Will cash be obsolete

[cmerc]

Civilization, as we know it, will collapse at some point. Cash will certainly be needed at that point!

[chrisild]

Civilization, as we know it, will collapse at some point. Cash will certainly be needed at that point!

If civilization actually "collapses", that may well include cash management and circulation.  

[Elak]

If civilization actually "collapses", that may well include cash management and circulation.

Gold will live again as a currency then, and people may well make it into shiny triangular slabs of specific weights for ease of counting and portability.

[Figleaf]

It's the other way around, Elak. If gold becomes money again, civilisation collapses (restraining myself from holding a long and boring economic exposé on the quantitative theory of money).

Peter

[Elak]

Shiny pebbles then! Or whatever the farmer who is producing the food can convince the taxman to accept in payment.

[chrisild]

Yesterday was Disaster Day for many German retailers. Now that "cashless" has become popular (for various reasons including the pandemic and contactless payments), payment terminals that do not work can be a major problem ...

Lots of stores, gas stations and other businesses that use a certain type of terminal (Verifone H5000) suddenly were out of luck yesterday and still are today. The machines, apparently quite popular here, did not work - no debit cards, no credit cards, neither contactless nor with "inserted" cards. Nada. German news here or there for example - or just do a web news search for H5000.

Problem is that, if the customer's card has an issue, s/he can try a different card, or use cash of course. But if the devices or their software are at fault ... Sure, pretty much every place affected would accept cash, but for some people that meant an extra trip to the nearest ATM. Except that these days the number of those machines is going down as well. If you actually need cash, you can "buy" it at a grocery store, and the amount shows up on your card bill. Wait ... card? Errrm.

[Tirant]

Yesterday was Disaster Day for many German retailers. Now that "cashless" has become popular (for various reasons including the pandemic and contactless payments), payment terminals that do not work can be a major problem ...

Lots of stores, gas stations and other businesses that use a certain type of terminal (Verifone H5000) suddenly were out of luck yesterday and still are today. The machines, apparently quite popular here, did not work - no debit cards, no credit cards, neither contactless nor with "inserted" cards. Nada. German news here or there for example - or just do a web news search for H5000.

Problem is that, if the customer's card has an issue, s/he can try a different card, or use cash of course. But if the devices or their software are at fault ... Sure, pretty much every place affected would accept cash, but for some people that meant an extra trip to the nearest ATM. Except that these days the number of those machines is going down as well. If you actually need cash, you can "buy" it at a grocery store, and the amount shows up on your card bill. Wait ... card? Errrm.

I know that, it has happened to me before. I have a payment terminal for my business, and it has failed more than once, either the machine or the net. Fortunately, all the times it happened people had cash to pay me, but i'm sure that some day i'll have to let a customer go away by free.

When it happens, i always take the chance to dismiss this type of payments: "Machines do fail; you know what never fails? Cash. You give me a banknote, i take it and good bye". MACHINES DO FAIL!!! When will people realize?

[FosseWay]

You're both right that technically a customer can use cash in the above circumstances, in the sense that cash is valid for the transaction, it's physically present and both parties know what it's worth and can personally accept it.

The scenario where banks get hacked, cards get magnetised or there's a power cut affecting card payment terminals has been raised many times in the last 20-odd years. It's often used as a (IMV perfectly sensible) argument for saying "Hold up a sec and think about this" to all the cashless society enthusiasts. But what no-one seems to grasp is that virtually all retailers these days have electronic points of sale, even for cash transactions. It's no more possible to account for a cash transaction during a power cut than it is for a card transaction if everything gets sent through the same electronic system at the cashier's terminal.

And how retailers choose to get round this is very culturally specific. I have never come across a shop in the UK or Sweden that would accept cash but not cards in circumstances where the cash transaction couldn't be processed as normal (such as a general power cut). It's "more than their job's worth" to sell a sandwich for £3 that isn't registered for VAT and GKW else. On the other hand, when I was in Rhodes a few years ago, there was an island-wide power cut (unhelpfully timed precisely with my sister-in-law's wedding). You couldn't buy anything with cards, and ATMs didn't work, but plenty of basic food/drink outlets accepted payment by cash. How/whether the retailers reconciled their takings with an electronic system afterwards I've no idea, and that's rather the point - it's not my problem as a customer.

[chrisild]

But what no-one seems to grasp is that virtually all retailers these days have electronic points of sale, even for cash transactions. It's no more possible to account for a cash transaction during a power cut than it is for a card transaction if everything gets sent through the same electronic system at the cashier's terminal.

