> * The amount transferred is known to you. Whereas with credit cards, the merchant terminal could lie and show you an incorrect amount, and you could approve the fraudulent transaction.
> * The maximum amount you can lose is limited by the amount of cash in your wallet (let's say $100), not by your credit limit (let's say $3000).
To be fair, all of these are American oddities. In Europe where people mostly use debit cards and neither chargebacks nor returns for functional goods bought in store exist, all of these are true for card transactions. Only the privacy point remains.
Example, as a teenager mowing lawns for your neighbors, you just told the IRS you made $x,xxx mowing lawns for the fiscal year. Not that your neighbor named Susan at 1234 fake street paid you $xxx/month to mow her lawn 4 times a month, or that Joe from 4321 real street purchased the upcharged package that includes managing his compost bin.
Cash is the undisputed champion of privacy for financial transactions.
I can use cash to buy groceries or a soda at the corner store each day, and while I suppose I'm not entirely anonymous to those parties I may as well be. The grocery store is certainly reporting my cash transaction to the appropriate authorities.
Sure, this doesn't apply for all use cases. However, it applies for a lot of things that currently are tracked by using electronic forms of payment. These spending patterns were simply not tracked on an individual basis until the advent of the shopping club cards, which eventually became redundant due to the use of electronic forms of payment.
The level of tracking from "I take out $400 in cash every payday from the ATM" vs. "I spend it in $10 increments on the following items" is wildy more invasive.
However since the transactions are cash, no identifying information will be shown, so it's anonymous.
As the buyer I have the CHOICE to declare it as a deduction or not. So it is also anonymous at my discretion.
Are they? I can't speak for Europe, but in Australia we have a chargeback system. If I don't recognise a transaction on my credit or debit card, I can request a chargeback via the bank.
It would surprise me if none of the 40+ countries in Europe offered this. What do you do if there's a transaction you don't recognise?
In speaking for how it is in Slovenia, it might be different in other EU countries.
You realise that's a bad thing, right?
>* Transactions are bounded. Once you walk away, the merchant cannot take more money from you. Whereas with credit cards, they could store your number and charge you again at a later date, without your knowledge.
And if they do that you can... issue a chargeback.
> You realise that's a bad thing, right?
Frauds where people ask for payment via Venmo or Paypal for Craigslist transactions are incredibly common. Craigslist recommends using cash to avoid getting defrauded, because transactions being final is a feature for in-person transactions, and a good one at that.
This is not remotely a guaranteed thing. It works until the credit card issuer says nope.
Chargebacks are 100% at the pleasure of your issuing bank, they are not your choice in the end. Most consumer banks will more or less have an internal credit score where they allow you a small number before they start pushing back. Depends on how much profit you make the bank.
Chargebacks against small vendors are mostly guaranteed, but once you go up against a large party the tables very quickly turn against you.
I'm sure you also realise that chargebacks can be abused by these users right?
The merchants can get their (PayPal, Stripe, etc) accounts locked or shutdown and their money withheld for months due to the payment processors locking the money and they always side with the bank, which they have zero context whether if the chargeback is fraudulent or not.
Only recently I've learned that in the USA people don't pay through bank transfers.
In Europe it's main mode of payment to give you bank account number and amount and expecting you'll make the transfer. Either directly by interacting with your bank or through payment processor which has integrations with various banks and will prepare the transfer for you and redirect you to your bank's authorization gateway.
"Transactions are final. The merchant has no risk of chargebacks." Is this a plus all the time?
What if I buy something and the vendor just takes my money and does not send me my purchase? I have no recourse.
This is a large reason why many cryptocurrency vendors online require you to use irreversible payments (cash, wire transfer) to buy crypto, in order to match the finality of crypto transactions.
The answer is yes for almost all businesses I've seen.
This is actually my 100% use case for crypto. Making legal online purchases at a discount to avoid credit card fees, not retarded speculation or the spectre of crime all the nay-sayers worry about.
How frequent are these types of frauds, e.g., by merchants/terminals? Doesn't seem to be a thing around where I live - is it a US thing?
>f frauds, e.g., by merchants/terminals?
Pretty common. Virtually everyone I know has been defrauded by CC or debit card at least once. When it happened to me my bank dragged me through a months long process after which they refused to refund the fraud, essentially accusing me myself of lying, and ultimately they even shut down my checking account. For this reason I've basically divested from keeping cash in banks, now that I've learned the fraud protection is a farce and the fed is going to inflate it to hell anyway.
