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The Almighty Buck Technology

Predicting a Future Free of Dollar Bills 753

An anonymous reader writes with this story about how a cashless society might work and how far-off in the future it is. "...We're not there yet, but a cashless society is not as fanciful as it seems. Recent research suggests that many believe we will stop using notes and coins altogether in the not-too-distant future. New payments technologies are rapidly transforming our lives. Today in the U.S., 66 percent of all point-of-sale transactions are done with plastic, while in the U.K. it's just under half. But while a truly cashless society is some time away yet, there is raft of groundbreaking technologies that will make cash a mere supporting act in the near future."
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Predicting a Future Free of Dollar Bills

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  • 666 (Score:5, Funny)

    by Anonymous Coward on Sunday July 13, 2014 @07:56PM (#47445385)

    Good luck everybody

  • by turkeydance ( 1266624 ) on Sunday July 13, 2014 @07:59PM (#47445393)
    ...that they know about.....are done with plastic.
    • by TrollstonButterbeans ( 2914995 ) on Sunday July 13, 2014 @09:04PM (#47445725)
      Are we assuming all transactions humans do are with merchants?

      Naive as hell !

      Crappy list of examples, I'm sure there are hundreds of examples: 1) What about if I want to buy your [insert bike or computer or whatever]? 2) Baby sitter? 3) Kid's allowance? 4) Pay some kid kid to mow yard. 5) Underground transactions (illegal stuff)

      The importance of cash will continue to decline with transactions with merchants, but it will never remotely approach "cashless".
      • by profplump ( 309017 ) <zach-slashjunk@kotlarek.com> on Sunday July 13, 2014 @09:50PM (#47445955)

        The assumption that some sort of special merchant status will be required to accept non-physical payment strikes me as unfounded. Even today it's fairly easy for individuals to send money via ACH -- or a paper check, like individuals have used for years -- and it's not hard to imagine ways to make a similar process even easier and less dependent on banks.

      • by Pseudonym ( 62607 ) on Sunday July 13, 2014 @09:50PM (#47445957)

        Never say "never". The kid who occasionally mows my lawn has a smartphone. I can see a day, not too far off, when this is the customary mechanism for doing that kind of payment. As soon as the transaction cost goes down to negligible.

        So yes, there may come a time when government-supplied currency tokens are obsolete for almost all transactions. That may not be in my lifetime, although the phasing out of postage stamps may happen in the next couple of decades. Illicit transactions may just move to barter.

        • by sjames ( 1099 ) on Sunday July 13, 2014 @10:21PM (#47446071) Homepage Journal

          Personally, I find the idea of being 100% dependent on the finance industry to carry out a 'legitimate' transaction to be at the very least distasteful.

          Do we really want to give banks the power of taxation?

          • by thegarbz ( 1787294 ) on Monday July 14, 2014 @03:42AM (#47447071)

            Who said anything about a finance industry? It's almost like there needs to be a system of electronic money which can be transferd just by sending bits from one smartphone to another. These bits would be like coins. Ideally this system should be decentralised and not involve any financial institution.

            These coinbits would seem to solve all of these problems. They just need a catchier name.

        • The point many people miss is that with modern technology there is no requirement for you to use local currency. You could use your phone to pay in Rubles or Pounds just as easily as in Dollars. What if you can pay bills in Bitcoins using your phone? Large parts of the economy might just vanish as far as the taxman knows. Big business has spent a lot of time/money/effort in not paying taxes. What if everyone does that? The ONLY thing required for this to happen is secure communications.
          • by arth1 ( 260657 ) on Sunday July 13, 2014 @11:12PM (#47446257) Homepage Journal

            The ONLY thing required for this to happen is secure communications.

            That's like saying "the ONLY thing required is world peace".
            What admins and engineers have known for a long time, and which people like Snowden provided evidence for is that secure communication is not a given, and highly unlikely to be an option for the masses.

            If the government won't let people have a shadow economy they can't monitor or control, expect physical alternatives to take their place. There's plenty of precedence for turning to valuable metals when the currency cannot be trusted. And there are examples of governments banning both gold and silver trade as a kneejerk reaction, but that just moves the market to something else.

