What do you think about paying with cash vs a debit/credit card in physical stores?
Do you prefer cash for privacy reasons? Does cash inconvenience you (such as getting lots of coins in change)? Are you concerned about CBDCs in the future?
Personally, I mostly pay with card because I like to have a small, light wallet, but I’m also concerned about cash becoming more obscure one day, because once it’s gone it’s gone, and once there’s nobody using cash there’s nothing preventing the switch to CBDCs. In terms of privacy, I’m not that bothered because my physical purchases are just stuff like a supermarket or restaurant, but of course I’m aware that this still means the bank will know where I go and what kinds of stuff I’m into. In the long run, I’d hope Monero will become a real alternative, but I don’t see it happening.
At the same time I have already noticed that in my country (UK) a lot of stuff isn’t possible with cash anymore. For example, public transport in London requires a contactless card - either debit/credit card or Apple/Google Pay or the Oyster Card (which you can top up with cash but the second you top it up with a bank card they already know who made all the trips with that Oyster card). Shops and restaurants often have “card only” signs. Meanwhile, I never see a “cash only” shop anymore since Covid. Some supermarkets have phased out self-pay machines with cash support and now only have the card-only machines, meaning if you want to pay cash you need to go to the big long queue with all the senior citizens in it.
It’s funny because until about 2018 I was paying everything in cash, then for unknown reasons started using my card more and now I can hardly imagine going back.
So if you’re someone who prefers cash for privacy or freedom reasons, how much would you inconvenience yourself? Would you demand to pay in cash even in card-only places?
I think paying with cash is dying. By the next generation, I don’t think cash will be used, in the UK. To make things worse, it’s rumored that the UK Gov are looking into migrating to cryptocurrencies. This honestly sounds awful, and I hope doesn’t catch on. Another wasted, expensive Tory project.
As for my own habits, I mostly use card. Due to a disability, cash is inconvenient for me. Plus, I like online/mobile banking. The ability to go over my finances, see what’s in/outgoing, and the added security, it’s nice. I also have more self-control with my card. With cash, I notice I tend to spend more, as It’s no longer accounted for in my statement/balance. Psychologically, it’s there to spend.
I should note that the London situation isn’t the same across the UK. I’ve been on public transport where some buses do allow card payments, but those that do, add £10, for every bus the card is used on… wow did that catch me off guard. Also, most places allow BOTH cash and card. Why exclude customers? Also, while rare, I’ve also seen cash only stores. They’re usually… somewhat suspicious, where you’re quite confidant that they’re doing something illegal. It could be that they’re housing illegal immigrants, selling drugs, or tax evasion.
Recently while traveling I saw a NO cash sign at a hotel, in the US.
A year ago, I pulled a large (to me) amount of cash out of the bank. Using this cash showed me how things have changed. With interest rates going up I moved some funds from one bank to another paying 4% interest in a savings account, as well I deposited about 80% of the cash remaining back in the new account.
For privacy and security I have been using prepaid cards in place of cash. Anywhere that credit is easy to use and is accepted, especially where I hand over my card to be processed out of my line of sight, I use prepaid. This is often a restaurant. While traveling we would open a Tab at the bar often this is where your card is accepted and returned after you close out your tab.
For online banking masked credit cards over prepaid.
I made a post here on how I am using prepaid cards and major credit card transactions. Using cash would be great but honestly it has been for giving my kids some money or paying a neighbors kid for doing side work.
It is not necessarily just about your bank (and the CC company) knowing what you purchase. It goes the other direction as well, cash is more private than a CC with respect to the merchant or business as well. With Cash, there is no personal info exchanged, no strings attached, its just a simple transaction.
The sad reality is cash is dying. Even in poorer countries like India and Nepal, cash is being replaced with QR code based mobile payments. The number of people using digital payments in these countries has rapidly increased to a point where the change over the past three years is visible.
The banking system sucks for privacy. The government spies on financials, and I’m pretty sure that purchase data will eventually be used (or is already used) by CARD companies for insurance and credit score calculations.
Mike bazzell has discussed the use of prepaid cards for “cash only” places. Unfortunately, where I currently live, there are no prepaid cards without extensive KYC. Maybe in the UK, you would be able to get them at a local asda/tesco/morrisons/sainsburys. It’ll be the most private way to pay digitally.
If not, revolut does allow for the creation of prepaid cards. Those should work to reduce the sale of card data (kind of like privacy dot com?) but probably would still affect credit score.
A last option would be to go to Rayners Lane. I haven’t been to London in a long time, but the area was full of shady half licensed shops which will usually accept cash. Bonus points if you can speak Tamil.
The sad reality is that cash payments are dying out, and ATM withdrawal fees are slowly going up. Cash is dying because card payments are simply more convenient, and my current habit of withdrawing cash regularly and using it will eventually become foolish or unaffordable.
Personally, I wouldn’t use digital payments in person even if they were private, simply because I would rather my phone remains a communication tool, not a multipurpose one.