card will deduct that amount from your checking account for you.


> in fact you may have more luck changing the dumb laws if people are truly hurt by them.

But that’s the point.

Cuban Cigars are legal in Germany.

You can legally buy them.

But every payment processor that’s located in the US can not process such a transaction.

Relying on foreign companies for most basic needs means you lose a lot of sovereignty.


Given that I've personally bought Cuban cigars with my Amex card last Christmas as gifts, I'm pretty sure your assertion is false.

It's more likely the case that an American credit card holder cannot buy them, even when he is in Germany, because he's subject to American laws, as I would be if I took a box into the US and started selling them.


No, my assertion is pretty much right.

It went so far that PayPal, VISA and MasterCard ended up threatening several German store chains to stop selling products from Cuba or they’d end all business with the store

It went into national media, and was discussed on reddit: https://www.reddit.com/r/technology/comments/ka26b/paypal_bl...

Rossmann won against PayPal in court, to this date they don’t offer any payment via PayPal.

They came to an agreement with VISA and MasterCard, where if a sale contains embargoed products, everything but these products can be paid by card, but the embargoed products can not.


Processors don't send l3 data for normal consumer based transactions. How would they know you were buying cuban cigars?


> many banks in Canada are now fully virtual or offer next to no fees.

Uhh, which ones? Free chequing accounts have transaction fees for Interac, and with unlimited Interac accounts you pay monthly or must keep a minimum balance. I'm sure there are a couple exceptions, but certainly not with TD, CIBC, NBC, etc.


Check out credit unions. I'm with Coast Capital and pay zero for fees at regular bank machines. "Private" atm fees do cost, yes. Tangerine and PC financial also offer no fee options too, but I'm not sure to what extent.


Were there any facts in your answer? Where did the parent mention Revelations?


I'm not sure what you are looking for. OP linked a cashless society to being the cause of government control. This is false. Government can exert control already in a cash-based society to a sufficient degree. It's more a style of the government in question than the tech used.


You missed the part where I said a government id is required to make a purchase, so there is a single point of failure aka disconnection. This is not true in the USA or other countries where you can have cards from many different banks so if one blocks you, you pay with another. And cash certainly represents a way of paying with no such restrictions.


Acknowledge that not using cash places is "advanced" but also want to say that being able to use cash is not necessarily a bad thing. Cash allows for anonymity, allows for the un-banked to conduct their business, and prevents 100% leverage of your transactions data (not to mention transaction fees) by the companies that handle them.


You are correct in all of this, of course, but cash can always be kept for backup even in societies that are mostly cashless.

The issue of "un banked" can be distinctly American too, actually. Given the extent of social programs in Can/EU, even the nearly homeless have bank accounts, because government funds are pushed directly into accounts, and it's more secure/timely than receiving a physical cheque. Not having a simply checking account is a very rare thing in Canada.


I believe you're referring to Kenya and Ghana instead. It's called mobile money and the Telcos are actually taking a huge bite out of the banking market share


Do you know of the sorts of benefits it has brought in those places?


There's lots of people from Zimbabwe, Malawi, Mozambique etc. who come to South Africa because they can make more money here. Then they send the money back home. But if they send cash back it gets stolen 90% of the time. If they transfer the money it from one bank account to another, they don't lose their money.

Making transactions more customizeable/automated is a great advantage. Why would you not want that? Also, this just came out, so it remains to be seen what long term effects it may have.


> Then they send the money back home. But if they send cash back it gets stolen 90% of the time. If they transfer the money it from one bank account to another, they don't lose their money. Making transactions more customizeable/

WTF are you talking about? No one[1] uses bank transfers to send money to their families in the SADC region: it's quicker and cheaper to use formal and informal money transfer agencies where the recipient gets cash, which is not stolen "90% of the time".

I swear HN seems knowledgeable on all subjects except those I am deeply familiar with...

1. SWIFT transfers do get used for big transactions or paying corporations, but no one I know will be sending amounts less than monthly income this way


> I swear HN seems knowledgeable on all subjects except those I am deeply familiar with...