        • by amiga3D ( 567632 ) on Sunday July 13, 2014 @11:58PM (#47446463)

          Any transaction that doesn't want to pay taxes moves to barter. This shit is a government wet dream. Talk about control! If you piss off the government in any way they flick a switch and you're done. Actually they probably just click an icon on a screen. Now you can't use your money, it's gone! I can see it coming though, it's inevitable.

      • by TWX ( 665546 ) on Sunday July 13, 2014 @10:02PM (#47446005)
        Yup. It's also common to get discounts for cash. Some places like pawn shops, used bookstores, junkyards, and other businesses will always offer discounts over published or listed prices for cash, and those discounts are often much steeper than just the cost to the merchant of a credit card transaction, and sometimes are quite a bit more than the choice by the merchant to under-report taxable transactions would account for too. I suspect that in part it's a matter of the business having the money now, as opposed to having to wait until the end of the month to get paid. Plus there's always a possibility of messing up a credit/debit transaction, which can result in having one's account (and all outstanding revenue) put on-hold until the processor chooses to release it.

        Credit/Debit works best for large companies where there's little to no haggling, and where the sheer volume of transactions allows that merchant to negotiate good terms with the processor, but they're still at the mercy of the processor as far as account and transaction fees are concerned, and then there's the other issue of security. Target, Neiman Marcus, and PF Changs are all going through that right now, and I don't doubt that it'll get worse as time goes on, and while "pin and chip" cards may help, I expect that someone will figure out how to steal through those too, and the cycle will just continue.

        And then there's the personal sale angle. I'm not going to take paypal or have the ability to process credit cards for a yard sale or some crap that I'm selling through the classifieds or craigslist. Given how I'm mainly just trying to recoup something in the process of a sale, adding more hoops or steps will just result in my not bothering to sell junk anymore.
  • Why? (Score:5, Insightful)

    by Anonymous Coward on Sunday July 13, 2014 @08:01PM (#47445407)

    Why would you ever want a cashless society? Cash is one option you have. Taking it out removes an option and therefore freedom.

    • Why would you ever want a cashless society? Cash is one option you have. Taking it out removes an option and therefore freedom.

      So you can audit and authorize where it goes. I can't audit a guy stealing cash from my wallet.

  • Drugs (Score:3, Interesting)

    by slowdeath ( 2836529 ) on Sunday July 13, 2014 @08:01PM (#47445409)
    As long as there is a demand for illegal drugs, there will be a need for cash. Lots of cash. Dealers don't take plastic.
    • Drugs (Score:4, Informative)

      by Sable Drakon ( 831800 ) on Sunday July 13, 2014 @08:09PM (#47445445)
      But they could always take bitcoin, paypal dead-drops, or many other forms of e-payment.
    • Re:Drugs (Score:5, Informative)

      by rtb61 ( 674572 ) on Sunday July 13, 2014 @08:12PM (#47445463) Homepage

      There are a full range of benefits of paying with cash. Limiting the number of credit card transactions to make it easier to track proper and improper ones. Discounts that are available when purchasing with cash. The trades prefer to be paid cash and discount accordingly somewhat fair as their payment can not be tax deducted unless you can hide you home behind a business. It works when the power is out. It keeps perverse privacy invasive government agencies and corporations from tracking every single thing you do.

      • by penix1 ( 722987 )

        And add to that the transaction fees charged to merchants as I said below. They are ridiculous. Many merchants where I live have a minimum charge you can make with a card. Something like $10 or $20.

  • Not me... (Score:5, Interesting)

    by Anonymous Coward on Sunday July 13, 2014 @08:03PM (#47445419)

    As someone who has had a recent issue with a certain major bank(they closed the account and sent cashiers checks to me for the balance. Waiting 2-3 days without money wasn't pleasant)...I will never go cashless. Relying on these financial institutions for every transaction is something I will not trust. I won't get into the whole NSA/FBI/etc. potential tracking of all my purchases.

  • Useless coins (Score:5, Insightful)

    by Gavin Rogers ( 301715 ) <grogers@vk6hgr.echidna.id.au> on Sunday July 13, 2014 @08:07PM (#47445439) Homepage

    Let's see the future free from pennies, first.