I think you are confusing state sponsored violence and street violence. The state can always get you, unfortunately. Crypto does try and address this, to varying degrees of success.
" I'm not much interested in being baited (whether intentionally or not) into answering this kind of legally precarious question about it being MY fault that I 'made' someone hurt me." Really not trying to bait you here at all. Seems like we have a communication issue, maybe my fault. all the best.
---------
>Well, actually, they could get a court order to seize whatever is in your pockets while some burly men hold you down.
If people are going to come kill me in the street then come let it happen. Better than cowardly seizing it behind my back via locking a number in a database. And in the third world, it's typically a lot easier to find accounts than it is people.
I can't say I know what would happen, I've only been attempted robbed at gunpoint once. I wish I could say I kicked their ass, but all I managed to do was hurt them enough that we stalemated and they went off to find some other victim.
False [0].
[0] https://ij.org/wp-content/uploads/2015/03/seize-first-questi...
'Federal civil forfeiture laws give the Internal Revenue Service the power to clean out bank accounts without charging their owners with any crime. [ goes on to give many examples of bank accounts subjected to civil asset forfeiture ]'
Whether one is easier than the other depends on circumstances. Domestic bank accounts are easily found. Those who may want to seize them quite likely work in an office, down the street from a judge who will rubber-stamp if needed.
Seizing cash requires a lot more:
0) Willingness to engage in policing in the field rather than cowardly slob sitting in office searching for new victims.
1) Determining the person actually has the cash
2) Knowing where the cash is
3) Employing force against any persons resisting the seizure, and risking that person may employ self defense.
Seizing a bank account usually requires none of those above. You know where the cash is (the bank), the bank will tell you how much they have, and the bank employees aren't going to resist the seizure from the police. For all we know someone could bury cash somewhere and not even a metal detector is going to pick that up.
So you're correct. To me, the massive difference is a bank account seizure is just how much easier it is to seize. (and to most people, just how much more devastating it is)
>happening to drive through a jurisdiction where the police like stealing from people, and having them confiscate your car and the contents of your wallet.
It's worth noting it usually goes more along the lines of police asking someone if they have a "large amount of currency" and the person being dumb enough to answer in the affirmative and then being dumb enough to consent to a search. They have to ask a lot of people too to even get that far, so not exactly a fast or easy process. Sure there are all sorts of other scenarios, but seizing cash in the field randomly like this is a lot more work than some IRS agent sitting in their office, running some VBA script to find someone in a few seconds who had a couple consecutive transaction that ran above a sum of 10k.
Just as another couple examples:
- Civil asset forfeiture is something that local police departments around the country can do to people within their jurisdiction. Seizing a bank account is something only the IRS can do—and the IRS is known to be woefully understaffed and under-resourced at the moment.
- As I understand it, when the IRS seizes a bank account, that money doesn't go to the IRS; I believe it goes into some more general fund, but I'm afraid I'm not well-informed about that. Civil asset forfeitures go, in most cases, directly to the police department that seized them. That makes the incentives completely different. (Even if I'm wrong, and assets seized by the IRS go into its budget, that still doesn't create the same kind of incentive that we see with these police departments, given the number of stories of officers in these small podunk towns driving extremely expensive cars off the job and buying extremely fancy police toys on the job with the seized money. The IRS, being a much more supervised federal government department, is going to have to account much more clearly for its expenditures.)
You may want to read up a bit on how this stuff works.
[0] https://ij.org/report/policing-for-profit-2/grading-state-fe...
Neither side can resist the temptation to use the other side to "resolve" disputes.
That's a decent amount of extra work.
You can find any number of shortcomings, but the point is crypto _does_ solve many of this problems.
After all, most people trade in public blockchain crypto through CEXs and leave their coins in hot wallets. Effectively the same as using a bank.
To put it differently, crypto _can_ solve many of these problems, but it does not _inherently_ solve them, it takes a skilled and cautious person to use crypto in a way that does not link to their identity.
And I also agree that cryptocurrency is still not easy to use, but I'm not sure why it needs to "inherently" solve something (even though it has intrinsic value in certain dimensions). HTTP was inherently made to transfer structured text. No one was hoping it was going to replace the postal service, and yet the majority of the worlds information is transmitted using the protocol.
And just because you couldn't use "HTTP" when it was being first developed by researchers, it still served a purpose for them at the time and gradually became the invisible technology that it is today. Now replace "HTTP" with "cryptocurrency" and "at the time" with "now".
This is exactly what I meant when I said that maybe cryptocurrency wasn't ready for (collective) you.
