back to article Silly money: Before you chuck your chequebook away, triple-check that super-handy digital coin

On the first of July I walked up the main drag of Japan's eighth-century capital, Nara. As a mid-sized Japanese city, there are combini – convenience stores – every block or so. First among these is 7-Eleven, with over 20,000 outlets spread across its islands. In front of the first 7-Eleven I came across, a young employee …

  1. Pascal Monett Silver badge

    "The age of digital money has arrived"

    Um, sorry, no. Digital money has been around for quite a while already and was invented by bankers. Cash represents a laughable percentage of all money that is in circulation and a minuscule part of my monthly spend. My VISA is by far the greater part of my spending methods.

    The age of funny money has arrived, and it is funny right up to the point where the exchange that has yours folds in a puff of smoke, leaving you with nothing. It's funny to stuff it to The Man until you realize that when you try to purchase something, you're likely to pay more in fees than the value of what you bought. It's funny until you see the conversion value hit the floor when you bought it for $3000.

    Yeah, some people have made it big - invariably they got in early. And some people win the lottery. The lottery is more reliable.

    Bankers have no reason to be scared of this kerfluffle. There's a dozen cryptoshenanigans available now and no economy is going to collapse because of that. Bankers have other things to do, as in respect their charter and keep track of all the money.

    The day I will feel threatened by cryptostupidity is the day Goldman-Sachs puts out its own. But why would it ? It already has all the money.

    1. Anonymous Coward
      Anonymous Coward

      Re: "The age of digital money has arrived"

      We are all different people

      "Cash represents a laughable percentage of all money that is in circulation and a minuscule part of my monthly spend."

      I'm totally the opposite.

      Now that I'm retired, my day to day spending money is all cash. Far easier to control how much I spend. Not having folding money in my wallet is a good disincentive to not pull out my plastic cards.

      1. trolleybus
        Pint

        Re: "The age of digital money has arrived"

        "Not having folding money in my wallet is a good disincentive to not pull out my plastic cards."

        I find the exact opposite.How else can you make the beer come from the other side of the bar when the cash has gone? Oh have I misunderstood? There are a lot of negatives in your sentence for so early in the day.

        Yes, we are all different people. I find contactless easier to control than cash, because every little transaction appears in my bank account.

        1. MachDiamond Silver badge

          Re: "The age of digital money has arrived"

          "I find contactless easier to control than cash, because every little transaction appears in my bank account."

          That is until your bank account is empty either by your doing or somebody in China/South Africa/Indonesia. If you are out drinking on a Friday night, you can control how sick your are going to be if you limit the amount of cash in your pocket. If you use plastic and you've just been paid..........

      2. big_D Silver badge

        Re: "The age of digital money has arrived"

        For you and for me, perhaps, but look at the amount of debt most people have.

        They put most of their spending on credit cards and many just pay off the monthly minimum, until they get to the point where their little world collapses.

        A large part of the first world is virtually prosperous, but in reality that wealth is all 1s and 0s...

        1. LeahroyNake Bronze badge

          Re: "The age of digital money has arrived"

          I forgot to pay my CC off last month, that £7.99 for Netflix cost me £0.26 in charges. Set up a DD for £8 per month to cover it in the future.

          Sometimes digital payments are a royal PITA! I just wish they would let me go in to credit and pay me the 28 ish % back.

          Credit cards should be for either emergencies (stuck in a foreign country and need to get home) or paying companies that you may want your money back from should they possibly not deliver.

          1. swampdog

            Re: "The age of digital money has arrived"

            Why not just overpay your CC? The only company I've hassle me over it (CC in credit) is Virgin and it appears they'll shut up nagging once you make a single small purchase after the nag.

            Beware saving a card only for emergencies because it'll likely be a big payment and get declined. Obviously block all but one from being used online. <- That was the IT bit btw! :-)

            I'm semi-retired and got into the habit of paying my cards weekly. Dunno why I never did it before. It shouldn't make any difference splitting the monthly income into four but somehow it does. Didn't stop me splurging out on a 3D printer I can't currently use but I didn't go mad again until three weeks later. Even better, if you forget to pay one week no charges because there's been three other payments.

          2. big_D Silver badge

            Re: "The age of digital money has arrived"

            When I left the UK, I didn't use one of my credit cards for about 3 years, all that time it had a balance of +100UKP on it, but did I get interest on it? Did I heck!

          3. Cederic Bronze badge

            Re: "The age of digital money has arrived"

            Both of my credit cards have been set up to charge me a direct debit for the full owed amount each month.

            Zero charges. Just means I can't spend money that I don't have. I can cope with this.

            1. MachDiamond Silver badge

              Re: "The age of digital money has arrived"

              "Both of my credit cards have been set up to charge me a direct debit for the full owed amount each month."

              Always remember you set that up so if you have a big expense, those auto-pays don't hit and the bank charges you big bucks for 2 bounces each.

          4. Anonymous Coward
            Anonymous Coward

            Re: "The age of digital money has arrived"

            I put everything I can, about 50K per year through my credit card. Despite being into electronic payments I insist on getting a paper credit card bill sent each month. Soon after it arrives I check it roughly to ensure no fraudulent charges then put in an advance payment from my bank to arrive the day payment it due (or the Friday before if the payment is due at a weekend of BH). Finally I write PAID in big letters across the bill to remind me it has been done.

      3. Patrician

        Re: "The age of digital money has arrived"

        I'm the opposite again, if I have cash in my wallet it will be spent, on this and that, but I'll not have a clue on what by the time it has gone. On card I know exactly what I've spent and where and, as its not cash a disincentive to spend. Works for me.

        1. swampdog
          Joke

          Re: "The age of digital money has arrived"

          You're not married are you? I'm the handy ATM and I like an ATM I never get the change. Bring back £1 notes!!!

          1. Persona Bronze badge

            Re: "The age of digital money has arrived"

            I often look in my wallet and find all the notes gone. "Have I been mugged I think?" … no I've been married. Being mugged would be so much cheaper.

          2. Patrician

            Re: "The age of digital money has arrived"

            I was married and at that time it was pointless having a wallet, there was never anything in it.