    • by djKing ( 1970 ) on Sunday July 13, 2014 @08:16PM (#47445483) Homepage Journal

      In Canada we no longer have dollar bills. We have dollar coins. We also got rid of the penny.

      • by Irate Engineer ( 2814313 ) on Sunday July 13, 2014 @09:11PM (#47445753)

        As someone from the U.S. who just recently traveled in Canada, I have to say that I like their current currency system a lot. Using loonies ($1) and "twoonies" ($2) coins is nice as they can actually be used easily to buy useful things, which is the primary reason why (I think) dollar coins haven't really taken off in the U.S.

        In Canada, parking meters, soda machines, etc.. take $1 and $2 coins. It beats having to feed a pile of small coins into a meter or machine, or trying to iron out and feed a frayed and mangled $1 USD bill into a soda machine and having it rejected. The coins are also fine for face-to-face transactions; they are not unusual. In contrast, Susan B. Anthony dollars in the U.S. can get you some funny looks and many vendors flat out won't accept them, legal tender or not. You can go buy a beer in Canada with the change in your pocket. The Canadian coins make small daily transactions simple.

        In the U.S., getting change is a pain in the ass because you invariably wind up accumulating pennies which are a nuisance. You can't use them for tolls or in machines in most places, and toting around a pile of pennies large enough to actually purchase anything with is ridiculous. So you either start carrying a satchel of pennies around trying to pay exact change, or you toss them in a jar, spend time rolling them, and exchange them at the bank for larger denominations (yay! A trip to the bank just to dispose of pennies!). You can also use services like Coinstar, which takes a cut (yay! A special trip to dispose of pennies AND paying some money to a company taking advantage of the dumb system!). In Canada, prices are merely rounded to the nearest 5 cents. Sometimes it is a few pennies in your favor, sometimes it is a few pennies in their favor. On the whole it is a wash, and you would have to be a really miserly SOB for it to worry you.

        Canada has cash pretty well figured out. It's not that difficult, U.S.!

        • Re: (Score:3, Informative)

          I'm Canadian and I agree with you on all of these points. When I visit the US I find it annoying that a) your paper money is such crappy quality, and b) it all looks the same making it harder to tell the difference in my wallet. I always end up with a million $1 bills because out of habit I end up breaking 5's, 10's and 20's to pay for things. In Canada, up until 1996 we still had $2 bills before the toonie (the $1 bill was changed to a loonie some time in the 80's).

          The penny round just started a few years

      • by Eythian ( 552130 )

        Similar in NZ, $1 and $2, and the smallest coin is 10c. However, we have something like 80% of point of sales transactions being electronic (off the top of my head), so it doesn't matter too much. This article is a bit of history really :)

    • by OzPeter ( 195038 )

      Let's see the future free from pennies, first.

      Years ago I was at the Denver mint (where they make pennies) and I questioned the tour guide there about getting rid of pennies (as per Oz). For some reason this tour guide couldn't comprehend a world without pennies, and started bring up all sorts of straw men arguments about how consumers would be ripped off, and other things (which I can't quite recall now). It was weird.

      But what is also weird is that the US has a $1 coin. But I think that I have only ever seen it in use in Chicago. Apparently USia

      • Re: (Score:3, Informative)

        by mhkohne ( 3854 )

        Don't get me started on pennies. The reason we still have them is mostly sentimental. If it were my choice I'd drop the penny AND the nickle, AND the quarter, introduce a 20 cent piece, and be done.

        Dollar coin never took off because they kept making bills. Other countries that have dollar coins stopped making the bills, so the coin took over as the bills left circulation. The actual economics of the bill vs. coin in the US are quite interesting due to how well made our bills are and how long they last in ci

      • by Nutria ( 679911 )

        Apparently USians don't like them.

        Merchants don't like them because there's no room in the cash drawer. Same with the $1 coin.

        Get ride of the penny and $1 bill and there would be room for the $1 coin and $2 bill.

