I am one of the few people I know who still uses cash for small amounts, I put all other ordinary expenses on a credit card, which I pay the full statement balance of every month. I do this because this is how things were when I became an adult. Why use a Debit card when you have a credit card? I get various answers.

But, I see no reason why every small purchase should be logged somewhere, so I carry some "folding money" at all times like my father told me to. I know people who do not, and don't even have coins in the car to put in a parking meter. I don't know why. Two different worlds.

Anyway, could the US not start having cash cards that function just like paper money? It exists elsewhere.

If I paid for gasoline with cash I could save 5 or more cents a gallon, so there is actually a disincentive to use credit. Also, the stupid machines do not use the chip, and I have had my card info stolen - further disincentive. But they can't steal e-cash from a real electronic cash card.

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    Help me understand what you are asking about: You day that you don’t want “every small purchase” to be “logged somewhere,” suggesting that you are looking for some anonymity. Yet you also say that you want “a card that would be of no use to anyone to steal from me.” Is there an example of something that meets both of these requirements? Feb 24 '19 at 20:42
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    You're asserting this exists somewhere. Please name an example country or service, or more keywords or information about the design from 30 years ago that you state meets your needs.
    – user662852
    Feb 25 '19 at 15:25
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    @ScottRowe, You are making the contention that something called e-cash that you think you recall hearing was used by the olympics is impervious to the fraud of the current system because of a pin number (not impervious to fraud) and this e-cash is a magic silver bullet that's both better than cash and different than a debit card. You don't want to accept that this magic is just a fancy name for a debit card and cannot cite a single place that it exists or any mechanism that causes it to be a functional improvement over debit cards.
    – quid
    Feb 26 '19 at 18:49
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    @quid No, e-cash is not debit. E-cash is an offline stored value system. It has been very successful in transit payments where the latency of communicating with a central computer was unacceptable. In some places, such transit systems have expanded to retail, examples: HK's Octopus, JP's Suica/Pasmo. In other places, the systems are deemed obsolete with better connectivity, examples: London's Oyster to Contactless transition, Chicago's contactless-only Ventra. There are a few standalone e-cash systems: FR Moneo, NL Chipknip (both defunct), SG Flashpay, DE GeldKarte.
    – user71659
    Feb 27 '19 at 0:29
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    @Scott Rowe By your argument, doctors and fire fighters should not be paid at all.
    – pojo-guy
    Mar 2 '19 at 14:46

If I paid for gasoline with cash I could save 5 or more cents a gallon, so there is actually a disincentive to use credit.

At some fuel stations, so just carry cash. Or spend $0.50 for the convenience of not having to carry cash.

Also, the stupid machines do not use the chip, and I have had my card info stolen - further disincentive.

Why? The fraud (in the US) is your bank and payment network's problem.

But they can't steal e-cash from a real electronic cash card.

Why? What's magical about an "e-cash" card? There's going to be some new transaction authenticating network that's magically impervious to fraud? Right now, the government (all of them) runs exactly zero fraud-free services.

The best thing about cash is it marks the end of the transaction. That'll be $10. Here's a $10 bill. Done. There are no remaining potential hooks in to my wallet. If I get mugged, the only cash at risk is the cash on my person. The worst part about cash is that you have to carry it.

A government issued electronic cash card is ALMOST as bad of an idea as discontinuing $100 bills. The lunatic economists think this is a good idea because it would impair people's ability to launder money and transact illicit items in the black market, because $10,000 of $100 bills can still fit in your pocket. It's almost as if $10,000 can't fit in to ~7.5 ounces of gold for easy discrete transport, transacting, and bribery.

  • My credit card info was stolen by a gas station skimmer the day before I was going on vacation, so that was inconvenient to me. I don't want that to happen again. I have been mugged and had to go to the ER for stitches in my head. I don't want that to happen again. A true e-cash system is actual cash, it marks the end of the transaction, with no hooks. Apparently no one knows what I am talking about. It was designed about 30 years ago. With chip cards it would be easy to implement. The technology is here. Let's go.
    – Scott Rowe
    Feb 24 '19 at 23:53
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    With chip cards it would be a chip card like every single other chip card. There is no point to doing away with cash. There will never be no crime.
    – quid
    Feb 25 '19 at 0:42
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    @Scott Rowe: So how do you use your cash card to give money to someone who doesn't have a card reader? Why wouldn't a gas station skimmer work on a cash card, just as it did with your credit card? As for problems getting mugged, may I suggest moving to a different neighborhood?
    – jamesqf
    Feb 25 '19 at 18:21
  • @jamesqf If there was no reason to steal, every neighborhood would be safe. One of us has the wrong vision for humanity.
    – Scott Rowe
    Feb 27 '19 at 12:49
  • @ScottRowe there will never be no reason to steal.
    – quid
    Feb 27 '19 at 19:59