And to your point and from my perspective, I would disagree as there are many cryptocurrency experiences where "understanding it" is reduced to similar UX as using zelle or paypal. More than likely, you've (or whomever you're describing) already made your (their) opinion and aren't interested in understanding.
- It is open and requires that you protect the numbers on the outside or access to the data on-chip. Many of these security problems have hurt consumers over and over again despite how "easy" cards are to use specifically because those users don't understand the complexity of the card's system. - It requires you to insert, tap, or swipe it to borrow funds. This interaction is not obvious for a child who has never done this before. It is a learned behavior. And that learned behavior for interfacing with the credit card network with your CC token is complex enough that the US has had significant friction introducing chipped and contactless credit cards over the past years. Because the interface and the UX are there for cards too.
I'm not sure the reason for your distinction between understanding the UX vs the complexity of the system. You can't consider UX without considering complexity... one follows the other necessarily.
- Transactions are final. The merchant has no risk of chargebacks
So as a consumer, if I pay for something and the merchant stiffs me, I have no recourse? That's supposed to be a selling point?
- The amount transferred is known to you. Whereas with credit cards, the merchant terminal could lie and show you an incorrect amount, and you could approve the fraudulent transaction
Do you have any evidence of that actually happening? Even anecdotal evidence? I've never experienced nor heard of anyone experiencing a situation where a point-of-sale terminal showed one price and they were charged another. I have heard of merchants (airlines, especially) tacking on "hidden" fees, but those hidden fees become quite visible when you get to the final checkout page for and you see that the price you're about to pay is x dollars or euros more than the price in bold letters on the listing for the price. I have never once seen a merchant (online or off) display a price on the checkout step and then have a different amount charged show up on my credit card statement.
- The maximum amount you can lose is limited by the amount of cash in your wallet (let's say $100), not by your credit limit (let's say $3000).
Incorrect. The Fair Credit Billing Act (in the US, not sure what the equivalent EU legislation is) gives consumers 60 days from the statement date to dispute transactions. If the consumer files a dispute, the financial institution has 90 days to correct the charge, or give a written explanation as to why they think the charge was valid. If the transaction is fraudulent, the consumer's liability is limited to $50. I have way more safety against fraudulent transactions on my credit card than I do with cash or check.
- It's easy to understand - you have physical tokens with numbers on them. There are no accounts, statements, minimum payments, interest, fees, reward points, customer service phone numbers, etc.
Only if you're storing your cash at home, under your mattress. If you're using a bank account, you most assuredly have to deal with accounts, statements, interest and fees.
The only valid advantage of cash (and crypto) that you've cited is:
- Transactions are private. There is no middleman between you and the merchant to censor your transaction or to sell your purchasing habits to advertising companies.
That is why I have a crypto balance. That is why I have a certain amount of cash in my wallet. If Visa, Mastercard, etc. get into a dispute with my merchant, or if the centralized payment infrastructure goes down (i.e. due to a storm knocking out power), I still want to be able to pay people. But would I want to use cash for most transactions? Absolutely not.
I know people who prefer cash, because they are not tech-savvy and all the digital stuff including cards gives them anxiety. There is a difference between just having a bank account and using all the digital services that come with it.
In Germany there is an online service called barzahlen/viacash (they are renaming) https://www.barzahlen.de that allows people to pay cash for online shopping. After checkout, the buyer gets a code that can be scanned by cashiers in certain drugstores and supermarkets, so buyer can pay in cash.
I use cash where possible in order to avoid leaving a massive data trail that inevitably will get exploited. It is a method of self-defense for me.
* Transactions are private. There is no middleman between you and the merchant to censor your transaction or to sell your purchasing habits to advertising companies.
* Transactions are final. The merchant has no risk of chargebacks.
* Transactions are bounded. Once you walk away, the merchant cannot take more money from you. Whereas with credit cards, they could store your number and charge you again at a later date, without your knowledge.
* The amount transferred is known to you. Whereas with credit cards, the merchant terminal could lie and show you an incorrect amount, and you could approve the fraudulent transaction.
* The maximum amount you can lose is limited by the amount of cash in your wallet (let's say $100), not by your credit limit (let's say $3000).
* It's easy to understand - you have physical tokens with numbers on them. There are no accounts, statements, minimum payments, interest, fees, reward points, customer service phone numbers, etc.
Cash obeys the principle of least privilege much better than cards do. Though, I think electronic payments can be a lot safer if we had a culture of push payments ("I send $123 to Amazon to purchase widgets") instead of pull payments ("here's my credit card number, have fun").