  • by LazyAussieStudent ( 1192267 ) on Sunday July 13, 2014 @08:10PM (#47445447) Homepage
    A butcher near me already has http://canningsfreerangebutche... [canningsfr...ers.com.au]
  • Class issue here. (Score:5, Insightful)

    by jythie ( 914043 ) on Sunday July 13, 2014 @08:12PM (#47445467)
    While cashless might make sense to a middle class with easy access to technology and banks, there is a significant percentage of the population does not have access to such things and they probably will not any time soon. As much as 10% of the US population has no bank access, no SS ID, no IDs of any type, etc.
    • Re: (Score:3, Insightful)

      by nesdave ( 3690251 )
      The only problem I see with your consideration is that the people who will make the decision won't have a concern for those who 'Have Not'.
  • Going back to cash (Score:5, Informative)

    by El_Oscuro ( 1022477 ) on Sunday July 13, 2014 @08:15PM (#47445475) Homepage
    Last week I swiped my card at a gas station pump before noticing the tamper proof seals had been broken. I have replaced the card, but while waiting for the new card I used cash. You tend to conserve more money when it is cold, hard cash instead of of just swiping a card. Less surface area for compromise as well.
    • by the eric conspiracy ( 20178 ) on Sunday July 13, 2014 @08:52PM (#47445671)

      Exactly true. Market research shows people spend more if they are using a CC. Part of the psychology is of course that cash you are carrying around is generally a more limited asset than your CC balance limit.

      • by AthanasiusKircher ( 1333179 ) on Sunday July 13, 2014 @09:26PM (#47445835)

        Exactly true. Market research shows people spend more if they are using a CC. Part of the psychology is of course that cash you are carrying around is generally a more limited asset than your CC balance limit.

        While that's true, it's beginning to change, particularly for many younger people. I've personally always found cash easier to spend, because it wouldn't be in my pocket if it weren't available. Credit cards, though? I need to think about my bank account balances and charges for the month before using those. But I agree that most people aren't that careful.

        However, the big game changer for younger folks is financial tracking software -- so now you can see instant balances changing whenever you charge or debit. With financial tracking software, the CASH becomes the "funny money," because it isn't tracked automatically.

        That means that whatever money is in my wallet has already disappeared from my "accounting software," so it's basically already spent, as far as I'm concerned. I've talked to many people who feel the same way now... cash is now the "free money to spend" while credit transactions see an immediate visceral impact as you look at your moving balance.

  • Privacy (Score:5, Insightful)

    by epyT-R ( 613989 ) on Sunday July 13, 2014 @08:24PM (#47445529)

    1. Privacy is more important to me than convenience. I like the idea that I can go into a store and buy something without someone making a recording of it and tying it to me.
    2. The issue isn't to make the dollar go away, or even the penny go away. The issue is to fix the inflation.

  • by mhkohne ( 3854 ) on Sunday July 13, 2014 @08:30PM (#47445555) Homepage

    "Lots of people think it will happen" means about nothing. People are HORRIBLY bad at predicting future trends. More so en-mass.

    What people say they want and what they really want (and demonstrate by doing) are pretty much unrelated. So even if people SAY they want cashless, I doubt they'll actually vote that way when the rubber hits the road.

  • by wiredlogic ( 135348 ) on Sunday July 13, 2014 @08:46PM (#47445651)

    Cashless only works if the poor can get bank accounts without having to pay hefty fees if they can even qualify at all.

    • by jonwil ( 467024 ) on Sunday July 13, 2014 @09:53PM (#47445967)

      The problem isn't banks, its US banks.

      Here in Australia I recently opened a bank account including an attached VISA Debit card (lets me pay with VISA using my own money). When I did it, the bank didn't care about my financial circumstances or anything and I was able to open the account with a single dollar coin.

      The only account fees I have paid since I opened this account was an overseas transaction fee when I bought something from overseas with the VISA and a fee (charged by the ATM operator) when I used an ATM not part of the RediATM network.
      I pay NO monthly fees and NO transaction fees for using RediATM ATMs, EFTPOS, VISA in Australia, bPay or internet banking.

      No reason why a bank has to make it hard for people to get a bank account or charge huge fees, they just choose to because they are greedy.