    2. big_D Silver badge

      Re: "The age of digital money has arrived"

      The other thing is that everything seems to use Blockchain, yet that is uneconomical at scale. Just look at the Bitcoin blockchain, it is now, what? Over 230GB in size? And how much processing time and energy does it take to perform a transaction?

      And Bitcoin is still a rarity, in terms of the number of transactions. And Libra is supposed to support a maximum throughput per minute that Visa or Mastercard would laugh at.

      1. Dabooka Silver badge

        Re: "The age of digital money has arrived"

        I agree, reading that I'm fairly sure that for 'Libre' to function it would be used a digital currency rather than a payment method, as in in lieu of pounds and dollars.

        I'm guessing that would be transferred to your digital wallet to pay locally through whatever payment method is used. So another link in the chain, with a transaction / processing fee to boot.

        All seems very unnecessary to me.

        1. DCFusor Silver badge

          Re: "The age of digital money has arrived"

          Well, a not-so-side effect of putting out your own currency is you are your own central bank and can effectively print money till the plebes notice it's becoming worthless - and beyond - if you can enforce its use via taxes enforced by power that have to be paid in your currency, and of course worldwide, via kinetic military action.

          It's bad enough when governments do that, and now they are reacting to the competition in the world of fractional reserve theft.

      2. MachDiamond Silver badge

        Re: "The age of digital money has arrived"

        Processing Bitcoin transactions is usually measured in kWh and I can't remember what the exact number is, but I do remember that it's hefty.

    3. Jamesit

      Re: "The age of digital money has arrived"

      A good documentary about money is "Money as Debt"

      https://en.wikipedia.org/wiki/Money_as_Debt

      From the Wikipedia article:

      "The film was conceived by Paul Grignon in 2002 as an introduction to a 5-hour video commission for United Financial Consumers. He prefaced his video lecture with a re-telling of The Goldsmith's Tale in animation form titled Money as Debt. The Goldsmith's Tale is noted in the film as being "a brief and broadly allegorical history of banking" and should not be viewed as a complete or entirely accurate account of the history of banking. Expanded over a six-month period in 2006, it was Grignon's first full length animation project"

      It's defiantly worth watching.

      https://www.imdb.com/title/tt1828247/

      1. sabroni Silver badge

        Re: It's defiantly worth watching.

        Can I watch it without any defiance?

    4. Mage Silver badge
      Big Brother

      Re: "The age of digital money has arrived"

      IBAN (zero cost in Eurozone) and PayPal actually can work fine on phone. If you have a Credit Card you don't need a PayPal account to use Paypal.

      You can use a Credit Card on a Phone too.

      All the local shop needs is a suitable Website and WiFi.

      1. Alumoi

        Re: "The age of digital money has arrived"

        WiFi?????

        Banking over not-under-your-control WiFi?

        1. Tomato42 Silver badge

          Re: "The age of digital money has arrived"

          oh, you think that your home WiFi is secure?

          bless your heart!

    5. Anonymous Coward
      Anonymous Coward

      Re: "The age of digital money has arrived"

      Quote; "the day Goldman-Sachs puts out its own"

      David Solomon Says Goldman Sacks is researching creating a digital currency;

      https://www.cnbc.com/2019/06/28/david-solomon-says-goldman-sachs-is-researching-creating-a-digital-currency.html

      And within their actual web site; https://www.goldmansachs.com/insights/topics/blockchain.html

    6. MonkeyCee Silver badge

      Re: "The age of digital money has arrived"

      "And some people win the lottery. The lottery is more reliable."

      If you believe that, then I've got some lottery tickets for you :D

      While you can lose 100% of your bet when speculating, it's a matter of beating the crowds. So if you're a bit less greedy than the next fellow, you can make a buck or two. In general, there's no way to beat a lottery without either cheating it, or some complicity, such as buying every number. Even then, the majority of your tickets lose 100%.

      The comparison you're looking for is perhaps horse racing or poker.

      The best advice on how to make money on speculating is from a certain Nathan Rothschild, he of the Waterloo bond bluff: "I never buy at the bottom and I always sell too soon."

      1. Pascal Monett Silver badge

        Re: "there's no way to beat a lottery without either cheating it, or some complicity"

        Tell that to the ones who've won.

  2. Steve Davies 3 Silver badge
    Coat

    Avoid

    especially if it has anything to do with FaceBook.

    Mines the one with pockets full of change.

    1. big_D Silver badge

      Re: Avoid

      It wouldn't work in my house, all Facebook associated domains are blocked by my DNS server.

      As soon as a Libra user walks through the door, they are suddenly poorer than a church mouse.

    2. e^iπ+1=0

      Mines the one with pockets full of change.

      How hard can it be to mine pockets full of change?

      Easier than mining some crypto coin.

  3. getHandle

    ..the biggest of payments problems...

    I'm very happy to have my mobile and my money kept separate! Especially given the ease with which they can be nicked, explode or dropped down the toilet....

    1. Anonymous Coward
      Anonymous Coward

      Re: ..the biggest of payments problems...

      Money can be dropped down the toilet too, believe me I know.

      Fortunately the person I later spent it with didn't...

      1. PhilBuk

        Re: ..the biggest of payments problems...

        At least money still works after being dropped in the toilet.

        1. Doctor Syntax Silver badge

          Re: ..the biggest of payments problems...

          A big plus for polymer banknotes.

        2. Anonymous Coward
          Anonymous Coward

          Re: ..the biggest of payments problems...

          So do some phones.

          Though for other reasons I'd suggest not doing it.

    2. dajames Silver badge

      Re: ..the biggest of payments problems...

      I'm very happy to have my mobile and my money kept separate! Especially given the ease with which they can be nicked, explode or dropped down the toilet....

      I certainly wouldn't want all my money to be accessible through my phone, but I am looking at mechanisms by which I might use my phone for payment if it was all I had with me.

      I felt the need for that when I lost my wallet and had to cancel all my cards (the ones that were in it, anyway). The wallet was found and returned to me complete with cash and cards, but you can't un-cancel a credit card (though you can now apparently un-cancel some debit cards). Replacement cards were sent the same day -- to my home, but I was on holiday. I had to rely on the goodwill of SWMBO for a couple of weeks.

