A Cashless Society, 3

 
 
 
 

Vocabulary

 

relic	obviously	near future
rush	transfer	find/found/found (2)
loyal	get rid of	let’s face it
sector	downside	cumbersome
armor	store (2)	correspondent
vault	secure	vulnerable
till	as well	operate (2)
GDP	incentive	rise/rose/risen
grasp	monitor	primarily (2)
means	neat (2)	looking to
fraud	efficient	consumer
detail	safeguard	pay attention
infer	privacy	patchy (2)
suffer	bill (2)	concerned
allow	trail (2)	harvest (2)
threat	purpose	launch (2)
hack	massive	transition
solo	assume	steal/stole/stolen
notice	breach	pretty much
floor	prevent	collect (2)
risk	run away	disappear
retail	mint (2)	transaction
trend	evident	phase out
ballot	involve	inevitable
sort in	demand	left behind
suffer	area (3)	representation (2)
entity	succeed	drive/drove/driven (2)
rely	heavily	fundamental
carry	remote	coverage (2)
exist	terminal	evolution (2)
enact	seal (2)	central bank
exert	gradual	circulation (2)
cyber	ensure	presumably
extent	evasion	announcement
digital	currency	physical (2)
insure	payment	well underway
	sort of	leave behind

 
 
 
 

Video

 

 
 
 
 

Transcript

Somewhere in the near future, physical money will become like these: relics of a different age, and will only be found in places like this. In other words, hard cash will disappear.

It will become electronic, transferred by things like these.

So what’s the rush to get rid of cash?

And what’s the cost?

Let’s face it: money is cumbersome for consumers. And banks.

Matthieu Favas, Finance Correspondent: “You need to mint the cash, you need to print the bills. You need to transport them in armored trucks. Store them in secure vaults. And you need to sort in at the till as well.”

Operating in cash, cost countries about 0.5% of their GDP every year.

But cost isn’t the only incentive to move toward a cashless future.

Matthieu Favas, Finance Correspondent: “Demand is rising — primarily demand from the young generations, who are looking for fast, easy-to-use means of payments.”

Digital payments aren’t just easy, they’re neat.

Matthieu Favas, Finance Correspondent: “It becomes easier for governments to monitor tax evasion and fraud. So we will have less of that going on, probably.”

Having every single payment automatically recorded is efficient.

But there’s a downside.

Matthieu Favas, Finance Correspondent: “Let’s assume for example that a country that used to be democratic, where people were not paying too much attention, about safeguarding their privacy, becomes undemocratic, and someone wants to control citizens more closely.

They will try to infer from what you buy, your political leanings, potentially. And generally speaking, just monitor what you are doing, in ways that they shouldn’t be doing.”

Old Documentary: “The ballot boxes are kept locked and sealed.”

Living in a democratic country doesn’t mean you shouldn’t be concerned.

Matthieu Favas, Finance Correspondent: “There are also worries that private companies perhaps might use this data in ways that are not safe or that you might not like.

And for a number of sectors, knowing what you do with your money is very important.”

Electronic money trails can allow governments and private companies to access and harvest personal data.

But there’s another threat worrying banks — cyber-attacks.

News Anchor, One: “It was a high-tech bank robbery.”
News Anchor, Two: “Captain One suffered a massive hack-attack involving . . .”
News Anchor, Three: “a hundred million Capital One customers’ accounts.”
News Anchor, Four: “had their personal information stolen.”

In March 2019, Capital One bank was hacked.

Matthieu Favas, Finance Correspondent: “A solo hacker managed to steal away a a hundred-and-six (106) million people’s personal details, in a matter of days. And that attack was noticed just a few months after.

You can see that a lot of companies are not very well protected yet against such threats. Pretty much every day, we hear about data breaches, cyber-attacks that are successful. It’s much harder to prevent an attack than to be on the hacker’s side because you only need to succeed once as a hacker.

Once upon a time, you would have two guys coming in. They would tell everyone to be on the floor, put the money in a bag, and then run away with the money.

And you would get insurance against that. You knew what the risk was.

Nowadays with cyber-attacks, that can happen anytime, they have take any form. So it’s very hard to insure against.”

Still, many countries are fast moving towards a cashless society: in Sweden, the number of retail cash transactions per person has fallen by 80% in the past ten years. The trend is even evident in far more cash-loyal societies.

China’s digital payments rose from four percent (4%) of all payments in 2012 to thirty-four percent (34%) in 2017.

The trend is inevitable, but a gradual transition is key.

Matthieu Favas, Finance Correspondent: “It’s important that we have a sort of control as to how fast this happens. Because if that’s not the case, some people might be left behind.”

Some people may find it difficult to grasp how much money they have without the physical representation of it. Not everyone knows how to use internet-banking technology. And people living in remote areas where internet coverage is patchy may find they have to drive for miles for their basic needs.

And there’s another sector of society that relies heavily on cash:

Matthieu Favas, Finance Correspondent: “People living on the street don’t carry card terminals with them. So it would be very hard for them. Well, first of all, to collect money and to pay for things. They will be among the people who suffer the most of it.”

Going cashless is just the latest evolution of money in the modern economy.

But it raises a fundamental question: what is the value of money if it doesn’t physically exist?

Matthieu Favas, Finance Correspondent: “Central banks enact monetary policy by exerting control over the amount of money that is created and that is in circulation.

And they can do it because they are the only entities that print and create money. The purpose of it is to control the amount of money that is used by the entire economy.

In a cashless economy obviously this becomes much harder because money presumably can be created by other entities.

And so central banks are actually starting to realize this, especially after Facebook made the announcement that they were looking to launch a digital currency. It shows you the extent to which central banks are already thinking about the future of money.”

The move towards cashless societies is well underway. But governments need to ensure that, as cash is phased out, the vulnerable in society aren’t left behind.

*     *     *     *     *     *     *

Questions

1. According to the report, soon, people can only banknotes in museums and personal collections. True or false?

2. Which is more economical, cash or electronic transactions? Why are they more economical?

3. Is everyone equally enthusiastic on using digital payments? Why do many people and institutions prefer e-payments?

4. There are only advantages (benefits) and no disadvantages (drawbacks) to e-payments. Is this right or wrong? What are some drawbacks?

5. What is the worldwide trend in monetary transactions?

6. For some people cash transactions are more practical. Is this correct or incorrect? Who are these individuals?

7. In the future, will it be easier or trickier (more complicated) to regulate a country’s finances?

 
 

A. My friends all pay via bankcard and, or smartphone app. Yes or no? Who uses cash and who doesn’t?

B. Has it changed over the years?

C. Are there fears or suspesions over e-payments?

D. What will happen in the future?

E. Should people, banks, retailers, governments and tech giants do anything?