How cash is becoming a thing of the past | DW Documentary (Banking documentary)

paying without cash is fast becoming the norm even tiny amounts with my card it's just easier and it's becoming easier and easier we'll cash soon be a thing of the past when I think about it I pay more without cash than with we cannot use around the world financial corporations politicians and leading economists are working to do away with cash I'd see a future where you will be able to hold digital euro digital dollars directly at the central bank who stands to profit from a world without money and who will be the losers [Music] [Music] without Suzanne ashleeta many people would have problems getting their hands on money here in the so-called Swabian Alps a rural part of Southwest Germany she drives out two villages that no longer have a bank or cash machine when I started my training the bank was still opening new branches I never thought I would end up providing my customers with money and other banking services in this way the kundo Midgar don't ever the underbanked in / tomb of a salt her money van serves the outlying areas around the town of hiding hime she has specially assigned stops where she parks and then sets up shop this Bank on wheels provides the usual over-the-counter services it has an ATM and a machine for printing bank statements many here are fed up that they have no bank in their area that would be much better young people like me can use online banking but I still need cash in pitsee there's no other option in this area anymore there's nothing this is a flashlight this is probably just a temporary measure for the next few years all the banks are closing down branches it's happening more and more they're forced to save money that's what gets it just a few kilometers away from Heidenheim is the town of health and fingon the local bank closed here in 2017 and Helton finger is not served by a money van anyone needing cash here heads to a local inn called the oxen 50 euros can't afford more the manager uses his card reader to debit people's accounts and pay out cash to anyone who needs it he set the limit at 200 euros after all he's not a bank he says sometimes to go somewhere more discreet to pay out the money it's up to the individual some people don't want others to see that they're taking out money Australia what is new in seed cash on tap so to speak his customers certainly appreciate the service as we captain I'd rather have physical money in my hands yeah that's right you can get a watch now to pay for things or transfer money it'll even give you a receipt all this is just the beginning Eastern phone [Music] a world without cash in Sweden that's now all but a reality whether you're buying a ticket for the tram or bus a meal at a restaurant or cafe paying for the parking lot or even the public bathrooms all you need is a card or mobile phone we've come to a flea market in the center of Stockholm there's the usual array of bargains most of them can be purchased for very little but you soon notice that virtually every stand has a sign bearing mobile phone numbers and often a name too [Music] if you find something you like you just pull up your phone and swish it's Sweden's very own mobile payment system sixty crown and you pay with a mobile right yes always people's mobile or no card mostly but like these patients it's really good pay with switch yeah so how does swish work basically you just need a person's phone number so you typing the person's phone number and it will announce like who the person is that it belongs to and then you will just get notified like if somebody swishes me I would get a notification that the money is in my account sweden's banks got together to launch the service as a joint initiative the aim is to simplify payment and cut costs I never use cash from my view if you can be completed without cash I mean though I think that would be good I hate having cash on me they just disappear if you have it in pockets sometimes I even throw them in the garbage because I don't know what the prospect of cash disappearing completely doesn't bother most people here most of the cash that exists today they don't exist in physical money so I think we are already there and when individuals stop using physical money that's just a very tiny small step in this whole process which has been going on for a long time there are dissenting voices but they're the exception I'm forced to we cannot use cash money in Sweden anymore that is very very very little because they take it away so I have to use my card I would like to choose for myself but I will use it like this I don't want to use the card here because I don't know the people who works here and I feel you not say my god the special of my credit card a world away from the big city Lynne runs a gas station on one of Sweden's countless small islands she still accepts both cards and cash where you would say I preferred the credit cards we try to keep the cash amount as low as possible we have this safety box here but if there's also risk within the cash M but if I see as a merger the expense on handling the cash is now higher than my credit card expenses and yeah I would say I prefer if they use the paper once a week Lin counts up all her cash takings and fills out forms the banks in her area have long stopped accepting cash every time she brings notes and coins to the bank she has to make a special trip depositing her cash is inconvenient and expensive but withdrawing cash is even worse the bank charges her nearly 200 euros a few times each year we need to take out change and it cost me last time about two thousand crimes 444 just getting coins and I get the amount I took out coins in isn't even the same amount of money so it costs me quite a lot during a year she drives more than half an hour to get to a place that accepts cash it's basically a deposit box for each bag of money she pays a fee of 20 euros so not surprisingly Lyn can hardly wait for cash to disappear [Music] the main beneficiaries of this development are located on the other side of the Atlantic conventional credit card companies like Visa and MasterCard but also new payment service providers like Google or Apple and Amazon the online retailer has now opened a number of supermarkets without checkouts customers simply scan their phones at the entrance after that cameras track what items they select facial recognition technology