      Had I been travelling alone -- on business, perhaps -- I should have been properly stuffed!

  4. The Man Who Fell To Earth Silver badge
    WTF?

    Why prepay?

    One of the other issues of a so-called digital coin like 7Pay is that it's really just an escrow account where 7Pay is earning interest on the float. In other words, they are making the interest on your money that you could be earning if you paid by credit card or general escrow service like Pay Pal. For a low margin business like 7-Eleven, if 7Pay became popular that float revenue could be as large as their retail business profit.

    1. Doctor Syntax Silver badge

      Re: Why prepay?

      "making the interest on your money that you could be earning"

      Interest? I think I remember that.

    2. katrinab Silver badge

      Re: Why prepay?

      Interest rates in Japan have been zero for about 30 years now.

      1. MonkeyCee Silver badge

        Re: Why prepay?

        "Interest rates in Japan have been zero for about 30 years now."

        And negative for a couple of years.

        Not "effectively negative" where interest rates are lower than inflation, literally negative. You pay for the privilege of lending the government money.

  5. LDS Silver badge
    Devil

    A wonderful world...

    ... when you have to pay each service with its own craptocurrency, and there will be hundreds of them, and all of them will try to make you turn real money into theirs, while trying to block you to transfer money to other services. I can foresee a real balkanization of payments.

    1. Tomato42 Silver badge

      Re: A wonderful world...

      you mean big corporations would try to do the same thing with money they are already doing with streaming of copyrighted content?!

      no! that would never happen! /s

  6. Teiwaz Silver badge

    Money like cheap balloons...

    or Cheap walkmans, smartphones or [insert favourite device or toy that broke moments after taking ownership].

    I find doing all my transactions on my debit card easier, but I do feel guilty as I know, the more that do this, the sooner cash will be a thing of the past (there are some convenience advantages to cash - just as there were for cheques).

  7. Dabooka Silver badge

    Bullion's where it's at

    I was chatting with my pal over a beer at the weekend and we think we're going to start dabbling in sovereigns and bullion. Keeps it under the radar, and in years to come will always be able to sell for hard cash.

    Just got to make sure it's kept secure.

    1. jrd

      Re: Bullion's where it's at

      On the off-chance that you are unaware, if you're in the UK, gold sovereigns have the advantage that profits made on them are not liable to Capital Gains Tax (unlike bullion).

    2. Anonymous Coward
      Anonymous Coward

      Re: Bullion's where it's at

      Someone once told me that silver is an easier commodity to handle as it's far less regulated and taxed (the focus is indeed on gold) - the disadvantage of lower value density can also be seen as making it easier to divide.

      1. 1752

        Re: Bullion's where it's at

        Silver bullion in the UK has 25% tax on purchase (Gold does not). Adding this for any UK peeps, quick look US looks different.

      2. MachDiamond Silver badge

        Re: Bullion's where it's at

        Silver is good to have for day to day transactions since an ounce is handy amount. An ounce of gold, otoh, is a big pile of money so it's best for bulk storage with the expectation that there will be an operating financial system around that lets you convert when you need to.

      3. MonkeyCee Silver badge

        Re: Bullion's where it's at

        Investing in precious metals requires a bit of research into what the local rules are. Both gold and silver have been legal tender before for most countries, and rules often come from there.

        Hence there are often different tax rules for bullion (investment bars), coins and industrial bars. Industrial obviously has various grades not used in investments, and is usually taxed less. So industrial silver is often cheaper than investment silver, but you can get slapped with a tax bill in the future if it's an investment rather than for use.

        Gold is pretty much only used as a money substitute. And a bit for jewelry (which is often money substitute too) and a minuscule (~3% production) amount used in industry.

        The platinum group metals (platinum, palladium, rhodium) and silver are mainly used industrially (90+% of production). I found them to be a better "normal" investment than gold, as they aren't always under the same tax regime, you can sell them legally about as easily, and their demand is based on real world dynamics, rather than pure manipulation.

        Gold is massively over valued compared to the rarity and cost of extracting it. It has that "value" because it's traditional form of money, and it's still part of the money supply. It's as silly to use gold as it is to use crypto.

        Having said that, I've made plenty of money by mining both gold and crypto, so I'm glad that someone is buying it :D

    3. TimMaher Bronze badge
      Coat

      Re: Bullion's where it's at

      I’d be cautious about keeping it under the radar.

      Someone might pick the radar up and then nick it.

      Mines the one with a PSB album in the pocket.

  8. batfink Bronze badge

    This is all because the West is far behind

    It seems to me that this panic is all because FB etc can see the existing success of AliPay and WeChat Pay in China, with their QR-based systems. This is in and working and IIRC processes something like 1.5Bn transactions/month - and all with no transaction fees for the punters. By all reports, paying by phone in China is becoming a default, even in more isolated areas.

    If the Chinese providers can expand into the rest of the world, then that takes all those lovely transactions (and tie-in) away from the Western platforms and providers - not to mention the credit card companies.

    Those nice people in FB can see how much capture the Chinese operators have in their own markets, so obviously would love to have that kind of tie-in of their own customers/users. I doubt Google, MS et al will be far behind. And as one of the commentards pointed out: soon we'll also have Goldman Sachs and their ilk trying to muscle in as well.

    1. LDS Silver badge

      Re: This is all because the West is far behind

      Paying with a thin, battery-less small card is far more comfortable than using a phone IMHO. Especially since finding a small phone with a long-lasting battery became impossible. I also like to keep my cards, phone and some cash separate when I travel. Less risk I lose or be stolen everything at once.

      In China that worked because people didn't have credit/debit cards already - and anyway most financial services won't trust most people with delayed payments.

      We can discuss about the fees - anyway here there are no fees for the buyer (the few trying to apply them are almost totally disappeared), it's the seller that pays them - which is what I believe AliPay and WeChat Pay do anyway.

      1. TechnicalBen Silver badge

        Re: This is all because the West is far behind

        IIRC they can put some of the tech into phones. There are "multi card" cards for sale now, which can have cards added to them, with lcd and buttons for selecting which card, and also inputting a pin/fingerprint into the card before it's even gone near the contactless reader.

