Austria to enshrine the right to pay with cash into constitution

On 4 August, Austrian Chancellor Karl Nehammer announced plans to enshrine the right to pay with cash into the country’s constitution as card contactless payments become more popular in Europe.

Nehammer proposed the amendment after the Austrian Freedom Party, which is currently surging in the polls, accused the current government of conspiring to ban cash to track 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“In Austria alone, 47 billion euros are withdrawn from ATMs every year and on average every Austrian carries 102 euros in cash,” Nehammer wrote in a tweet (original in German).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 and 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.

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 tokenisation, a financial technology pioneered in the 90s that anonymises 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 place 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.

The above is an extract from an article published by Quartz.  Read the full article HERE.