Marc Craquelin

"Don't touch the loot"

At least once a month, 20% of French people exceed their overdraft limit. This is one of the main reasons that the founders of the Nickel account decided to offer payment cards for everyone, including the least well-off and also those on a credit black list, via the unexpected distribution network of tobacconists. While the company is still in the teething stages, its concept seems promising given the extent to which it is increasing difficult to live without a dematerialised payment means. Those used to bank overdrafts know that these dematerialisation costs can quickly become crippling with overdraft rates reaching double-digits! We expect the creators of the Nickel account to attract ever more victims of overdrafts that can become abyssal.

The obligatory dematerialisation of payments concerns the entire population, from the least well-off to the very wealthy. As such, it is now impossible to pay a tax instalment of more than €30,000 by check. Paper payments, whether by check or notes, are now a thing of the past.

With the aim of fighting tax fraud and the underground economy, the European Union has stepped up the already well-established dematerialisation movement, and is now in the throes of abolishing cash money. A number of economists are happy about this, seriously stating that notes limit the impact of negative rates policies since they do not suffer the effects. Denmark, which is not in the eurozone, has gone one step further by proposing a law that would allow shops to refuse cash payments. Electronic payments, with their faultless transparency, are increasingly attractive. The traceability of spending is praised although somewhat rapidly the use that is to be made of it is forgotten.

Who benefits from the act? Those that value the trace. Whoever has used an AMAZON account knows that a few purchases suffice to create a consumer profile. AMAZON like GOOGLE are above all well-informed client bases. And these bases are soundly valued with AMAZON boasting market capitalisation of $200 billion and GOOGLE $375 billion.

Closer to home, French company, Criteo, enables its clients to better target their advertising campaigns using predictive algorhythms. The theme is the same: the dematerialisation of payments produces an increasing dissymmetry in information between consumers and sellers, in favour of the latter. Valuing this information is what the companies we have mentioned do, each in their own way, and this is why we are their shareholders.

However, while shareholders can fully rejoice in these attractive investment cases, citizens know in return that they were born out of the forced abandoning of a share of freedom. Traceability imposes the production of information that once recovered, distorts classic rules of price balance. The much-praised transparency that our legislators keep harping on about has its dark side. It also has unexpected consequences. Nobody can rejoice too quickly in the morality restored by the dematerialisation of payments without noting that this virtuous model, enabling the eradication of tax fraud, also enables the emergence of monsters that pay no taxes (AMAZON and GOOGLE). What an unexpected mockery!

“Money is coined freedom” said Dostoyevski – dematerialisation using a Nickel or an Amex account, is another bit of freedom lost.

Marc Craquelin