        However, barrier to entry and lowest denominator might make those exceptions rather than rules.

        1. LDS Silver badge

          Re: This is all because the West is far behind

          Right now if a card doesn't work you get a replacement for free. Good luck when everything is inside your phone, requires it to be powered and working, and may require you to buy a new phone just because they upped the required spec (just got a message about that from my bank...)

          Moreover if you're abroad it the phone requires an internet connection for the app to work it may become quite expensive if your contract doesn't cover rovers fees abroad, worldwide.

          It's the "all eggs in one basket" security risk

  9. tiggity Silver badge

    I like proper cash

    Quick, convenient, accepted by everyone.

    It works when phone lines are down, banks / visa etc. are throwing a wobbly.

    I know plenty of places that don't accept cards (e.g. one of my favourite pubs - proper pub, no meals (just snacks such as crisps, nuts, pickled egg, pork scratching or other available snack) and local greengrocer (average purchases not enough to make cards cost effective so cash is the only option) and lots of small places that do cards but set minimum amount typically at a tenner (else it kills their profits if you do small payments on cards as small shops pay far more per transaction than the Tescos etc. of the retail world who get less of a hit from tiny card purchases).

    Additional benefits include no tracking of your shopping (say no to store cards too folks).

    I do have a card - its main use is making cash withdrawals.

    1. EnviableOne Bronze badge

      Re: I like proper cash

      conversley, I know several pubs that dont take cash.

      The costs of cash handling and having change available are starting to become excessive and some smaller businesses have started to work on electronic cash only.

      G-Pay/Android-Pay, ApplePay and SamsungPay are leading the way with mobile payments, with challenger banks like monzo and Starling comming on in leaps and bounds. In several places Cash just isnt needed, and mostly causes more issues than its worth.

      Microsoft has had its own currency for ages, Microsoft Points are purchaseable in any currency and used for purchasing from their online platforms.

      1. iron Silver badge

        Re: I like proper cash

        I would laugh at them and walk out the door.

        1. JetSetJim Silver badge

          Re: I like proper cash

          And they might well pull a wry smile, say "tsk, another Luddite", and continue polishing the beer glasses with a grimy rag. I'm sure they are aware that they may well lose some business because of their decision, but they obviously think that the benefits to them outweigh that cost.

          1. Doctor Syntax Silver badge

            Re: I like proper cash

            Order drink, take swig and simultaneously offer cash. How does that work for the card only pub?

            1. d3vy Silver badge

              Re: I like proper cash

              "Order drink, take swig and simultaneously offer cash. How does that work for the card only pub?"

              Depends on the pub of course, but because card payments don't require the bar tender to count/really interact at all, Ive normally tapped my card and completed the payment before the drinks are poured.

      2. JetSetJim Silver badge
        Holmes

        Re: I like proper cash

        No idea why you got a downvote, here's a BEEB writeup of a cashless pub, the initial dabbling that some stores are taking in this arena, and their reasons for doing so.

        But as people say, it works for some, but not for others - similar, too, if a bar/shop went cash-only.

        Personally, I rarely carry cash:

        Groceries -> card

        Petrol -> card

        Parking -> mobile app (one of several), linked to a card (business or personal)

        The only time I ever need cash is when the inevitable cake-sale-at-school type event rolls around and the kids ask (on the morning of the sale) to have some cash to go to school with. Denied, usually, due to no warning and no ATMs on the way to school.

        1. Richard Jones 1
          WTF?

          Re: I like proper cash

          While I like the back up of cash for when the bank system communications network or the power fail, I do use plastic for many transactions including about the only time I have ever used a wave and pay method at all, which was in a hospital car park. Many local car parks still like shiny metal disks, so I keep a supply in my pocket.

          At the week end I tired to assist a disabled person pay a bill, but they are not set up for 2 factor authentication so the transaction failed. It is doubtful that they will be able to follow the 2FA set up due to their disabilities. This partially explains why I was attempting to assist them: - great news cheques saved the day and are still a payment option, so into the post went a cheque payment, the New Modern Wave perhaps.

          1. doublelayer Silver badge

            Re: I like proper cash

            Cash is great as a backup, but there are many advantages to using a different payment method. Of course, there are many disadvantages too. I'll list some of each.

            Card payment advantages:

            1. I can carry a lot more value, because I just put it on the one card.

            2. Payments can be faster, as I don't have to find the required notes or wait for change to be dispensed.

            3. If I am robbed, the card can be canceled, and charges can be reversed.

            4. I can have multiple cards with me for different expenses (corporate/personal, for example). I don't have to keep receipts or a log of where I spent money, because the card provider has that and can show me.

            5. I can use the same payment method everywhere. Yes, a few small places don't take all cards, but nearly everywhere takes the major ones. Cash doesn't work online.

            Card payment disadvantages:

            1. You have to deal with another company, with another password and another random number between 17 and 84 minutes before you get off hold.

            2. Someone else has purchase data on you. Depending on what they do with it, this can be worrying.

            3. It does theoretically make it easier to spend more. I can't say I've really experienced that, but I see the theory and it has value.

            4. The card providers can break and then things start breaking. Fortunately, the people who are trying to get payments from you tend not to blame you for this.

            These tradeoffs have settled in favor of card payments for me, at least most of the time.

            1. MachDiamond Silver badge

              Re: I like proper cash

              "4. The card providers can break and then things start breaking. Fortunately, the people who are trying to get payments from you tend not to blame you for this."

              Beg pardon. If you are using your card for a payment and your bank cancels that card or declines the transaction because you filled up with petrol and the exhorbitant "hold" hasn't cancelled, that other creditor is going to happily add a late fee to your account. They don't care that YOUR payment source has a problem.

        2. Anonymous Coward
          Anonymous Coward

          Re: I like proper cash

          Was a cash-only holdout until probably less than 10 years ago, before that if I wanted to order something online I would have to do a deal with a mate to purchase it on their credit card, which was obviously not a viable long term strategy.

          I have been dragged, kicking and screaming, into the century of the fruitbat, and now all my day to day transactions are on debit or credit card, bills paid online.