This is too long for a comment, and is not really an answer. It's an incomplete explanation of some of the underlying technology and how some of your assumptions may be incorrect.

Anything electronic is both traceable and spoofable. Today's latest and greatest technology for electronic currency is blockchain. The technology was sold on the basis that it was reasonably unhackable. Nevertheless, you just need to google "Bitcoin exploit" to start seeing its vulnerabilities. Everything else works by authentication and authorizing transactions against a financial institution's system.

Today, the chip in your card simply contains enough information to securely confirm its authenticity to the system and a short program that executes the communication requests. It is more secure in some ways than the older mag stripe and pin, but still has its vulnerabilities.

Edit The wikipedia article at https://en.wikipedia.org/wiki/Ecash explains the history of e-cash, why it failed in the US, and why is was marginally successful in Europe.

  • In the US, only 5000 customers signed up for it in a three year trial period - there was no demand
  • The proliferation of debit and credit cards made the e-cash model less attractive - There is no benefit to the vendor, and the privacy benefit to the consumer was insufficient to differentiate ecash
  • In Europe, with fewer electronic options at the time, e-cash made more sense.
  • Digicash, the primary mediator of e-cash transactions, went bankrupt in 1998 because they were unable to compete with other electronic exchange media
  • Better is better. Reducing the attack surface is good. Making crime harder is good. Putting better technology in everyone's pocket is good.
    – Scott Rowe
    Feb 24 '19 at 23:57
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    Also, the difference between actual cash and electronic cash is that one needs a considerable bit of infrastructure to produce really acceptable counterfit money. With electronic cash, anyone with a PC and an electronic parts catalogue (and sufficient ingenuity) can hack the system.
    – jamesqf
    Feb 25 '19 at 18:25
  • @jamesqf not so, e-cash is actual, serially numbered entities that are verifiable, just like bills with a serial number. It cannot just be churned out by any PC. This has all been written up and explained by very smart people.
    – Scott Rowe
    Feb 26 '19 at 13:07
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    @ScottRowe e-cash is not serially numbered - it's RSA Hash code tagged. RSA hash codes can be churned out of any PC, but there is a level of trust that has to be established between the PC's exchanging hash codes. If either machine fails the trust test the transaction fails.
    – pojo-guy
    Feb 26 '19 at 15:19
  • @Scott Rowe: Anything can be hacked. See for instance recent news articles about supposedly-unhackable blockchains being hacked. Or spectre-type vulnerabilities...
    – jamesqf
    Feb 26 '19 at 16:46

The core is that US phone calls were much cheaper than in other countries, in part because our telephone monopoly, the Bell System was private and ended in 1984. Europe had government-run phone companies (PTTs) well into the 1990s.

Europe has been pushing various "offline" schemes, stored value e-cash and EMV chip cards, which allow transactions to occur without contacting a central service. This avoids the cost of making an expensive phone call, which was the only practical way to send data in the days of e-cash.

The US has had cheap and/or unlimited local phone calls due to regulatory pressure. This was the Bell System's way of placating government pressures to break up the monopoly. They provided local service at cost or a loss, to be made up with inflated long-distance rates.

The offline technology pushed by Europe and its players, such as the smart card industry, is now obsolete. The Internet and cell networks of course offer constant always-on high-speed links to a central computer.

Online transactions offer the opportunity to detect fraud in real-time as well as lock and revoke stolen cards instantly. The latter is the major issue in stored value e-cash: risk of loss.