allows the system to identify each customer and bill their credit card as they leave a receipt for their purchases then appears in their Amazon Go app [Music] no cash it's a trend that's growing in popularity worldwide last year visa ran a campaign in which it offered 50 restaurants $10,000 each if they agree to stop accepting cash Michael Bryan wasn't able to apply as his restaurant had already gone cashless I've been in this business a long time and I feel like there's a lot of theft when you have cash around so when there's cash in the safe downstairs in the office behind the counter everyone is dipping in everyone's sharing you share your drawer with another employee there's cash always goes missing so it's just like this eliminated theft issue so that that's off the table but the more importantly it's like today I was late to work the place can still open because they don't need to go to the safe get cash set up the store he can just arrive and open up so it's from an operational standpoint it's a breeze it's super super easy a world without cash is not the kind of world Brett Scott wants to see he used to work as a financial broker now he's a writer he believes preserving the ability to pay with cash is vital cash doesn't have anybody who to protect to to advocate for it because it's like a public utility so you have on the one side these highly motivated commercial entities and on the other side the other hand you have cash she doesn't have anybody who everybody uses it but nobody that doesn't have an official spokesperson or it doesn't have a marketing departments so it's a kind of an unfair battle he came over from Britain to attend a conference at Columbia University in New York the question on the agenda here is this the end of cash the conference brought together a select group of financial experts from around the world none of them believed cash stands much of a chance anymore but Bret believes the current trend is a mistake the best analogy to understand this is to think about cars versus bicycles if you're living in a world where there's only bicycles actually maybe it'll be a good thing to get a car you can travel further you can travel faster but that's different to saying you want to get rid of the ability to use bicycles actually what you want is the world where you have different forms of transport in a similar way you want a world where you have different forms of payment so sometimes in certain situations you can use cash sometimes digital but these guys are not calling for that they're saying we want a world with its only digital or in the transport analogy only cars you're only allowed to use cars when he's travelling Brett sometimes pays by card but he mostly prefers to use cash this machine does accept cash in theory only right now it appears to be on strike you might force me to use my bank account they're at the swipe instead it's gonna send a message to my bank in England and tell of a bunch of stuff to them they're gonna alter all their databases before I can get this thing yeah and they're gonna love this is all about to see this and now there's a third party who's gonna watch what I'm doing so this machine is forcing me to do it finally we got it so what role does data play in the whole drive to go cashless [Music] back in Germany at the University of Zagan economics students are wondering how safe digital payment systems are could we become completely transparent just by doing our shopping where companies know everything about us every time I think I know who will my dates will be passed onto now it depends on what website you were on but often things happen very fast and you've no choice when I think about it I pay more without cash than with that's just the way things are moving somehow we live in Europe where we have strict data protection laws so I tend to just be trusting I take the easy way out and there's also this aspect that everyone does it you think it can't be that bad if it's a widespread I think that's a key aspect right now Germany is still very much a society that likes cash but the example from Sweden shows how quickly things can change this isn't emotion it's an issue for two reasons firstly because in many cases you have no choice which takes some getting used to for people in my age but secondly it raises concern because we're losing an element of freedom here we're allowing ourselves to be monitored at the university canteen students have always paid for their meals in cash first they purchase a voucher then they collect their food but here two things are changing so are you paying cash students can now pay with an app on their smartphone so you're paying with blue cone okay you still have to check their plates to make sure you've got it right and what you need to charge for one hot pot okay blue cones as long as they're ready it's super fast so what do the students think it was super easy and it really saved time but we were just saying we didn't notice how much it cost the app doesn't show you that the money's just deducted straight from your bank account so I have to look at my bank up to double check how much I just paid they might get rid of the person that sells the food vouchers so there's a question of jobs but okay that's a separate issue [Music] contactless payment is not yet an issue in Suzanne Ashley has money van she believes that's a good thing every day she sees how many older people already struggle with doing bank payments online or negotiating ATMs don't worry take your time it was because he made a mistake before that the card recorded it but we've deleted that now so it's okay you probably still need help I don't like machines I don't like using my machine I don't trust it Suzanne Ashley ever helps her customers where she can a cashless society is inconceivable to many people here the condemnation debarker the customers want cash they just can't imagine going to the bakery or the local market and paying with their card that truly histo obviously there are pros and cons but if the customers want cash then I'll bring it to them when please back at the bank itself in the town of Heidenheim staff have to deal with huge amounts of coins and notes the Germans may still love their cash but the figures recorded by the banks tell a different story customers are drawing up less and less money meanwhile the bank says the cost of keeping all the cash on hand is huge fish market even