          But - I only do my banking on a PC - not phone, and one I control.. and I always carry cash as the most versatile of emergency tools,

          Anon.

        3. MachDiamond Silver badge

          Re: I like proper cash

          "The only time I ever need cash is when the inevitable cake-sale-at-school type event rolls around and the kids ask (on the morning of the sale) to have some cash to go to school with. Denied, usually, due to no warning and no ATMs on the way to school."

          I started down that road and hit a pothole. I was at an out of town conference and one morning at the coffee shop getting some java and a bun, my card was declined. I called the bank and they told me somebody in S. Africa tried to use my card number to buy a plane ticket. The bank caught the fraud and canceled the card. I wasn't on the hook, but I also didn't have any money to settle up with the hotel, buy petrol on the way home or eat for the weekend. "Due to security" the bank would not send a replacement card to my hotel or even let me make a withdrawal at a local branch where I could present a stack of ID and the cancelled card. My coworkers that were also at the conference clubbed together to loan me enough cash to get me through the conference and back home.

          I now make sure I have enough cash in pocket to buy a meal and a tank full of petrol. If I'm on a longer trip, I'll have cash to pay for pretty much everything or at least food and fuel. I could sleep in the car if pressed. There are too many links in the digital currency chain to trust it when the downside is being stranded in the middle of nowhere out of gas and hungry in a blizzard/heat wave.

          The other benefit is that I can regulate my discretionary spending better if I'm limited to the cash on me. I don't need to keep track of every purchase of small things to see where my money goes. I am happy enough with an "account" marked "misc".

          1. Anonymous Coward
            Anonymous Coward

            Re: I like proper cash

            When I had to travel a lot for business (I'm now retired) I had an extra credit card (in addition to my personal and business ones) that I rarely used (just small purchases to keep it live, and never online). This was my backup should either of my main cards get blocked. I only needed it once, when a capital purchase took my business card to its limit and the payment DD hadn't gone through - I paid the hotel and local fares (ferry back to the mainland for flight home) with it.

            Nowadays, for holiday travel, I use a pre-loaded Euro card (though that spare CC is still with me - just-in-case).

      3. Aitor 1 Silver badge

        Re: I like proper cash

        You HAVE to accept cash in England, and in Scotland, you have to accept certain coins.

        1. Blane Bramble

          Re: I like proper cash

          You HAVE to accept cash in England, and in Scotland, you have to accept certain coins.

          Not true. You have to accept legal tender for a debt, and cash is legal tender.

          You don't have to accept cash for a sale.

    2. DiViDeD Silver badge

      Re: I like proper cash

      "Quick, convenient, accepted by everyone.

      Not any more, I'm afraid. There are plenty of even small retail outlets round my way who are 'EFTPOS Only'. Although I still like to use my local chip shop who have been displaying a "Cash Only - Sorry, our EFTPOS is down" sign on the counter permanently for the past 4 years.

  10. mix

    Paradigm shift

    It's not that long ago that we wrote cheques by hand. It's not that long ago that we were having our VISA cards pushed through a machine to create an invoice to sign. It's not that long ago that we ran them through a machine to create a digital transaction. It's not that long ago that we press them against something for small amounts of money to create the transaction. It's not that long ago that we could add these cards to our smartphones and bop that against somerthing to make the same payment.

    The Cryptocurrency change is happening, it reminds me of the beginnging of the internet where simple creation of digital information and transactions created a shitstorm of terrible websites and services. A few rise to the top and create something that is so intuitive and convenient and obvious that we all start using it and wonder how we lived without it. Crypto will make currency decentralised, as the internet made information and services decentralised. Some of these will become the De Facto way to store wealth and make international payments. That's why the centralised banks and governments are starting to worry. Think about why you trust a bank with your money. Think about why banks were invented. Think about why money was invented. The cream will rise and it won't be this generation that accepts it. It will be the next generation, because for them, it will be the norm.

    It's more expensive to take gold into space than it is to send bitcoin.

    1. Charlie Clark Silver badge
      WTF?

      Re: Paradigm shift

      Crypto will make currency decentralised, as the internet made information and services decentralised.

      Currently the internet is becoming more and more centralised…, which is why Facebook wants to get in on the game. The various heists of the various cryptocurrency exchanges should also serve as a warning. But obviously not to everyone!

    2. Anonymous Coward
      Anonymous Coward

      Re: Paradigm shift

      This......crypto is the future, it will be faster, more economical and it's biggest feature, borderless.

      It's not going away, it's technology that's in it's early years of mass adoption. Think if Amazon got on board, they would have the whole lifecycle from purchase to delivery to your door, no outside factors. How much business would Visa, PP loose through this?

      Amazonn are not going to ignore this, same way FB is slowly starting to get involved, it will happen.

      It's been invented and has proved it can work it just needs tweeking, once that is done......it's not going to go away that for sure.

      What coin it will be? Who knows

      1. I ain't Spartacus Gold badge

        Re: Paradigm shift

        This......crypto is the future, it will be faster, more economical and it's biggest feature, borderless.

        Question: How can you have true borderless money?

        Answer: You can't.

        Not until we have a single global government and financial system, anyway.

        If a system has no jurisdiction, like say Bitcoin, then it has no regulation. Boo to governments - say the proponents. Until they lose all their money and seek compensation through the police and the courts - but can't get it.

        One of the main causes of the Great Depression in the 1930s was because people couldn't trust banks. So they withdrew their money in panic, causing the very destruction they were worried about. Which meant nobody could borrow to invest, which destroyed future economic growth. That's why governments brought in bank deposit insurance schemes - and regulated banks more heavily.

        With our economies far more bank-dependent in 2007, one reason we avoided a great depression was that bank deposits were now guaranteed and Central Banks loaned them as much money as required to keep them going.

        The reason the Eurozone went back into recession in about 2010 - and had a worse recession than almost anywhere else (and that Greece suffered worse than any country in the 30s Great Depression) was that the Eurozone failed to learn the lessons of the 30s. They failed to guarantee their banks and so suffered a crisis of confidence and investment.

        If your future currency is totally self-regulated, nobody will trust it in bad times, unless forced to. For example if they're criminals, and have no better choices.