  • by pubwvj ( 1045960 ) on Sunday July 13, 2014 @09:24PM (#47445817)

    Banks love you using plastic. They tax every transaction. Paying with plastic costs you at least 2.5% and as much as 5% extra because the merchants must build that into the price to pay the banks for the credit card transactions. This is a hidden inflation. A hidden tax.

    Banks also like it because they can collect data on your behavior and that is a salable product which makes them more money.

    • by theycallmeB ( 606963 ) on Sunday July 13, 2014 @10:29PM (#47446097)
      People point this out a lot, and it is very true, and merchants love to whine about it, but they never point out the costs of handling cash.

      You have to count it into the till, make change, balance the till, count and recount your deposit, and then haul it to the bank to deposit and pick up your change order, or pay an armored car service to do it for you. And hope nobody robs you in the meantime, or slips you a bogus $50.

      For cards, big stores don't even need to print slips for their records, it is all in the system. For small stores you can just staple the slips together by type and drop them in a box in case someone gets a stick up their butt and decides to audit you.
  • by gemtech ( 645045 ) on Sunday July 13, 2014 @09:24PM (#47445821)
    One of my clients made me get it to get paid, their accounting department was paying net 90 days and required all kinds of crazy insurance to get me paid through them. So paying with the department credit card was just easier. So when I setup the credit card account, they told me it would cost me 4.0%. Every month new and mysterious (to my account rep.) charges would show up: a fraction of a percent here, fixed fees there. He could never give me an explanation of what they all were, and they weren't consistent from what I could tell. I told them that those charges were ok with me as I was passing that along to my client, but it was hard to do that when I didn't know what I would expect (I was running around $10K a month through it for some other part time contractors and equipment). When the project was over, I couldn't cancel that account fast enough.

    So I perfectly understand why some stores have a minimum charge or won't take credit at all, it's a big hassle and cost.
  • by mysidia ( 191772 ) on Sunday July 13, 2014 @09:25PM (#47445827)

    The electrical grid is anything but reliable.

    It's simply unacceptable to say, that if the power goes out, then we're screwed and can no longer trade.

    We need the ability to trade regardless of operating on or off the grid, and plastic or cashless methods can't do that.

  • by Hsien-Ko ( 1090623 ) on Sunday July 13, 2014 @09:29PM (#47445857)
    "The economics of the future are somewhat different. You see, money doesn't exist in the 24th century. "
    "The acquisition of wealth is no longer the driving force of our lives. We work to better ourselves and the rest of humanity."
    • by epyT-R ( 613989 )

      I remember that episode from childhood, and even then, it stuck out as communist propaganda. Even in the universe, it was obvious that the federation had currency (credits), politics, and played a lot of the same games the world governments do.

  • by IonOtter ( 629215 ) on Sunday July 13, 2014 @10:43PM (#47446165) Homepage

    From Alien: Resurrection:

    GEN. PEREZ: Elgyn, these were very, very hard to come by. *slides a stack of cash to Elgyn*

    ELGYN: So was our cargo. You're, uh...not about to plead poverty on me, are you, General?

    GEN. PEREZ: No. Just saying very few people deal in cash nowadays.

    ELGYN: Just the ones don't like to keep business records. Yourself, for example.

  • by voss ( 52565 ) on Sunday July 13, 2014 @10:46PM (#47446177)

    Some private company would invent something to replace it.
    There are just too many microtransactions on too many levels to totally replace cash.

  • by ILongForDarkness ( 1134931 ) on Sunday July 13, 2014 @11:52PM (#47446433)

    Ex. power blackouts like NY had last year, or ~15 years ago when New England and Ontario had a power outage for a couple days. Most things will shutdown anyways in those scenarios but still are businesses really not going to want to be able to sell things because their card reader isn't working? Or how about your wallet gets stolen, credit card gets hacked etc? With cash you might/likely have some around the house. How many people have a spare copy of their bank card and credit card and will it work once you report the other one as missing? What you are just going to not buy anything for 3-5 days while you wait for another one?

What this country needs is a good five cent ANYTHING!