Daily Management Review

Unpopular restrictions on payments in cash further weakens the EU Commission


On January 23rd of this year, the EU Commission issued the ‘Commission Initiative Roadmap’ for 2018 regarding the reinforced fight against the financing of terrorism. These measures happen to be in fact restriction on payments made in cash. In other words, the Initiative is not so much about fighting terrorism but more a war declaration to cash money. The EU wants to become cashless but Europeans disagree and the Initiative has made Europe loose more of the little credibility it had left.

On the road to energy currency, cash is methodically being withdrawn from society in order to convert to a 100 % digital system. The system would benefit to banks, electronic payment methods (like credit cards companies), online wallets and the giants of internet Google, Amazon, Apple and Facebook. With no cash in circulation they will be able to do whatever they want and the public will have very little power with its own money.
Since the EU’s initiative, it’s becoming increasingly apparent that we are moving toward a cashless future, whether we like it or not. The concept of a cash-free society is being sold to us on the premise of reducing both crime and corruption and sometimes to promote ‘economic well-being and inclusiveness’, however, if we scratch just below the surface, we can see that major companies like Visa and MasterCard and their digital payments peers have a vested interest in forcing an end to cash.

Visa conducted a survey in the U.S to target their future consumers. Their research show that card represent 55% of millennial generation’s spend. Not only credit and debit cards are popular among this age group but they are more likely to use smartphone and other wearables for payments than Baby Boomers. In the U.S millennial represent 75.4 million people. That is the reason why Visa and MasterCard were very anxious to penetrate large markets like India and Europe.
In India, the case has already been made that Prime Minister Modi himself (who started the war on cash by banning some banknotes) was closely lobbied by the card payment giant companies. For the EU, it is very likely that banks and credit card companies have pushed towards the decision made by the Commission.
In fiscal year 2016, Visa’s profits were $5.991 billion, down from $6.328 billion in 2015. Mastercard’s profits for 2016 was $4.1 billion, an increase of 7 percent on a year-over-year basis. Obviously, both companies would love to see the European economy weaned off its cash habit.
These decisions are only proving once again how the EU has been influence by the banking sector’s interest and not by the citizens’ habits and choices.
The gap between Brussels and European citizens keeps increasing
Countries like Germany are likely to resist first as their use of cash is higher than anywhere else. ‘There is a culture of cash in Germany, many Germans value their anonymity in payments and they are used to carry large amount of cash on them’ says Victor Kreutz, financial analyst in Berlin. ‘Germans already disagreed with the EU’s decision to ban the $500 note last year. Now there is a true distrust between the German population and the EU Commission about this war on cash’ he added.
Germany could be one of the first countries to rise up against the restriction on cash payments.
Across Europe people feel cheated by the EU. Fernando Cevallos, economist in Madrid, explained that ‘across Spain and probably Italy and France, citizens feel like they haven’t been consulted’ and that the EU ‘is making this decision just to satisfy the bank lobbies wants without caring about how life changing it would be for the Euro users’.
It is one of the first time that we see a policy being implemented without a real coming from the masses nor any potential interest for the people. ‘When you look at this measure it is purely a dictatorial decision made by the EU leaders which will have a tremendous impact on the lives of the citizens who are likely to suffer from a revolution in their savings as well as negative interest rates, and it happened in silence as they pretexted the reason was to fight criminality and terrorism, but it appears to be a pure lie’, Cevallos added.
The negative interest rates mentioned by Cevallos are what banks are dreaming of and that is just impossible as long as there is cash in circulation. It is the ultimate jackpot for banks which will reduce drastically their costs of operation with less employees and less security but also with making money out of people savings instead of giving back to the people who chose to have their ‘savings’ produce more capital.
The very primary definition of ‘banking’ could be eradicated and in a few decades from now we could even forget that people placed their money in bank to generate more profits from their savings. Soon, banks can rime with expenses only and yet we will not have the choice to ‘withdraw’ or money as paper will have disappear. Welcome to the future.