In today’s day and age, our every digital move can be tracked. While the preference for digital transactions has increased, we risk losing our privacy once our data is captured. And in a cashless society, a lack of cash will leave those who need anonymity trapped in potentially dangerous situations.
In this week’s Cash Is…, we explore how cash protects our rights to privacy.
Digital Payments, Data, and Cybercrime
The costly threat of cybercrime and financial fraud is increasing. With this upward trajectory of risk, hackers have increased their profit-earning potential by stealing our data as well as our money by using new and innovative criminal schemes.
Worse still, across individuals and organisations, it’s expected that the cost of cybercrime will increase to $6 trillion by 2021. Considering 68% of business leaders “feel their cybersecurity risks are increasing”, threats to our privacy are likely increasing too.
In a cashless society, these threats are magnified, as the Financial Times’ chief economics commentator Martin Wolf illustrates in his insightful video, titled ‘Cybercrime’s Threat in a Cashless World’, which was published in 2017.
Data mining: what's the cost?
Concerns of data mining hit the headlines in 2019 thanks to the Cambridge Analytica scandal. Put simply, “data is obtained whenever a purchase is made.” A common practice amongst marketers, data mining is a process in which companies use your data, as well as many others, to establish patterns of behaviour to better sell to you. But how do they collect your data?
When you input your data, organisations store “all account and payment information” whilst data mining tools on e-payment systems can enable data collection through “web server log files, web server plug-ins (instrumentation), TCP/IP packet sniffing, application server instrumentation are the primary means of collecting data.”
While VPNs have been commonly used to protect privacy, ultimately, you still have to pay for these services with digital payment methods. In the data landscape, cash is the most private form of payment.
Privately stored cash offers a lifeline
The privacy cash offers can vary in importance from person to person, but to a domestic abuse victim, it can be a lifeline. Following the announcement of lockdown measures around the world, both ABC Australia and UK-based media outlet Which? reported increased concerns regarding financial abuse, “one of the most common forms of domestic violence.”
"Perpetrators controlling the family finances can make it difficult for victims to leave and seek refuge by limiting access to accounts, credit and debit cards, or only providing a weekly cash amount for shopping and expenses."
For domestic abuse victims, cash can be stored privately and secretly, to be used later as part of an escape plan. As Which? explain, victims “choose to pay cash to prevent their location being detected through ATM details on online banking pages/postal statements. Using cash can help women stay undetected – and safe.”
Cash is the only payment method that offers complete privacy and protects us from data and identity theft. From looking after our hard-earned cash to ensuring those who need it continue to have access to it, cash and its promise of protection should stay in the payments landscape.
The ‘Cash Is…’ series offers insights as to why cash matters. For more reasons as to why Cash Matters, click here