        The other major bar to borderless money is currency risk. If I'm paid in sterling, then I don't want to be using another currency for my outgoings, as currency fluctuations can be crippling. I've lived this, so I know from personal experience. I was living in Brussels, when the Euro started to recover from the dot.com bust and early jitters about its survival in 2001. So it rose by around 15% in a couple of months - and therefore my salary suddently dropped by the same - as I was still paid in the UK. I'd planned for it - but there was a still an appreciable effect on my standard of living - and at very short notice too. Facebook want to mitigate this by making Libra a "stablecoin" - but that only works against a basket of currencies - and creates some quite serious stability problems of its own that they'll have to wrestle with.

      2. DiViDeD Silver badge

        Re: Paradigm shift

        It's been invented and has proved it can work it just needs tweeking

        I tweeked mine once. Oh, hold on, I think it might have been twice.

    3. Stork Silver badge

      Re: Paradigm shift

      I have posted it before, but I still think it is worth reading a take on Bitcoin in particular and cryptocurrencies in general by an actual economist: https://www.johnkay.com/2018/03/05/bitcoin-boon-bubble/

      1. doublelayer Silver badge

        Re: Paradigm shift

        Cryptocurrency as a concept is interesting. There are a number of real benefits we could get from a properly implemented cryptocurrency. Some immunity to government action (E.G. Venezuela's overprinting), a fast method of exchanging money at a distance, etc. The operative word there being "could". Current attempts at cryptocurrency have not only failed to meet those goals, they have been built without proper consideration of those goals. They have been built in such a way that transactions are extremely expensive, so that exponential increases in hardware are required to maintain the same transaction rate, either with a completely open blockchain so people can deanonymize payments at their leisure or a computationally intensive anonymity system. Their developers haven't been all that interested in having their cryptocurrencies be used as currencies, but instead have been selling them to speculators, meaning nobody sane can actually hold the currency with the expectation of the value being sort of similar when they come back.

        Cryptocurrency will definitely become a massive cultural and technological change that will affect the way we all do business, except for that small probability that it keeps going like it has so far. In that case, it will be somewhat random--some people will be extremely enthusiastic, others will be intensely opposed, and almost everyone else won't care because they won't be using it.

    4. katrinab Silver badge

      Re: Paradigm shift

      I will bear that in mind should I ever need to send money into Space.

      Not every new technology becomes successful. Cryptocurrencies aren’t that new, and blockchains are almost as old as I am. I’m not sure what advantages they have over bank transfers which take seconds and cost nothing, or my contactless Mastercard, unless you are an anarcho-capitalist who hates governments and banks.

    5. DiViDeD Silver badge

      Re: The cream will rise

      Just be aware that, as any sewerage worker will tell you, it's not just cream that rises to the top.

    6. dajames Silver badge

      Re: Paradigm shift

      Crypto will make currency decentralised ...

      You say that like it's a good thing.

  11. iron Silver badge
    Big Brother

    "multiple, global digital currencies available for payments, working seamlessly within our smartphones"

    Sounds dreadful. How is requiring my phone to be present, working and charged an improvement over unpowered cards & cash? And, how am I going to buy milk, bread and other daily sundries when most of the local shops near me don't take cards and those that do have a minimum spend of £10?

    "Digital currencies, built on blockchains, will leave a transaction record of everything"

    The more you data fetishists tighten your grip, the more people like me will slip through your fingers.

    1. Spanners Silver badge
      Alien

      @iron

      The more you data fetishists tighten your grip, the more people like me will slip through your fingers.

      And how long will it be before every banknote does RFID?

      And how long after that before they will track individual coins?

      I am not too worried by the fact that governments, police and spooks want to track us* but I do object strongly that commercial organisations, banks, shops and megacorporations do.

      *I didn't say I liked it though.

      1. Charlie Clark Silver badge

        Re: @iron

        Governments and central banks want to get rid of cash as quickly as possible so that financial repression is more effective.

        1. DCFusor Silver badge

          Re: @iron

          When they manage to get rid of cash, they can make rates negative - instead of earning nearly nothing on your savings, they can effectively dock you instead. One really wants to avoid becoming trapped in such a system. NIRP has been seriously discussed by those who'd do it if they could.

          1. aks Bronze badge

            Re: @iron

            Interest rates are already strongly negative, if you take account of the government policy of having a target rate of inflation.

      2. Loyal Commenter Silver badge

        Re: @iron

        And how long will it be before every banknote does RFID?

        And how long before a whole bunch of those notes "accidentally" "fall into" a microwave oven?

        1. e^iπ+1=0

          "fall into" a microwave

          I can just see future legislation forcing that kind of damaged notes being unacceptable as legal tender.

          1. Anonymous Coward
            Anonymous Coward

            Re: "fall into" a microwave

            They will just skip it. By the time it's easy to do rfid coins, it will be in someones fingertip or their facebook eyeglasses instead.

            1. MachDiamond Silver badge

              Re: "fall into" a microwave

              The screaming would be very loud if a non-working tracking device, er, security measure not functioning invalidated a bank not.

              As far as RFID embedded in coins, they might have to be non-conductive composite coins to get them to work and the cost to process them would be mighty. The cost to track would be even more stupendous. The beauty of coins is they work for decades, can be easily counted by machine and aren't worth the bother to counterfeit. Low denomination notes are also too expensive to replicate so forgers don't bother with them. Twenties are a much bigger target since they are ubiquitous and worth enough for the risk. Tens are a slight possibility. Fivers? Nope. Anything larger than a twenty tends to get a closer squint when passed over and it's worth the bother of feeding it through a scanner.

  12. Pen-y-gors Silver badge

    Developing world?

    particularly in the developing world, where bank accounts are rare but smartphones plentiful.

    I was recently talked into doing a bit of pro bono work to help someone in Tanzania set up a website to sell teaching materials. The interesting thing of course is that a lot of people there don't actually have smartphones (too pricey) but they do have feature-phones. And their way of transferring money electronically (in the absence of bank accounts) is to send credit between phones. I think the main system used is called Mpesa (M for mobile, pesa is Swahili for money), but there are others. That launched back in 2007. Nice, simple way to pay a bill, with real currencies. Strange it hasn't caught on in Europe/USA

    1. I ain't Spartacus Gold badge

      Re: Developing world?

