Money Money Money

I needed a topic this time around that wouldn’t turn into a major research paper. I’m on a roll in Act 3 of South and would like to get on with it.

How will people pay for things in 2032? The foundations of retail transactions in 2032 are with us already:

Phones as wallets. People are already using their smartphones as vehicles for payments in some countries (such as Japan and South Korea) and have started doing so in the U.S. (at Starbucks, for instance). As major players climb aboard and standards appear, this will become much more common throughout the world. (You already put the rest of your life on a fragile, easy-to-lose piece of electronica—what could possibly go wrong?) This may also be the basis for person-to-person payments, one of the many potholes on the road to that “cashless society.”

Chip-and-PIN credit cards. Already standard in Europe, now heading for the U.S. The advantage here is that no signature is required and cards can be read while in proximity to a sensor, which will supposedly complicate skimming. That no-signature part helps create anonymous, deniable credit card transactions, just the thing for buying stuff without leaving an evidentiary trail.

Online transfers. PayPal is already an online bank in Europe and it (or something like it) will end up going that way in other countries. It works well as a standard avenue for making online purchases and, most likely, online person-to-person transfers. Online transfers are already common in the U.S. for paying bills. This will likely kill off much of the remaining usage of paper checks; however, it requires bank accounts at both ends of the transaction.

Two roadblocks remain on the march toward that ever-elusive “cashless society.”

The animal nature of banks. Remember the Stone Age of banking (that is, the 1970s)? Banks would accept deposits, loan out the money, get interest on the loans, pay less interest on the deposits, give you a toaster for opening an account and still rake in enough bucks to afford to close at 3PM and put the manager in a country club. Now banks are casinos, your savings account is your buy-in at the table, and you have to keep paying to stay in the game.

Fees are a large and rising component of bank profits. Unless you keep a vast amount of money in the bank, you’re going to get nickel-and-dimed to death with fees. The day of the free checking account is long gone. Poor people are already essentially locked out of banks—fees are a proportionately higher percentage of their income than for better-off people—and an essentially unregulated financial industry (part of the 2032 world of South) will continue to pile up fees while cutting back on services for all but the “best” (read “richest”) customers. Yes, there will come to be alternatives. Online-only banks already exist and will likely expand, but it’s probably not a good move to bet on their continued benevolence and charity.

So what? All of the e-payment schemes rely on both the payer and payee having bank accounts of some sort. That already lets out a large number of people in the developed world (and a huge number in the developing world), a situation that won’t get any better by 2032. The future comes slowly to the poor.

Crime. Nobody is going to use his/her phone to pay for his/her weekly coke fix or a bribe. No dealer, extortionist or corrupt official will accept PayPal. Slipping an extra $20 to the maitre d’ to get a better table isn’t going to happen on a credit card. All electronic transactions leave a record and can be traced; we can safely assume law enforcement agencies at all levels will continue to devote increasing time and effort to digital forensic accounting and financial flow tracking. Cash has no such problem and will continue to be the favored tool for illicit payments.

We all pay for things (or get paid for things) we don’t necessarily want recorded in the Great Database in the Sky. Even beyond the grand mal shadiness (drugs, sex, the TV your brother-in-law sells you “off the back of the truck”), cash greases the skids of everyday life. People who get tips for service (waiters, barkeeps, hairdressers, and so on) like those tips in cash so they don’t have to report the whole amount. That Jackson to the greeter to get the better table? Neither you nor he/she wants anyone to know about that. Hubby wants to buy the girlfriend a bauble without it showing up on the credit-card statement for wifey to see. In some industrialized nations, tax avoidance is an Olympic sport, and cash is the steroid of choice. And so on.

Why can’t the authorities simply ban cash or place restrictions on its circulation or deposit? They already do (the $10,000 reporting trigger for deposits or withdrawals at U.S. banks, for instance) and it hasn’t slowed down illicit cash flows one iota. Besides, who often benefits from untraceable under-the-table payments? That’s right: the people who would have to pass the restrictive laws and authorize their enforcement.

How This Works in South

  • Our hero Luis carries a Pacifico Norte Cartel chip-and-PIN credit card for work-related expenses while he’s doing their business. It’s tied to a series of shell corporations leading to a “data black hole” that’s essentially untraceable.
  • His wife Bel, who pays the family’s bills, uses online transfers from their bank account. She hasn’t written a paper check for years. Just as well; the Postal Service went belly-up in 2019.
  • Most all the characters keep their money in Mexican banks. They charge no fees, pay decent interest, and the cartels won’t allow them to go bankrupt or do anything stupid (unlike in the U.S.). However, the cartels are also able to easily get into transaction records, which bites one of the characters in the butt.
  • Everyone still carries cash to pay bribes (contract cops in the U.S. have become entrepreneurial in the same way as Mexican cops traditionally have been, since their pay has been cut and pensions done away with) and buy things they don’t want tracked.

 

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