The right to pay anonymously has become part of an EU culture war

Karl Nehammer, Austria’s chancellor, announced plans to enshrine the right to pay with cash into the country’s constitution on Friday (August 4), as card contactless payments become more popular in Europe.

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Nehammer proposed the amendment after the Austrian Freedom Party—a far-right party currently surging in the polls—accused the current government of conspiring to ban cash as a means of tracking its citizens. Nehammer is the leader of Austria’s conservative People’s Party, which rules in a coalition with the left-wing Green Party.

“In Austria alone, 47 billion euros are withdrawn from ATMs every year and on average every Austrian carries 102 euros in cash,” Nehammer wrote in a tweet (original in German). “That is why I… am committed to ensuring that cash is constitutionally protected as a means of payment.”

The plan would guarantee cash as a payment option, as well as instruct the Austrian Central Bank to secure a basic supply of paper currency. Nehammer has tasked Finance Minister Magnus Brunner to lead the effort, while collaborating with other government ministries and representatives from the private sector.

Is cash really in danger?

Earlier this week, Piers Corbyn—brother of former UK labor leader Jeremy Corbyn—made headlines for an act of civil disobedience: buying a pack of strawberries with cash at an automated grocery store.

“I paid by legal tender and I am going out with my strawberries,” Corbyn reportedly shouted as he forced his way out of the store over the protests of employees. “I paid by legal tender, in this dystopian place.”

This protest is part of a growing movement to save cash, driven by political movements in the EU and beyond, that suspect government, corporations, and private financial institutions are eventually going to stop accepting cash altogether in favor of credit and debit card payments that are easy to track and monitor.

There is data behind this trend. In the US, the number of Americans who regularly use cash has slipped from 24% to 14% since 2015, largely driven by mobile contactless services like Apple and Google Pay.

Contactless payments are increasingly prevalent in advanced economies in Europe, although some countries like Spain and Germany remain cash-positive. Sweden has taken the controversial step of allowing businesses to refuse to accept cash, with the intention of becoming a cashless society.

Credit card companies sell your data to advertisers

Suspicions about big banks and financial institutions tracking their customers and mining personal data have raised alarm bells about the transition to a digital currency, with activists arguing that cash is the only way to ensure privacy.

Increasingly, credit card companies—including Visa, American Express, and Mastercard—have turned to compiling and selling personal transaction data to advertising companies as a major profit source. The data behind a majority of digital transactions are now passed along to marketers, companies, and other firms that mine that data to monitor trends and create personalized ads.

This invasion of privacy is legal because of a loophole known as tokenization, a financial technology pioneered in the 90s that anonymizes personal data from transactions with a unique identification code, that can later be correlated by a firm with a bank’s individual customer file.

These systems have become so sophisticated that they are often predictive. For example, many stores are able to find out that their customers are pregnant through their shopping habits, accurate to within days. In 2012, The New York Times reported on a father who found out his teenage daughter was pregnant through targeted home mailers advertising maternity clothing and nursery furniture.

Additionally, non-cash payments put a financial burden on businesses, with major financial institutions charging a credit card processing fee. These fees can be as high as 3.5%, affecting both merchants and customers.