That depends on the specific scenario or situation, I think. If for some reason the entire cash register system is broken, then cash will not be helpful either, due to what you mentioned. A small store may well handle this differently (cash, pen, paper ) but for larger places that is not an option.

In this particular situation, however, it was that one brand and type of card payment device that did not work. The cash register itself was OK, so cash could be used in these places. And as long as there is an ATM at or near the store, an issue such as this one can be dealt with. I read about problems at gas stations using that particular card reader - some people got their gas, wanted to pay afterwards, and could not do that. "Errm, can I drive away in order to get cash?" "Sure, but please leave a deposit." "Fine, but what?" etc.

Not sure whether the "H5000 problem" has been fixed by Verifone by now. If not, the good thing is that by now people have been alerted. Also, today is a holiday, i.e. considerably fewer store purchases.

[chrisild]

Not sure whether the "H5000 problem" has been fixed by Verifone by now.

No, it has not been taken care of so far. Not sure whether (part of) the problem is that Verifone is in the US and the affected machines are in Germany. But apparently (Spiegel, German) their communication leaves a lot to be desired. The problem seems to be an expired certificate, but when/how that might be fixed – who knows.

Yes, these days I do have a little more cash than usual. Then again, the last three times I wanted to pay with a card (yesterday and today): Grocery store – no problem. Bakery – no problem. Gas station – no problem. They all use "non-H5000" devices ...

[eurocoin]

The antivax/conspiracy people may come in handy to inform people of the importance of cash (which will also help this hobby in general). Recently, I was surprised to see them sharing the image below, and similar ones, on unrelated popular pages on social media. Although I have to choose my words carefully, I can't say that they don't have a point to a certain extent. The image says: "Stay in control of your freedom - PAY CASH".

[Tirant]

Well, for this time i have to agree the conspiranoids

[FosseWay]

The conspiracy theorists are missing the point.

Their fear is that EvilCorp will take over the world/their country and force everyone to pay for things in a way that tracks their spending habits, along with similar monitoring of movement using facial recognition and of electronic communication through ISPs. These are real fears, as we see with the Chinese "social credits" and the way Putin has managed to shut down electronic free speech in Russia.

But, as we see with China and Russia, this technology already exists. If a government has the will to implement this kind of monitoring, and the existing state institutions and the country's citizens allow it to, it will. It doesn't matter whether most/some/none/all transactions are already electronic. There is a parallel with nuclear technology. The technology exists: there is no way within the confines of normal continuance of civilisation that the genie can be put back in the bottle, so that we collectively forget how to split the atom. Many countries make peaceful use of nuclear power to generate electricity. Some also make offensive use of it to make bombs. The key is not to try to turn back the clock - both because that's impossible and because many babies would be thrown out with the bathwater. Rather, the onus is on us to do our best to prevent misuse of potentially dangerous technologies.

Returning to the debate about cash and cashlessness: There are issues with going cashless, including access to the financial system and to retail outlets for vulnerable groups such as recent immigrants who cannot yet get full banking services, older people who haven't kept up with technological change, and people with learning difficulties or disabilities that affect their ability to use technology. There are also issues concerning resilience if electronic systems fail.

These are much more important issues to be raising in this context, IMV, than the FUD of potential misuse by a hypothetical tyrant. The tyrant is hypothetical; the other issues exist here and now. But the important issues are also difficult to solve, and by banging on about hypothetical dictators we take our eye off the ball of dealing with the causes and consequences of people being vulnerable or society lacking resilience.

[redlock]

Then again, the last three times I wanted to pay with a card (yesterday and today): Grocery store – no problem. Bakery – no problem. Gas station – no problem. They all use "non-H5000" devices ...

Pure luck. Perhaps, you should play lotto today 

[Figleaf]

Agreed with FosseWay. The issue is not how you pay, but how banks shove their risk down their clients' throats. I just got another portion of that when a phone hacker forced me to restart my phone from zero.

The most comical consequence is that Waze now reports speed control zones in Ukrainian, while everything else is in Dutch (I am not making this up). The most irritating is that after two weeks, I still can't use contactless payments. I did succeed in restoring control over my investment account by taking a 600 kilometres detour to visit the bank branch office of the bank that lords over my account in a process that involved, among other idiocies, typing the same passwords 12 times. Clearly, banks are much more concerned about their own safety (which they call their customer's safety) than about a fair balance between safety and ease of use of their customers.

Peter