You can make a fairly valid extrapolation about the other areas where HN seems knowledgeable from this data point.


> I swear HN seems knowledgeable on all subjects except those I am deeply familiar with...

I started discounting what I read here about when I realized that.


Yes you are correct.

When I said, "transfer the money from one bank account to another", I actually meant not sending the money physically, but by using various other means. I didn't know how to word this, and it came out wrong.

And I was talking about the cash being stolen 90% of the time, if you do choose to physically carry it with you back home. (Or trust someone else to do it)


> And I was talking about the cash being stolen 90% of the time, if you do choose to physically carry it with you back home. (Or trust someone else to do it)

This is also not true. 17,000 Zimbabweans[1] travel into South Africa daily by road, most are destined for Musina (nearest South African town to the border) where they buy goods with cash[2]. If theft rate is 90%, that would result in 15,300 cases of theft per day (5.5 million per year) which (a) just can't go unreported, even if you think Zimbabwe is some undeveloped backwater and (b) where do I sign up to join this very effective Thieves Guild? It has to be well-paying.

1. As of 2015, numbers are seasonal. http://www.702.co.za/articles/10509/31-000-people-cross-bord...

2. Because of depleted nostro accounts, most Zimbabwean banks have a maximum international withdrawal of $20-$50 (US dollars) per day


>I swear HN seems knowledgeable on all subjects except those I am deeply familiar with..

Good old Gell-Mann amnesia.


> Making transactions more customizeable/automated is a great advantage. Why would you not want that? Also, this just came out, so it remains to be seen what long term effects it may have.

I fully agree.


Absolutely -- the police can be very corrupt in Zimbabwe so you don't want hard cash hanging around or it will be taken.

The actually official Zimbabwe currency can't really be taken seriously because of insane inflation rates.

US Dollars vary greatly in price. Small transaction fees are nothing to operate cashlessly for some of these people compare to the risk of trying to store cash.

Even India recently banned high denomination notes because they were so associated with drugs and illegal behaviour.


Actual Zimbabwean here: you are so wrong I'll have to ask: have you ever been to Zimbabwe?

> Absolutely -- the police can be very corrupt in Zimbabwe so you don't want hard cash hanging around or it will be taken.

Yes, the police are corrupt but they won't rob you[1], they might try and coerce a bribe.

> The actually official Zimbabwe currency can't really be taken seriously because of insane inflation rates.

This is wrong. It has been wrong for close to a decade because Zimbabwe "demonetized" its currency (Zimbabwean dollar) in 2008 after an infamous bout of hyperinflation - you might have seen/heard of the 100 Trillion dollar note.

1. Unless you have been incapacitated by a traffic accident. A worrying trend has emerged in recent years where passers-by or attending police go through the car and belongings of dead/dying accident victims. See http://www.chronicle.co.zw/chiriseri-corpse-robber-cop-dies-...


Is there really much practical difference between a police officer demanding a bribe and being robbed?

(I've never been to Zimbabwe: if there is a difference between cops "coercing" a bribe and what I'm assuming you mean I'd appreciate the clarification!)


> Is there really much practical difference between a police officer demanding a bribe and being robbed?

Yes: you can say no to coercion but you have no choice when you are being robbed.

Violence (or the threat of it) is a hallmark of robbery: Zimbabwean police will not do that at traffic stops - they are usually not armed. They will, however threaten to impound your vehicle for minor infractions (which would be illegal in most cases) and/or threaten to jail you to wait for your court date. Either of these situations will require paperwork and the money goes to the state and not their pockets, so they make you wait and reconsider the bribe, but eventually let you go. Usually.

Also, in the context of this thread, having cash or money in the bank makes no difference because traffic stops now have portable card machines for "spot fines"!


Analog? No. Even though they might not be smart phones, they must still be digital.


Yes, this programmable credit card for developers is exactly what the low-tech, third-world is looking for.




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