      There's no need for it in countries with developed banking industries. But it can be amazingly liberating in developing countries.

      For example I was reading about minibus drivers in Nairobi. The police were hitting them for bribes every day for fictitious traffic offenses. The same happened regularly to all drivers, but these guys had loads of paying passengers, so were guaranteed to have a cash.

      So a bunch got together and started only taking payments by M-Pesa. Which meant they could tell the police they had no cash - but were happy to pay the fine by traceable electronic means. Suddenly those fines disappeared, and they were able to lower their fares and not get robbed by the police on a daily basis.

    2. thenitz

      Re: Developing world?

      Vodafone did try to bring MPesa to Eastern Europe a few years ago, they launched the service and made a big advertising campaign. It failed to get any meaningful traction, since most people already had smartphones, bank accounts and cards. They killed it eventually.

      Nowadays I see that services like Revolut, where you can transfer money to someone in your address book without knowing the IBAN, are getting more popular.

  13. Stork Silver badge

    I don't get the disconnect between money and mobiles - AFAIK most European countries have various apps that do that, sometimes linked to the domestic electronic payment system. However, they do not seem to travel.

    I do not have any personal experience as I trust cards and cash more than anything on a phone.

    1. katrinab Silver badge

      Revolut can do both BACS and SEPA, which is what use. They also do ACH and various other systems which I haven’t tried.

      Transferwise is another very similar option.

  14. Palpy

    In most countries it will be a long time --

    -- before wave-n-pay phonecoin replaces everything else.

    I mean, if I so choose, I can still pay for stuff the same way Samuel Johnson did, with little bits of officially-minted metal. Or with paper. Or with a different kind of paper, which I have to write on first and sign. Or with a debit card, or a credit card. And some places I could wave-n-pay.

    The point is, though, all these ways coexist now because people have different ideas about the symbol-system we call money. And that variety of ideas means that a canny capitalist organization will keep on taking different forms of payment in order to maximize opportunities to sell stuff.

    Backwards compatibility will be very, very slow to disappear. And that's assuming the global financial system continues working as we expect it to. Otherwise we'll be back to bartering animal hides for barley.

  15. ma1010 Silver badge

    Why different currency units?

    The point I see many missing in this sort of debate is that the payment medium doesn't necessarily dictate the currency used. I can purchase stuff digitally with my credit card, or I can use Paypal which is linked to my credit card. Or I could pay for something with cash or check (cheque). All my expenditures, since I'm in the USA, are in US dollars.

    I don't see a lot of difference how you pay as long as you're paying something we can all agree is actual "money," like dollars, pounds sterling or euros. What possible need is there for this "fake money" crytocurrency? What does it do for people (other than crooks like ransomware thieves) that regular money doesn't manage to do? Why does this bogus "currency' even exist? What purpose does it serve, what benefit does it convey that "real" money does not?

    1. doublelayer Silver badge

      Re: Why different currency units?

      One theoretical benefit is that it isn't controlled by the local government. If it was done right, for example, people living in countries who have destroyed their own monetary systems would be able. to use it to escape that situation. Consider Venezuela, for example. The government has turned the local currency, the Bolivar, into worthless paper. Many of the people still trapped in Venezuela would prefer to use the U.S. dollar, and some do, but it's harder to do that because there aren't enough of them in the country, pushing the exchange rate even lower. Also, the government is still saying that the Bolivar has value (they say one is worth about $0.005, while the real value is $0.000062)*. The government is also annoyed at the United States and really doesn't want to be seen as having destroyed the currency, so they have forbidden the use of dollars. If there was a cryptocurrency capable of stepping in here, the people could use that to store value and transfer it. They wouldn't need to import paper to do it, and it would be harder to track. Of course, current attempts are completely worthless for this, as they don't hold value and can't be transferred without losing a lot of value and requiring quite a bit of local processing power to accomplish.

      *The exchange rates for the Bolivar are stated in U.S. dollars because that is the primary external currency in use in unofficial transactions.

  16. Stevie Silver badge

    Bah!

    Suffered a severe pull in my abdominal muscles laughing when I read "seamlessly".

  17. c1ue

    Very poorly conceived article.

    The author fails to distinguish between payments systems and digital currencies.

    They can be combined, but are 2 very different affairs.

    Payment systems have a niche: better convenience and/or lower cost vs. credit cards. It isn't at all clear to me that it is all that large; if Discover and Amex have to bite and claw to survive, how do smaller organizations manage?

    Digital currencies, on the other hand, have no future. Not because of the technology, but because the existence of any international digital currency, in any significant scale, destroys sovereign governments' ability to tax and to print money (taxation through devaluation).

    That isn't going to ever happen.

    3rd world countries with unstable currencies use a lot of USD or Euro, but that's cash which is really tough to stop.

    A digital currency, on the other hand, isn't. Outlawing it makes the telcos, the retail stores, the banks - the entire institutional side of the financial ecosystem - against the digital currency.

    The primary reason it hasn't happened yet in the US and Europe is two-fold:

    1) the amount of value in the digital currency ecosystem (cryptocurrency et al) is so small as to be laughable, compared to the overall financial ecosystem and

    2) The US and EU were beneficiaries in illegal capital flight from East Asia, where hot money flows are heavily regulated.

    1. Stork Silver badge

      Let me guess: you are not in Europe?

      Most continental Europeans (AFAIK) use debit cards linked to a national payment system and their current account; In Denmark it is Dankort and in Portugal Multibanco.

      The latter is real time; I can generally see on my bank statement which order I went to the shops. You can also pay your electricity and tax at a cash machine if you don't do e-banking. For 10 years or so shops have not been required to accept cheques - we don't have any for 8 years or so.

      1. c1ue

        How is what you describe (for Europe) different than the existing debit payment system?

        1. Stork Silver badge

          They _are_ existing debit payment systems. But they are (at least in DK and PT) much more widely accepted than credit card payments, are run by the banks with access for all banks, and you generally get a card with your current account.

          Struggling is not a word that comes to mind.

