Why cash is priceless

We have recurring incidents at work were we have to ‘hot’ a Membercard (this is a plastic card similar to a bank card that has a PIN that you use to access funds at an ATM or use on the Interac network to buy something). To ‘hot’ a card means to take away the card’s ability to transact any business. It won’t work anymore.
There are a number of reasons why a financial institution (FI) would do this. One is that there is reason to believe the card has been compromised, which means someone other than yourself has access to your account by means of a fake card. Given that this happens, the most secure means of transacting business is cash. Cash. $$$.
Simply put, withdraw your money at the FI from your favourite teller and pay for everything in cash. Simple, cheap, anonymous and secure. But for most, not convenient. Remember every-time you use your card an electronic record is created. That means there is a cost to do this either for you and/or the merchant. It also means that what you have done is not ‘anonymous’.
Using the plastic has a price. Using cash keeps everything you want in your domain. With cash your privacy remains priceless.


Author: tinfoiling


3 thoughts on “Why cash is priceless

  1. I’m very surprised to hear someone from a financial institution say that cash is cheap and secure. Anonymous, sure… but cheap and secure…?

    I was under the impression that businesses and FI’s pay a lot of money for handling cash and the security involved with substantial amounts of cash. In my early twenties I had a job at DSB (the Danish railways) entering cargo manifests into a computer system. Every week we had the local banks sending hundreds of kg’s of coins back to the National Bank in Copenhagen. In the end, the consumer pays for those transaction costs.

    And I’d rather have my VISA card stolen (and go through the hassles of dealing with the bank to get my money back) than I’d have a couple of hundred dollars of cash stolen from me, because that money will never come back to me. For the thief, it will be simple, anonymous and secure to use the cash he has stolen from me, it will never be tracked back to him. There will be no alert shop employee questioning his right to use my cash because he fails some signature or likeness test.

  2. Jan,

    Great points and I wanted to quickly bring a few things to light.

    In the last year the banking systems for all of Canada have lost over $62 million in fraud with just debit cards. I know our small institution last year lost more in fraud than in overdrafts, which is a first. The dollar amount spent on implementing systems to keep ahead of the crooks is getting to be very costly and identity theft is a key element. It seems that even if you have an incident documented there is just too many for the police to handle. There is a whole new criminal element with cards at this point and the industry is pointing to ‘chip cards’ as the solution. I have some reservations on that.

    Coin is coin is coin and yes that is the most expensive element of cash to handle. It probably works to about 9% of the cash value of coin to manage this. With cash it is a little different. There are cash machines that now take the deposit and issue the withdrawal in the one unit. We installed one of these a few years ago for security and it is an amazing machine. We can save about 20% of our float costs as well as an good number of hours not having to implement so many controls. That has taken a huge cost out of handling cash for us. I do agree with you about the Visa card stolen than having the cash stolen. Under BC legislation any illegal activity on a plastic card can only have the customer liable for a maximum of $50. Nothing more.

    My point on cheap and secure was a focus on one’s identity. There are huge costs and I think they will be coming with the chip card and its usage. Cash will be cheaper and the use of it will secure your identity. There are mountains of information produced when people use plastic. It is a new science to build up a snapshot of the individual based on their spending habits. Believe me it gets scary just to know this stuff about someone. Privacy Legislation stops anyone from using it which is a good thing.

    Thanks for your comment. I am hoping to get to one of the Blog meetups and we can dialogue further on this.

  3. I think we agree on everything. From my tech support days I know that debit card machines and services also cost money for merchants.

    $62 million is only a couple of dollars per Canadian, though. I think that’s pretty darn good.

    There’s a Vancouver blogger meetup already tonight. 7PM at “The Whip” on 6th and Main.


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