give each - yeah those guys produce quite a few tons worth each year they put together over a hundred and twenty thousand rolls of coins a year using our machines my goodness that's a lot you guys may not see I've not seen tears costs which the bank can't cover through the fees that the customers pay what ones in killer Davos in our basement where we keep the money we generally have two employees working full-time so personnel costs alone are around a hundred thousand euros a year then add the cost of materials paper the machine electricity maintenance service costs in theory the rent for the room as well money's an expensive product as it get it isn't often occurs in toil skug overall the cost to banks amounts to billions of euros each year but that's not the only issue threatening the future of cash the European Union is also playing its part putting limits on cash payments and threatening to do away with large euro notes is cash fast becoming a museum piece not at all says Germany's central back but the man in charge of cash management at the Bundesbank freely admits things are changing skipped an Italian it's now gonna do if there's a clear agenda going on here and we mustn't be fooled by that we're talking about a lot of money in swimming companies learn a lot from non-cash instruments like credit cards even people don't talk about that much but they're happy to talk up the cost of cash don't reveal to you is that non-cash payments also cost money bother tongues instrumento all killed Costin that's pathan even ganna fish feeding credit card companies like Visa and MasterCard as well as online payment services like PayPal and the German company pay direct earn their money by charging fees for each transaction in Germany alone there are over 20 billion payment transactions a year by credit card or online payment service it's a global goldmine yielding over a trillion euros a year Kenneth Rogoff is a professor of economics at Harvard University and a former chief economist for the International Monetary Fund he says having a cash system also aids crime and tax evasion I think it's not that cash is bad we should always have it but large notes the days when we need them are gone and mostly they're not used for anything good even in Germany a lot of the businesses that only take cash that's for a reason they're you know not paying all their taxes people want to get payments and cash they don't want to pay taxes in some cases don't want to have regulations and I think the balance is shift where more and more of cash is used for that purpose and not so much for legal activities wrong golf wants to see a world where there are only coins and small denomination bills for everyday use he believes all larger payments should be made electronically so they can be monitored it should bother the government that they're printing these large bills and they don't know where they go it should bother us regulators that many apartments in New York Los Angeles Miami sell for buckets of cash I mean really is that because they're afraid of bags is that because you know they don't you know want to go to the inconvenience of going to the bank and getting a check or doing electronic transfer no I think we all know why the payments were made in cash and that's something we should make more difficult as one of the world's leading economists his arguments have global influence in November 2016 India made a shock announcement overnight the country's largest denomination bills ceased to be legal tender suddenly around 85 percent of India's banknotes could no longer be used corruption and the black-market are the biggest challenges facing our country job since coming to power we've done a lot to combat that I need probably got my four days there was chaos on the streets huge lines formed outside banks as panicked citizens sought to exchange their banknotes what made it worse was that anyone wanting to change significant amounts was required to do so via a bank account something that hundreds of millions of ordinary Indians didn't have I can't get any money the government is killing us with this program I haven't slept for three days you can't imagine the pressure I'm under but the government initiative was certainly successful in one thing it forced many Indians to start using a credit card and various payment apps one common argument is that it's a good thing that millions of people in poorer countries now have bank accounts and access to credit and digital payment systems that's certainly the opinion of T default head of an organization called the better than cash Alliance we're promoting the shift from cash to digital payments because believe there are benefits for development for well being to improve people's life by moving from cash to digital payments he says the way things were done in India was perhaps not so ideal but he still believes the direction is the right one they have started a plan called digital India which means they're promoting the use of technology into government services and all of those combines have created a great platform for government local governing government for companies and for individuals to start being more included in the economies and being at the UN we believe that we can be a neutral convener among governments among companies and among people to make sure that this shift is done in the best possible way the better than cash alliance does indeed operate under the umbrella of the United Nations and works closely with international organizations but is it really neutral and independent it's members include companies like Visa and MasterCard global corporations like H&M Unilever and gap they're mainly interested in one thing making a profit the initiative is also supported by numerous governments and foundations including that of Microsoft founder Bill Gates the better than cash Alliance wants to see people around the world living in cashless societies having the option to pay by card or mobile phone is a good thing Brett Scott believes that too but he has a bigger problem with movements like the better than cash alliance of course it's a good thing if you can have new options for payments and new ways to do things so I have no problem with people getting digital payments methods when they've already when they've been forced to use cash before but that's a very different thing to saying they shouldn't be allowed to use cash all right