by Gemma Hunt
The Cashless Economy: Are We Sacrificing Privacy for Convenience?
advertisers, market research companies, and others, love to know what we are doing with our money. The more information they can gather about what we are buying and from where, the happier they are. Knowing who is buying what can be very profitable for anyone who is trying to sell to us, and companies have been gathering this kind of information for many years.
A Cashless Society
way that this information is gathered has changed as new ideas have enabled us to pay with cards, over the internet, or via our mobile phones, which have all opened up new routes for people to learn about our spending. The ability of companies to track our spending is now being enhanced by the rise of the cashless economy. Debit and credit cards have been widely used for many years, but typically in places where other forms of payment, including cash, were also being accepted. The growing prevalence of cashless payments, either through contactless credit and debit cards, or contactless payment cards with more restricted uses, like the Oyster card for public transport in London, is changing things.
people may enjoy the convenience of being able to make payments more quickly with these cards, and not having to carry cash around, there is a drive towards eradicating other forms of payment that could cause some serious problems. At the most obvious level, eliminating other options will antagonise some shoppers, particularly those who find it difficult to obtain credit or debit cards, or who still prefer to use cheques when making larger purchases. It could also cause problems for independent retailers, since card companies charge them for every payment they process. However, as well as restricting our ability to choose how we would like to pay for goods and services and adding to the bills for small retailers, these new technologies also have the potential to pose a more serious problem, one that could impinge upon our right to control the information we share with others. The cashless economy is opening up a world in which every penny we spend could potentially be tracked and monitored.
An Economy of Information
and retailers are keen to encourage the growth of the cashless economy. About £2 billion was already spent through contactless technology in the UK last year, and card providers are promoting their use through working with everyone from major retailers to people providing the traditional summer donkey rides at our seaside resorts. Once they succeed in creating a system in which cashless payments become the norm, or even the only option for payment, we are trapped. If we want to make a purchase, we will have to share our identities or enable companies to gather other information about us, such as our spending patterns.
Cash Not Accepted
through contactless card technology is already inevitable in some situations. For example, if you live in or are visiting London, and you need to use public transport to get around, it is now impossible to pay with cash. Although you are not yet obliged to provide any personal information by using a contactless card or creating a named account to use with your Oyster card, you are still generating valuable data that companies can use to target consumers, and if you need to take a journey by bus in London, you don’t have a choice.
if this situation were replicated, not just on other public transport systems around the UK, but in all of the shops, pubs, restaurants, entertainment venues, and other places where you spend your money. Now think about what happens to the data you will produce when you make your purchases. Imagine what a company would be willing to pay to gain access to details about exactly who is buying what, and consider how willing your card providers would be to sell this valuable information.
Joining the Loyalty Scheme
effect, the drive towards a cashless economy is forcing you to provide the kind of information about the way you spend as loyalty schemes have been collecting for years. This information is an incredibly valuable commodity. It has the potential to be used by retailers to target you with personalised advertising messages, and it could even be sold on to other companies. Even if your data is being used alongside your personal information, or you are able to opt out of these kinds of schemes, your data might still be harvested anonymously for market research purposes. If we accept a cashless economy, we may effectively be agreeing to join a huge loyalty scheme. We might get convenience rather than points for participating, but the effect is the same. We share everything we do with the companies that want to sell to us.
1. Is a cashless society really on the cards? Christopher Beanland for The Independent, 17 July 2013
2. Contactless Payment Technology: Is this the New Way to Spend? Ben Jailler for Money
3. Cashless donkey rides come to Blackpool Beach, Barclaycard
4. London Buses go cashless, The Guardian, 6 July 2014
5. Oyster Online, Transport for London
6. Cashless Society: A huge threat to our freedom, Scott A Shay for CNBC
7. Loyalty Cards, Anna Hinds for Your Privacy