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The Importance of Payment Anonymity: A Case of Self-Deception

 7 min read / 

The foremost reason that cashlessness hasn’t captured America’s interest as a goal is that it involves giving up cash’s anonymity and privacy. It explains why the US isn’t a participant in the world cashless movement and that its policymakers turn their back to the idea of ditching cash.

A Privacy-Conscious Population

Ongoing breaches of digital data and violations by those entrusted with it heighten citizens’ angst about its security. The more that it’s compromised, especially by government, the more Americans cherish the anonymity and freedom that cash guarantees. This seems natural.

Yet, it’s not that simple. Forces that erode privacy in America aren’t much hampered by the circulation of traceless cash. It’s an
illusion that payment anonymity serves as a defence to industrial and governmental surveillance programs. Although digital payments can reveal a wealth of personal information, today’s robust systems draw from myriad sources other than payments.

The privacy-conscious mindset finds it counterintuitive to give up cash and thus ‘empower’ or ‘set the stage’ for Orwellian governance. But, this accomplishes nothing more than to perpetuate cash’s profound detriments – not least, rampant cash robberies and its exclusive use in drug dealing that kills tens of thousands each year.

Data Mining and Security

Beginning in the late 1990s along with advances in digital expertise developers created programs for lenders, telecoms, credit bureaus, bankcard issuers and even charities to verify customer backgrounds, evaluate individual worth, reveal past criminality, and more. These programs mine data gleaned from a variety of sources, including public records.

The 9/11 terrorist attack suddenly rendered these programs critical to national security. The immediate need was for a way to profile flight passengers. Companies experienced in data mining, including HNC and Acxiom, answered the call. Subsequently others competed for government contracts including Accenture, LexisNexis, ChoicePoint and Seisint. The divide between
private and public sector profiling blurred over.

In 2004 Palantir, a firm founded by Peter Thiel, began working with the Pentagon and CIA. By this time, surveillance technology had become fine-tuned and omnipotent in its ability to ferret out and store volumes of personal data and to extract any and
all related to an individual. A mere click on a name or alias fills a large screen with an incredibly detailed web of facts and contacts, many items long-forgotten by the individual. Those in the know comment that today’s capabilities are

The numbers and extent to which system operators actually exploit individual backgrounds are known only to officials. The potential for profiling abuse is abundantly clear, for they have the capability to target racial, religious, political and dissident groups. And, America has already experienced unconstitutional blanket invasions of privacy. All of which inspires privacy campaigners to oppose profiling operations. Modern surveillance programs are a perfect fit for authoritarian rule.

That said, the issue of whether or not America might become a police state doesn’t turn on their implementation or usage. Rather, it’s a matter of how the nation governs itself. All that really protects citizens are the ‘checks and balances.’ After all, countless dictatorial regimes gained power long before computers arrived on scene. All that’s needed are secret police, messianic propaganda, an army of informants and the executioner’s pistol.

The Impact of Ditching Cash

Still, cash is one of the few remaining niches of nearly-absolute privacy. It’s difficult to abandon the belief that abolishing it would leave citizens only digital-payment alternatives and effectively add to the vast body of personal data swept up into personal dossiers.

As counterintuitive as it may seem, however, ditching cash would have minimal impact and is unlikely to enhance profiling. This is because surveillance programs are specifically designed to unveil and expose individuals who, among other ploys, rely on cash to avoid detection. The schemes are largely based on non-payment data.

Monetary transaction data is a rich source; but hardly the only one. People create and leave factual evidence about themselves in numerous ways. Contacts by any means of communication with public or private bodies, retailers, charities or service providers leave traces. Still, other data is drawn, directly or indirectly, from relatives, group members, acquaintances, warranty cards, security cameras and even from the ‘Internet of things,’ such as data emitted from devices embedded in cars and home appliances.

The diversity of data that surveillance programs use to identify you is telling: your pet’s name, sex partners, associates, neighbors, friends, social security number, unlisted phone numbers, court appearances (witness or otherwise), unemployment and disability data, traffic tickets, ATM activity, check cashing, media posts, bankruptcy filing, building permits, travel history, photos, VIN numbers, and web history.

The Bigger Picture

A profiler doesn’t necessarily start with your name.  Your birth date, gender and zip code will identify you 87% of the time. A probe might begin with a remote lead or concept used to mine an ocean of disparate information and to ultimately extract an eerie ‘lifeprint’ of an individual. It’s nearly impossible to escape this vulnerability by limiting payments to cash. One would have to live as a recluse or hermit to escape it. But if any personal fact at all surfaces, a dearth of additional contact data creates suspicion that someone is intentionally hiding and is reason enough to launch an investigation.

This isn’t to say that cash is completely ineffective against surveillance. It provides a modicum of defence. While not foolproof to
the overall scheme, paying exclusively in cash, for example, can foil tracking of suspects by means of monitoring their real-time electronic payment activity. Overall, this is negligible.

Hackneyed warnings that cashlessness leads to Big Brother surveillance – ‘slippery slope,’ ‘could lead to,’ ‘creates conditions for,’
etc., — are simply wrong. Surveillance systems have arrived and are in full operation. Cash or no cash, and whether we despise or need them or not, they are a reality.

Apart from industrial-government surveillance, there’s another closer-to-home role of cash’s anonymity to consider. Tangible currency is handy for hiding payments from spouses, partners, employers, parishioners and others – for purchases that if discovered from digital sources could draw condemnation, cause embarrassment, humiliation, wrath, divorce, loss of a job, ostracisation, or other repercussions. These typically involve sex, third parties, alcohol, drugs, gambling and/or spendthrift behaviour. Examples have also been cited of a young girl paying cash for a pregnancy test kit, and a clergyman buying food in
violation of his faith.

The disappearance of cash for such artifice would disappoint millions. However, cash isn’t the sole means to keep payments discrete. For example, to prevent others from discovering explosive facts from joint, company or organisational payment records one can establish a separate payment account, or employ friends to make payments, or perhaps use anonymous prepayment cards.

Yet, even in the absence of adequate cash alternatives, the resultant harm in the worst of these predicaments isn’t in the same league with widespread human losses and other social and economic damages linked to cash. Indeed, the great majority are relatively trivial.

The bottom line is that America needs to come to grips with the fact that payment anonymity is a hollow defence against data surveillance. Instead, policymakers need to turn attention to the physical role of cash in street crime and the many ways that payment anonymity is taken advantage of by perpetrators of a host of antisocial activities ranging from tax evasion, welfare fraud and shirking of support orders, to bribery, drug smuggling and human trafficking. The constant, distasteful threat of data surveillance notwithstanding, the abolition of cash will make America a vastly improved society.

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