what what I like is to have the option to use both of them but actually what a lot of these people like to better than cash Alliance and so on they're not arguing that that's they're not just saying that digital payments a good thing they're saying which we should also get rid of cash Brent Scott says that would mean we would only have one form of money in the future the current system essentially you have two forms of money ones the state money which is cash the other is bank money which is private all right it's essentially commercial banks that issue private private monies that were we call it the same thing but these are two forms of money so not all money is the same on the one hand there's cash in the form of bills and coins these are guaranteed by the currencies central bank but most money more than 80 percent only exists in digital form as an electronic figure on our bank accounts this money is created by banks during day-to-day transactions in a world without cash customers could no longer withdraw their money from the bank because it would only exist in electronic form if the bank were to fail customers could well lose their wealth the cashless society is essentially a euphemism for seeing a commercial bank payments society a private commercial bank payment Society that's what cashless society means [Music] so who would benefit most from a cashless society that's what the students at Zagan University want to know today they're listening to Norbert herring he's a business journalist who spent years studying the move to do away with cash [Music] so does extreme fortune if you think of an extreme case where every time you pay for anything even if it's just 50 Cent's you use a payment app you'd be flooded out with receipts it would be quite difficult to check that everything had been booked correctly herrings big question is what happens to the data that we leave behind every time we pay for something he believes it's outrageous that users are forced to sign a blanket agreement with each payment provider and then don't really know what happens to their data afterwards I would only have a choice if I had an option of saying no you can then maybe I have to pay a fee of 10 or 20 euros a month in return I have a choice and it's my own fault if I sign up but if I don't have that choice do we die so what do online payment services do without data to find out the students take a look at the terms and conditions detailed on their website they begin with PayPal the leading online payment system the terms and conditions are super long you can't really just glance over them and get an overview in fact it's almost impossible to read through it all unless you want to spend 3 hours finding out where your data is going to be sent it's a reminder yes you get the impression that it's designed to make you click ok and carry on probably because there's information in there that isn't too good what does PayPal know about its customers and how does the company use that information at the German headquarters the company director is keen to stress that PayPal adheres closely to European data protection laws here Thailand is a dot we share this data only as necessary for the transaction so nobody just receives blanket data passed on by paypal it's always for a specific purpose related to the work that we do the data doesn't remain with these service providers it's only used for the one purpose or if it isn't constructed with nine cents that's big but that purpose is subject to interpretation and can mean many things according to privacy advocates and consumer protection groups in the moment Minzy angrily the moment you agree that the provider can use your personal data for other purposes then make no mistake it will be used no and to stay with PayPal or online payment services when you agree you automatically agree to your data being used for advertising purposes as well so it does get used for other purposes not just a particular service that you use payment services like PayPal are looking to earn more than just the fees they charge they want data so they track their customers behavior closely PayPal's terms and conditions includes a list of third parties to whom personal data can be passed it's over 40 pages long and includes some of the big data collection companies like Google or axiom but also Facebook and Oracle their one goal personalized marketing [Music] fingered us filing in alongside providing a payment service where many people say you don't earn that much as a company there are other business models that focus on this data it's not yet clear exactly which business models those are but it's mainly services and marketing activities and perhaps we can't even imagine it all the different ways that you can make money with data that was filleted not garnish old Mayan Conan verse mohamed allison goo chef Mogan paypal is a US company with headquarters in san jose it has around 230 million customers worldwide so it presides over huge amounts of data I mean these companies don't tell people or how they use it this is an open question I mean I guess we don't know how Facebook users data or how Google uses data there's always internal and there's also different laws in different countries about how financial data can be used but certainly the the question of when you combine different data sets together so for example Google and Apple are getting into the payments businesses or trying to get in there with say Apple pay and stuff and they already have all sort of other data like location data your search data when you combine those data sets with payments data you start to get the sort of three dimensional picture of somebody if the data from our payment transactions can be used to create a perfect psychological and social profile of each one of us what effect does that have how does that influence our everyday lives and the way we live together in society you're gonna have these systems where people are actually aware that they are being watched so they start to change their behavior because they're their concern that their every small action has some implication if you think about you know thirty years ago people didn't think that their every small action was going to be logged by some third party to be analyzed whereas now people are increasingly thinking hey if I do that maybe maybe it's going to impact my chances or something so there's gonna be all these