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A Cashless Economy Locks Out the Poor

nytimes.com

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Re: A Cashless Economy Locks Out the Poor

#31

Post by chrisseaton »

mcv wrote: post #29

If the problem is that some people don't have a checking account, wouldn't it better to provide them with a cheap/free checking account? Even if all local shops accept cash, there's still tons of stuff you can't do without a checking account. On the topic of cash-free living: I only use cash for 3 things these days: to buy cheese, to pay my cleaning lady, and for my son's weekly allowance. Even the babysitters accept…

> wouldn't it better to provide them with a cheap/free checking account?

I don't know about everywhere in the world, but aren't most 'checking' (most people don't use checks any more) or current accounts already free? They make money off investing your deposit. How much are people paying for their current accounts?

Re: A Cashless Economy Locks Out the Poor

#32

Post by kalleboo »

zimbatm wrote: post #9

Another side-effect is for donations. In London it's possible to live without any cash. Even markets are accepting cards now. There are often charities that are asking for money at the entrances of the tube. The UK is depending quite heavily on charities for people in need. This year it looks like they started equipping themselves with contact-less payment systems. It would be interesting to be able to see the number…

> What is quite sad is that beggars are not able to equip themselves with contact-less payment systems

In Sweden I've seen a beggar with a "Swish" number displayed. (Swish is the domestic cashless person-to-person payment system, all you need to use it is a cell phone and a bank account). So it's not impossible for beggars to be cashless.

Re: A Cashless Economy Locks Out the Poor

#33

Post by GraemeL »

msh wrote: post #28

I can see the potential problems, but maybe a part of the solution would be to legally give the poor a right to a basic/free bank account.

Forcing people that are struggling to live day-to-day to use bank accounts just makes life worse for them.

The first thing that happens when they're in debt is that their bank account gets frozen to pay the debts leaving them with nothing.

Forcing all transactions to be electronic takes away the margins they live in. It's no longer possible for them to pay 1/2 their rent with a promise to pay the rest in a couple of days when they get paid so that they can feed their children during that period. The rent comes out of their account on time and their children go hungry until payday.

Re: A Cashless Economy Locks Out the Poor

#34

Post by schrodinger »

oh-kumudo wrote: post #26
UweSchmidt wrote: post #8

Earlier quoted context omitted.

China is not a cashless society, and as long as you have the option to use cash the effects are minimal (as described in the article). A cashless economy will not only crush the poor, but also hit the middle class: it allows for a negative interest rate (can't withdraw your savings). I also suspect that it could enable many subtle ways to coerce consumers into certain behaviour: All your money is now just the number…

> All your money is now just the number you see in your bank's app That is effectively the reality of any modern economy. https://www.investopedia.com/terms/f/fiatmoney.asp Banks don't have the cash if everyone rushes to it and cashes out.

Putting your money in a bank _was_ your choice though; you could have kept it under your mattress.

Re: A Cashless Economy Locks Out the Poor

#35

Post by ganzuul »

CPLX wrote: post #22

A society without cash is a society in which every person has no choice but to get the permission of someone they don’t know and will never meet each and every time they seek to obtain food, water, shelter, or transportation, and that permission can be revoked instantly, silently, and invisibly at any time. This is now before the city council in NYC, as the article points out, so the topic has come up in conversation…

Cryptocurrency would bypass that.

Re: A Cashless Economy Locks Out the Poor

#36

Post by vishnugupta »

CPLX wrote: post #22

A society without cash is a society in which every person has no choice but to get the permission of someone they don’t know and will never meet each and every time they seek to obtain food, water, shelter, or transportation, and that permission can be revoked instantly, silently, and invisibly at any time. This is now before the city council in NYC, as the article points out, so the topic has come up in conversation…

I agree with your assertion, however:

> that permission can be revoked instantly, silently, and invisibly at any time

This can happen with cash too, as 99% of Indians found out to their utter dismay on 8 November 2016!! [1].

