“We at Eastern Quay Asset Management recognise
that each client faces different challenges and
has a unique set of aspirations and goals.”

Eastern Quay Asset Management - Corporate News Article

EQ News | Monday March 13, 2017

Cashless Inconvenience



Would a digital utopia usher in an era of cashless convenience? America’s experience with online commerce is not at all too convenient. A recent 2017 study on identity fraud by Javelin Strategy and Research reports that $16Billion was stolen from 15 million American consumers in 2016 alone, compared to $15.3Bn from 13 million victims in 2015. Much of this inconvenience was due largely to credit cards being hacked or new account (identity theft) fraud – where the thief opens a credit card account using the victim’s stolen personal information. In all cases, the thief purchases the items online leaving the unassuming victim, or online retailer or issuing bank to foot the expense.

Identity Theft and Fraud Complaints, 2012-2015




Percentages are based on the total number of Consumer Sentinel Network complaints by calendar year. These figures exclude "Do Not Call" registry complaints.

Source: Federal Trade Commission, Consumer Sentinel Network.

This leads us to argue that a cashless society still remains too problematic and does not offer a genuine solution that is safe, secure and efficient. In fact, we list down the issues where online convenience outweighs more risks.

Hackers. Google wallet once claimed that it was safer than cash and more secure than credit cards. Yet it had to temporarily shut down due to a security vulnerability. [Chinese] hackers were also blamed for the illegal transfer of $20Million from the Bangladesh Central Bank account under the watch of the Federal Reserve Bank of New York. We’ve had a friend or two who’s ATM funds might have been withdrawn somewhere in another part of the world, or one’s credit cards have been maxed out on a shopping spree in a place they’ve never been to. In anticipation of a cashless or even cardless future, we can only bet on hackers becoming more and more sophisticated as to how to get into your financial accounts – either by stealing information, or withdrawing your funds or shopping online in your behalf.

Failure Rate. Even biometrics have a 1% failure rate. The reasons can include a bugged mechanism, slow internet or faulty wiring – causing the machine not to recognise your thumbmark information. Consider that out of the 325 million Americans, 100 million would want to use a biometric system to safeguard their digital wallets. At 1%, that is almost 1 million US consumers not able to access the system. That is very significant.

Too Much Dependence on Technology. Should you lose your phone, or it gets locked or hacked - can you even transact? Too much dependence on phone, tablets and laptops to effect online transaction can be a little scary – as they all rely on something else. Imagine if electricity lines were cut off during an emergency or some solar flare/cosmic occurrence affected the satellites high above us?

Loss of Freedom and Liberty. Among the more alarming concerns we have with a digitised economy is giving away all your personal information to the web. Digital transactions in lieu of cash will allow 100% tracking of anyone who does their business online. Any method that inhibits freedom should be shunned since it runs against the spirit of free & cherished democratic principles.

Combined with identity theft and all forms of cybercrime that involve your online accounts, the increasing trend where banks, institutions and online retailers are being hacked pose an ever increasing liability to one’s assets and safety. Personal computing systems such as the mobile phone, tablets or laptops where one inputs one's credentials are ever more compromised that they used to be. Online shopping has a weak fraud detection system, where many victims of fraud usually find themselves with a locked account – with no access until the case is cleared.

Which leaves us for now, at least in America, to hold on to and trust in the mighty dollar bill to make our lives run smoothly. You will never know when your phone will die on you. Cash still remains king.