privacy, identity, and the perils of the cashless society


Domagoj Sajter, PhD


Assistant Professor, Faculty of Economics in Osijek, J.J. Strossmayer University in Osijek, Croatia


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Cashless society, in which paper money and coins are replaced with virtual money, embodied in RFID, NFC and other electronic chips, or located in the ‘cloud’, is fiction no more; it is nearby, and in some countries on the verge of full manifestation. Cashless society is marketed and promoted intensely by the parties interested in its emergence, most often disregarding (deliberately, or inadvertently – whichever is the case) its negative effects on the society as a whole, and overstating the positives. This paper aims to examine the phenomenon of the ‘cashless society’ from the perspective of diminishing civil liberties, by means of identity exposure and evaporation of privacy in the electronic payment processes.

It is argued that anonymity in the ‘classic’ payment processes, carried through paper cash and metal coins, is vital to certain civil rights and liberties, and that the vast possibilities of tracking identity of the participants in the cashless society pose large risks. Additionally, cashless society would boost the risks of moral hazard, as banks (and other with them intertwined financial institutions) could be given superior and unparalleled position in the economy, with no fallback options.

Croatia is by no means an exception in these processes, and large banks in Croatia are already supplying their customers with contactless cards, without explaining to them in detail all the caveats. It is argued that by doing so Croatian banks are harming their customers, as they are not fully disclosing the risks of the contactless payment processes.



  ΧΡΟΝΟΣ 25 (05.2015)