    2. katrinab Silver badge

      Kenya are the world leaders in mobile payments with M-Pesa. If you look at the historical exchange rates for the Kenyan Shilling, it seems to be pretty stable. China’s WeChat payment system is the largest in terms of transaction volume, also based on their local currency.

      1. c1ue

        Yes, definitely a lot of interesting mobile based payments in Africa. I wonder what ML and anti fraud issues they experience.

  18. the Jim bloke Silver badge
    FAIL

    Prior art on the Libra brand

    not sure what its like in Zuckerbergland, but I hear 'Libra'

    ..and I think 'feminine hygiene products'

    followed by astrology (well thats a guarantee of credibility, right there) and the quote from SWMBO "I'm a Libran... No decision is final, up to and even after implementation.."

  19. Blackjack

    And they called me paranoid...

    For never allowing online services like Google have my cell phone number, and because anything I buy online I pay in cash only.

    I don't even use online banking and every time someone at the bank I use asks, I just mention the latest hack that happened.

  20. Barry Rueger

    But! Integration!

    I can hardly wait for the day when every one of the dozen sites that I have to subscribe to just to watch movies or TV also insist that they be paid with their own bespoke e-currency. Wanna bet that Apple is first in line?

    1. NetBlackOps

      Re: But! Integration!

      Or Amazon but I'd put money on Apple first.

  21. Anonymous Coward
    Anonymous Coward

    Beware of coin

    I have been involved in then setup of a crypto exchange, and as part of that you get to meet lots of other people in that sphere.

    My background is institutional finance and compliance, and let me tell you, it will take a decade or more before any of them are even remotely ready for interfacing with the real world. They're all busy building their own bubble, and reality only intrudes when they have to interface with the real world and do awkward things such as paying bills and execute KYC and AML on incoming payments.

    Operators of these outfits seem to come in two guises: those that made money with crypto mining (and lost buckets when the market collapsed) and thus think that the world just throws money at them without having to develop any real business competency, and those who are good at making investors think it's the Next Big Thing and they better get in quick (those would be the ones actually justified in thinking that the world just throws money at them).

    Both variants appear to share a particularly aggressive aversion to sane operations, security and compliance. The most interesting example was an exchange who brought in a new personnel manager who proceeded to replace well qualified people in compliance and operations with, well, idiots from the gaming world who would not last two seconds in the reviews they needed to attract the Big Money, yet all of them think they will be a gazillionaire in a few months.

    There is no idea of process or how to even GET to a framework with policies and processes, there is a nigh hatred of traditional finance because it's "dumb" and "they are the new world", there are no provisions in their designs for monitoring, audit and security (cold storage is only an answer until someone walks off with it - not uncommon) and there is not even the interest in changing any of it.

    Trust me, you should not trust most of those exchanges with an old sandwich, let alone with your money.

    As for Libra, if it is tied to a fiat currency then it's just a currency with a different name - basically IOU vouchers, which is by some degree of irony how banknotes started in the first place. Ah, the sheer innovation of it all..

  22. BeerTokens

    Cashless camping

    We're currently pitched up on a campsite in France where everything is cashless either using their own pre pay system which is a small card attached to your wristband or normal cards. Which is better than trying to stash cash in your budgie smugglers.

    1. Anonymous Coward
      Anonymous Coward

      Re: Cashless camping

      Also, the localities may not want to handle money which has been in storage facilities close to certain body parts. There's nothing so dirty as cash..

  23. MachDiamond Silver badge

    No cash option?

    From time to time there are stories where a bank system goes down and entire chains of stores are hit with no way to process digital payments. Tesco got clobbered once by not being able to take card payments for about a day which cost them loads of money. I seem to recall they also had a problem once with their tills being online and a server error left them with no way to ring up purchases.

    A pub on a Friday night would hate for their connection to go rotten and not be set up to take cash. If you are a business, your goal is to be able to take customers money any way that is reasonable to manage. If the profit on a sale is less than the transaction fee, it's right and proper to post a minimum to use something other than cash. Unless all the pubs in the area stop accepting cash, yours will be the one with the most available seats on a weekend.

    Way back when I worked at a bar, you could use a card, but you had to buy in for at least $20 and received tokens (non-refundable) to use for purchases. This was before tills were all wired in and three bartenders and all of the waitresses (yes, they were all girls at the time) had to use just one CC reader. It took too much time to take plastic for each transaction. The bartenders could pour 3x as many drinks by not having to turn around and fiddle with the machine each time. Even if their cash count was off a bit at the end of the night, the business was far better off for not performing a card transaction for each order. The place had a bounty for a perfect drawer. If your count was spot on, you got at least a tenner or much more depending on your total sales for the shift.

    Cash works in many places. I'm still waiting on EV chargers to be available with cash if they are sited at a forecourt or adjacent to a business. It's a backup for when (not if) the network is down and it's good for the local business as it makes you go inside where you may purchase stuff with big margins like a fizzy drink or crisps.

  24. James Anderson Silver badge

    Surprised

    .. That 7up should be so finacially nieve.

    In Thailand that are basically a finacially services company. Every branch has an ATM, it's the easiest place to pay your various electricity, water and phone bills. They accept all credit cards plus Apple Pay, and a couple Thailand only Android pay services.

  25. chivo243 Silver badge
    Trollface

    El Reg quoting Cyndi Lauper

    money changes everything! especially hands!

  26. midcapwarrior

    then spend big at 7-Eleven

    "it didn't take a criminal mastermind to divert accounts, empty their contents, then spend big at 7-Eleven."

    7-11 must be different in Japan then the US.

    Other than a 6 pack it's hard to find anything that costs more than 10.

    You'd need to empty the store to spend more than 1000.

  27. AnoniMouse

    Currency must be based on TRUST - Facebook???

    The prospect of Facebook holding a record of many / most / all of my financial transactions and selling that data to whatever buyer is prepared to pay them for it is more than enought to put me off this particular initiative.

    And blockchain technology, although it has been "in development", and even limited real use for years, has yet to prove it is needed for, and capable of supporting electronic transactions on a global scale (and the Bitcoin manifestation of it is an environmental disaster).

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