  • Offline capability will never be obsolete. It is the only sane way to maintain systems in the face of increasingly large outages and attacks. It is not optional.
    – Scott Rowe
    Feb 27 '19 at 0:45
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    @ScottRowe The problem is offline doesn't mean what you think it means. Offline in all of these systems means the transaction occurs without contacting a central computer, but there is still end-of-day reconciliation with a central computer. The money is then transferred via existing networks. Otherwise you get all of the dangers of cash, like robberies and counterfeiting, and risk of loss. Ultimately you can't have it all. You can't have anonymity, and decentralization with good security and fraud protection all in one.
    – user71659
    Feb 27 '19 at 1:00
  • We have paper bills now. Just use a chip card to store the cash in. Done.
    – Scott Rowe
    Feb 27 '19 at 12:38
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    @ScottRowe I really wonder how you think ecash works. “Just use a chip card to store the cash in.” That’s like saying “just use a computer to write the next hit TV show.” It betrays such a fundamental misunderstanding of how the world works that it appears you think it’s all just magic. I am at a loss for how to wake you up on the subject, as the flagrant illogic in your own comments has evidently entirely escaped your notice.
    – Wildcard
    Feb 27 '19 at 18:47

It might be helpful if you gave a link that explained what countries have what you are describing and how it works.

You state in the comments that it would be useless to someone to steal your ecash card because they need the PIN to use it. Surely this is naive. You need a password to access many bank websites, and yet this does not make them 100% safe. Scammers steal passwords all the time. A common scam today is to put "skimmers" inside or over the credit card slot at gas pumps or ATMs, or to intercept wireless communications. Surely if such ecash cards were common, scammers would figure out ways to beat whatever security they had. Ranging from super hi tech password cracking to putting a gun to someone's head and saying "tell me the PIN or I'll blow your brains out" to all sorts of things in between.

How would these ecash cards be anonymous? This gets back to how you suppose that these cards do or could work. If the amount of money available to be spent with this card is stored in a bank somewhere, and every time you use it the bank checks its records, verifies that you have that much money available, and then subtracts from the balance, then the bank must know who you are, or at least know some sort of ID number for the card, and have records of every place you used it. If you bought the card or added money to the card through your bank account or with a credit card, then they know who you are. I suppose you could have a system where people buy these cards with cash and do not show any identification.

If the bank does NOT validate and record every transaction, how does anyone know how much money is left on the card? If the number is stored electronically on the card, there's a very obvious scam here: Get a machine that can read and update the data on the card, and change your balance to a million dollars. Maybe there's some sort of encoding or encryption that makes this hard. Presumably every store where you might use the card has to have a machine capable of changing the balance, so it's not like the hardware would be hard to obtain.

Someone on here said that such cards would have to be issued and managed by the government or there would have to be fees to pay for the system. Of course if the government did it that wouldn't magically make it cost free, it just means you would pay through your taxes rather than paying at the bank. Even if the government could do it just as efficiently as private industry -- pause here until the hysterical laughter dies down -- I don't see why taxes are preferable to bank fees.

Personally, I very rarely use cash. I pay for almost everything with either a credit card, which I then pay the balance every month, or with electronic transactions. I have a small business that I moved to another state 10 years ago, and it wasn't until last year that I finally got around to ordering new checks with the new address, because in the intervening time I only wrote 2 paper checks. (For those 2 I crossed out the old address and hand-wrote the new address, which seemed excessively tacky looking, so I finally did get new checks. I don't think I've used one yet.)

So I think if anyone would be receptive to this idea, it would be me. But I'm struggling to see how what you are suggesting is better than a credit card or a debit card. I'm willing to be convinced. It's quite possible that I don't understand how these cards you're describing work. (I looked up "Europe cash cards" and what I found didn't explain much about how they worked, not enough to make clear what the advantages are.)

  • The card stores the cash entities, just like your wallet does today. It cannot be traced without unreasonable effort, just like serially numbered bills today. It is nothing new or different, just in a computer chip. This is not rocket science. I read about it long ago, and have seen articles periodically. I figured someone must have implemented such an obvious scheme by now. But I have overestimated people, apparently. I have old checks too. The advantage of government doing something is that it is infrastructure: ubiquitous, it works, we can rely on it, not profit-based. Everyone benefits.
    – Scott Rowe
    Feb 27 '19 at 12:34
  • @Scott Rowe: The problem is that it doesn't offer any advantages - if it ain't broke, why fix it? And there are some pretty obvious disadvantages, the most glaringly obvious being how you give some of your electronic cash to a person who doesn't have the infrastructure to read the cash card?
    – jamesqf
    Feb 27 '19 at 19:10

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