As we know, cash is tangible. But one of the benefits of its tangibility is that it also minimises risks. You can hold it in your hands, count how much you have, and lock it away in case of emergency if you needed to. While cashless societies are being touted as an ideal inevitability, one of the many issues with the potential loss of payment choice is the serious concern over the security and stability of digital payment systems.
So in a cashless world, what scenarios can we find ourselves in as individuals that, without cash, could threaten our everyday lives? And how does cash currently offer a safety net, minimising risk, for ourselves, businesses and governments?
In this week’s edition of Cash Is…, we outline 6 scenarios where digital payment systems fail us, or how systems can be breached, allowing cybercriminals to steal money from individuals, businesses, and even governments.
Threats, fraud and data breaches: a world without cash
1. Power outage
Mobile banking and apps are becoming part of our everyday lives, joining credit and debit cards in the suite of cashless payment products. But what happens when we cannot access the internet or suffer a power outage?
In Sweden, when their popular mobile payment app Swish crashed for four hours during a popular football event, fans were left infuriated with no way to purchase food, drinks, or memorabilia at the cashless event whilst the organisers suffered substantial losses.
2. Stolen cards and the Visa PIN bypass
Stolen cards, thanks to contactless, offer criminals a new way of stealing your money. While you may think they can only steal small amounts at a time, you’ll be shocked to read that PIN bypassing at cashier tills can allow criminals to steal way above and beyond contactless limits.
A recent study from researchers in Zurich, Switzerland have demonstrated how Visa PINs can be bypassed using just your stolen card, two phones and a payment point.
3. Financial fraud
It’s a common fraud that can vary from a handful of contactless purchases to hundreds and even thousands of dollars or euros lost. However, financial fraud can be carried out online by either bypassing security factors or accessing your online banking accounts through phishing and malware. The threat of online financial fraud is so severe, that in 2019 alone, it was estimated that $16.9 billion was lost to digital identity fraud in the UK alone.
The threat of cybercrime is an ongoing concern for cashless payment providers as, despite advancement in security innovations, criminals are finding new ways to get into your accounts to steal your money and your data.
4. Business fraud
It’s been revealed by CNBC that small US companies are, on average, are hacked for $200,000 a year. With only 14% of small businesses prepared to deal with these attacks, many small businesses end up out of business. And it’s not just in the US.
Accenture, in their latest Cost of Cybercrime Study, forecast that the cost of cybercrime for industries globally will reach the total value of “US$5.2 trillion over the next five years.” Without a safety net of cash, there will be no accessible stores of money for businesses to help them get back on track if a hacker completely empties their accounts.
5. Data breach
Adobe, Marriott, Carnival cruises, and even Twitter, have fallen prey to hackers and cybercriminals in recent months. While this may not sound like an issue for you, hackers that steal data from organisations will steal your personal information. This data could lead to criminals targeting you without you even realising. With all the personal information that they could possibly need, they can easily access your online and mobile accounts, or even use your payment information, without you suspecting a thing.
Which? have announced that “46% of people whose data was stolen by hackers following a breach at a large company went on to experience fraud.” With this in mind, they advise consumers who are victims of organisation data breaches, it’s important to ensure you’re accounts are not being targeted:
"You may want to keep a close eye on your bank accounts and other online accounts over the next few months, particularly if you think the breach in-volved any financial details or details that a scammer could use to commit identity fraud."
6. National threat
Countless scenarios consider the risk of a terrorist attack on a country’s financial infrastructure. If that were to happen, it would lead to a complete breakdown of all financial services. Without cash, the country in question would no longer be able to function; with cash, the economy can be kept going.
Cash as a safety net
While there are security measures in place to avoid power outages and protect financial institutions and our money from hackers, ultimately, we can’t always rely on technology and criminals will always find new ways of hacking accounts. Holding cash minimises the risk of power outages, becoming a victim of cybercrime, or simply offer emergency funds when you need it. While payment choice gives us all the option of how we spend and store our money, even the most digital-reliant individuals could do with having a few bills to hand, just in case.
In a cashless society, however, we’ll all have to deal with the consequences of whatever scenario is thrown our way as best we can and hope that we can carry on our daily lives without our risk-minimising safety net of cash.