Granted that this is a Black Swan event [2] and the revocation was done publicly. However, as someone who lived through this and experienced it first hand, I stopped trusting cash from that day onwards. I carry just enough with me to get by for couple of days.

I don't know of any other single event that sent shockwave through 1300+ million humans literally overnight.

[1] https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...

[2] I sincerely hope so. Though it's been carried out a few times in India, thankfully not within the same generation.

Re: A Cashless Economy Locks Out the Poor

#37

Post by lsc »

chrisseaton wrote: post #31
mcv wrote: post #29

If the problem is that some people don't have a checking account, wouldn't it better to provide them with a cheap/free checking account? Even if all local shops accept cash, there's still tons of stuff you can't do without a checking account. On the topic of cash-free living: I only use cash for 3 things these days: to buy cheese, to pay my cleaning lady, and for my son's weekly allowance. Even the babysitters accept…

> wouldn't it better to provide them with a cheap/free checking account? I don't know about everywhere in the world, but aren't most 'checking' (most people don't use checks any more) or current accounts already free? They make money off investing your deposit. How much are people paying for their current accounts?

In the USA, most checking accounts are "free" as in "Free if you jump through hoops" - I mean, often they are hoops that are trivial for those of us who have a good job, like "free if you have direct deposit"

I mean, remember that if banks are making money off investing your deposit, they don't have much interest in maintaining accounts for people who don't have much money to invest.

I know at times when I didn't have direct deposit (corp to corp contractor, before I figured out how to setup all the requisite infrastructure on my end) I usually ended up paying like $10 a month or more for my personal checking. Every time I went in the bank, the teller would have some different wacky scheme for getting me free checking, usually involving transferring money between my accounts every month... but it was a lot more work keeping up with how to get the free checking (the requirements for people without direct deposit kept changing) and $10/month was cheaper than the time to figure it out.

But, I mean my point is that I think checking is not free if you don't have a decent job. add to that the money they charge you if you aren't organized enough to make sure there is enough money in the account to cover the fee, and yeah, I can totally see how poor people wouldn't have a checking account.

Re: A Cashless Economy Locks Out the Poor

#38

Post by ganzuul »

lifeisstillgood wrote: post #18

A hipster-ish coffee shop I use has now gone cashless entirely - you cannot pay with cash. They must have hit a tipping point where the faff of cash drawers, trips to the bank and so on were not worth it.

Seem to remember something about 'legal tender'. Meant you had to accept cash payment. Of course you could refuse the customer on other grounds...

Might not be a thing in the land of hipster-ish coffee shops.

Re: A Cashless Economy Locks Out the Poor

#39

Post by jopsen »

CPLX wrote: post #22

A society without cash is a society in which every person has no choice but to get the permission of someone they don’t know and will never meet each and every time they seek to obtain food, water, shelter, or transportation, and that permission can be revoked instantly, silently, and invisibly at any time. This is now before the city council in NYC, as the article points out, so the topic has come up in conversation…

Can't we build trustable payment providers?

Re: A Cashless Economy Locks Out the Poor

#40

Post by CPLX »

vishnugupta wrote: post #36
CPLX wrote: post #22

A society without cash is a society in which every person has no choice but to get the permission of someone they don’t know and will never meet each and every time they seek to obtain food, water, shelter, or transportation, and that permission can be revoked instantly, silently, and invisibly at any time. This is now before the city council in NYC, as the article points out, so the topic has come up in conversation…

I agree with your assertion, however: > that permission can be revoked instantly, silently, and invisibly at any time This can happen with cash too, as 99% of Indians found out to their utter dismay on 8 November 2016!! [1]. Granted that this is a Black Swan event [2] and the revocation was done publicly. However, as someone who lived through this and experienced it first hand, I stopped trusting cash from that day o…

Yss but that’s an entirely different dynamic, as they can’t single you out personally in that scenario, they have to cause massive social disruption and — crucially — loss of their own credibility.
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