Bumps Ahead of a Cash Less Society
If you believe conspiracy theorists, a world government is about to be formed spawned by the demonetization of hard currency enabling a cash less society that can be controlled by a flick of a button. To most people money equals to currency in their hand. With the recent demonetization in India of higher denomination currency notes, the problems that average person faces has come to the light and this could be a first step in moving towards a completely cash less society in India and eventually rest of the world.
A key player in this is the banking system or financial institutions and let us see how they have handled fraud in the past and how are they dealing it in the present to understand what is store in the future. Couple of decades back, someone who knows you walks into your bank, submits a cheque with a forged signature and walks away with the money in your account. This has become more difficult for amateur fraudsters as banks have now checks and balances with regards to withdrawal of higher amounts.
Therefore now, if someone does this then the bank is clearly at fault and you are credited the amount that was fraudulently debited. The loss is borne by the bank internally accountability established. However, as we move toward a cash less and check less future depending solely on digital transactions, though banks are still responsible to safeguard your money, you may actually loose money.
The reason is that once money is digitized and you use various forms of methods to take money out from your account, the boundary of who carries the risk is blurred. And more so the risk is being pushed onto the customer today than earlier.
Though Banks treat “Identity Theft” as a newly discovered crime and financial fraud waiting to happen, it is not much different from forging a cheque. And yet the onus is on the customer to protect their identity and credentials rather than with the bank. Increasingly we are seeing the terms and conditions imposed on customers in rather fine print are skewed more in favor of the banks.
So yes it is all right to move towards a cash less society but it has to be clearly defined as to what constitutes risk and who is to cover it before we take the final step.