like psychological effects of being having all your small interactions watched China is almost there already by 2020 the state aims to achieve near total surveillance with a nationwide network of cameras and facial recognition technology Chinese internet companies like Alibaba and ten cent already analyzed their customers shopping habits and share the data with the state those who adhere to the government's way of thinking may get a better credit rating for example or a cheaper apartment than those who don't cooperate get punished the aim is for total state control and in a cashless society that could become a reality he's seeing this issue within the broader frame of digital technology more generally which is trying to monitor more and more things and bring more and more things that previously weren't monitored within the realm of formal monitoring and of course that's always framed as being you know this is going to help you know people to get more services and so on and so on but of course on the other hand it's a new form of control good privacy soon be a thing of the past Sweden is fast becoming a cashless society the country is famous for its openness and people here are surprisingly relaxed about privacy issues a couple of years ago there was the site's on online the way you can see where your neighbors are and your co-workers and I mean most of us are curious couriers so we take a little peek but we are also open with it when we meet we are able to discuss our how we consume what we are from the beginning we are transparent in our communication to each other in Sweden we found very little concern that private data could be abused and certainly no worries about state control for Lynne's family paying without money is normal the children use of both cash or okay cards I can just go to my own children I have three three sons and the smallest one is now six and they have their only cards that they pay with and either if they go to get to buy a milk they used to credit card over here to buy ice cream so we see that the small ones use carts as well Lin is well aware that a cashless society means banks take on a huge amount of power and that's a cause of concern to at least one institution in the Swedish capital the central bank it believes the move towards more electronic payments is positive but also for sees potential challenges in eradicating cash completely if cash would go away and we tend to think about cash as being the last line of defense of to speak that if you can pay in over the way you can still pay in cash but this cash is not there and we experience some kind of disturbance in the electronic payment systems how how do we pay then how can we get food fuel and these kind of things that we need in our daily life there is still many questions surrounding the whole idea of a cashless society as one of the guardians of Swedish financial stability the central bank or Riggs Bank is busy weighing up its options the Riggs Bank should possibly issue a digital means of payment like a digital currency and we quality are equal now this is something that would be completely new for central bank to do and is no one that we can really watch and learn from so we have to do all the footwork by ourselves and we are just investigating yet to learn more about that option so how would a digital currency issued by a central bank work take Germany's central bank the Bundys back it issues euros in the form of coins and notes in future ordinary Germans might have an account directly with the Bundys bank unlike with a private bank this money would continue to belong to the account holder in theory making it as secure as cash or would it be better to retain a minimum supply of cash and have that written into law for the students in Siegen there's plenty to consider it's give it 10 or 15 years and I think we won't be able to use cash hardly at all any more baggage lot of things continue on their current trajectory I think we're heading towards a totally monitored society where everyone will know that their lives are transparent and relaxed accordingly try not to draw too much attention to themselves what the future holds is not yet clear what is clear a world without any cash at all poses numerous risks the main problems of cash to society are one that creates a far more surveillance so you create essentially a financial surveillance state - it excludes a lot of people who can't get access to digital payment systems three it opens you up to way more risks of cyber Security's of massive cyber security risks for it decreases the resilience of your payment systems so for example cash has no central point of failure you know you can't bring it down as it were where it's a digital payment systems you can turn them off literally and that point is important for stuff like in politically it's important because one of the implications of cacistis is the increased ability to essentially turn off people that you don't want to do things so you can it could be used for political repression as well back in Germany's rural southwest Suzanne Ashley aheh is heading home how was her day family I enjoyed it I had quite a few customers and they were all satisfied her money van will continue to deliver cash to outlying regions for now at least as for the future she's not sure either that's as far got guns I hope cash won't be abolished completely I think it's important for people to still have the option of paying with cash for day-to-day shopping but obviously it's possible I can certainly imagine it happening even though I hope it works okoma for Stella une gong about yeah [Music] you [Music]

Channel: DW Documentary

Views: 1,944,052

Rating: 4.5832047 out of 5

Keywords: Documentary, economy, politics, cash, crime, credit cards, freedom, Visa, Mastercard, Paypal, money, banks, finance, transaction, credit card, credit, bank credit, bank, cashless, DW, DW Documentary, full documentary, cashless payment

Id: GbECT1J9bXg

Length: 42min 26sec (2546 seconds)

Published: Wed Nov 21 2018

Reddit Comments

[u/ourari]

This documentary highlights how we lose a degree of privacy and freedom when we trade in public means of payment for privately-owned payment platforms. Germany and Sweden are featured in the documentary.

The part specifically about privacy starts at 28:19, but I'd recommend watching it in full.

[u/AlsfastcarsZ28]

Good we should have cash I can’t stand waiting for cc