Scott Pape's tips on how to pay your mortgage faster
The author of The Barefoot Investor recommends paying all small bills in cash if you want to complete your mortgage faster.
The author of The Barefoot Investor recommends paying all small bills in cash if you want to complete your mortgage faster.
Data rights are human rights. Cash is the only payment instrument with Triple A rating.
Paying and getting paid in cash protects your payment data. Rethink how you pay and get paid after watching the following documentaries, TED talks and videos.
According to A. Prof. Worthington from Swinburne University, cash has a triple A rating, "It is Anonymous, based on the absence of an audit trail. It is widely Accepted and acts as a fall back if all else fails. It is also Authentic, in that can be touched, seen and stored for later use."
"They took your data. Then they took control."
The Great Hack is a Netflix documentary that first aired in Australia on 5 July 2019. The documentary "uncovers the dark world of data exploitation through the compelling personal journeys of players on different sides of the explosive Cambridge Analytica/Facebook data scandal." After the scandal was exposed in the last 2 years, our company closed all accounts with Facebook and we will never advertise on that platform. We are closely monitoring other big data giants for data rights infringements and we'll make similar commercial decisions if necessary. Take a stand if you care for your data, democracy and human rights.
Unmissable TED Talk Speech by data rights crusader, Carole Cadwalladr
"In an unmissable talk, journalist Carole Cadwalladr digs into one of the most perplexing events in recent times: the UK's super-close 2016 vote to leave the European Union. Tracking the result to a barrage of misleading Facebook ads targeted at vulnerable Brexit swing voters -- and linking the same players and tactics to the 2016 US presidential election -- Cadwalladr calls out the "gods of Silicon Valley" for being on the wrong side of history and asks: Are free and fair elections a thing of the past?"
"Centralisation of data is not how the world should work."
"An exclusive interview with former Cambridge Analytica business development director Brittany Kaiser, who claims that the data analytics firm worked on a pro-Brexit campaign, despite chief executive Alexander Nix denying this to a parliamentary committee."
Central banks around the world are increasing the amount of cash in circulation.
However, the LNP Government, with support of the ALP, wants to punish ordinary Australians for paying for anything over $10,000 in cash (see article below). Steve Worthington, an adjunct professor at Swinburne University, asks on ABC on 21 August 2019, "if the continued use of cash is good enough for the central banks and it's still popular with the public, why are governments trying to clamp down on the use of cash"?
According to some in Worthington's article, the hoarding of cash is a direct result of our distrust in the banking system. The RBA now estimates that there are $76 billion of polymer banknotes in circulation, mostly $50 and $100 notes. That's an increase of $3 billion since the RBA published these figures last time.
Other ordinary Australians "say that going cashless leaves them more vulnerable to continuous surveillance via a digital record of all their transactions."
Many ordinary consumers are wary of the regular "outages" (read cyber attacks on the electronic payment system by malicious and sophisticated state actors, organised crime, and who knows who else), which prevents them from "using non-cash methods of payment."
According to A. Prof. Worthington, cash has a triple A rating, "of sorts. It is Anonymous, based on the absence of an audit trail. It is widely Accepted and acts as a fall back if all else fails. It is also Authentic, in that can be touched, seen and stored for later use."
The proposed caps on cash are meant to reduce the black economy, but according to A. Prof. Worthington, the measures are misguided. The "shadow economy doesn't just thrive because of the value and volume of cash in circulation, aided by the current low interest rates. Our own behaviours and attitudes play a part."
"This means it will take more than a cap on cash payments to change our views on cash's Triple A value."
Related news stories on the war on cash.
All news stories we publish here come from various reputable news sources.
Australia is entering an "era of irrationality, impotence and inequality". Government and public service policies are demonstrating this with several policies aimed at fighting the black economy, organised crime, tax fraud, etc. Cabinet ministers and senior public servants are clamouring to give themselves unchecked powers. Follow the ABC, the SBS, The Sydney Morning Herald, The Age and The Guardian Australia for more objective and critical articles on Australian economic policies.
"Do not reverse onus of proof for black economy crimes, say experts"
"Tax experts and business lobbies have hit out against a Treasury proposal to reverse the onus of proof — that is to say that someone is guilty until they prove themselves innocent — as part of a bid to stamp out illegal cash economy activity."
- "Treasury proposes a crackdown on the black economy, such as cash-in-hand, money laundering and sham contracting
- Measures considered include a reverse onus of proof, greater information gathering powers and travel bans for large tax debtors
- Accounting groups say the ATO already has a lot of power and any additional measures need to be matched with increased safeguards."
"India's currency recall: Concerns mount as cash shortage continues"
"Cash-dependent for 90 per cent of transactions, Indians immediately thronged banks.
Because the Government still has not printed enough replacement currency, one month later, those queues remain.
India's people and economy are suffering.
Now, not only are people asking whether the recall will work, but if the disruption its causing risks doing more harm than good to the world's fastest-growing major economy.
Critics of what the Government has termed "demonetisation" have focussed on two basic arguments: bad idea, or bad execution."
"Cash is dead, long live cash"
"Steve Worthington, an adjunct professor at Swinburne University of Technology, who has been following Australia’s transition away from cash, says reliability was a key reason dollar bills aren’t going extinct." (Quoted in Smart Company, November 27, 2018). This blog has been last updated on 19 June 2019.
"Lowe’s [current Reserve Bank Governor] comments come less than a month after a Telstra outage left businesses across the country unable to process card payments, prompting angry owners to take their complaints against the telco public.
Some business owners claimed they lost thousands of dollars in business due to the outage, prompting the telecommunications ombudsman to advise merchants they may be entitled to compensation.
Earlier this year National Australia Bank (NAB) also compensated businesses after its own outage, which left merchants unable to use eftpos machines on a Saturday.
The cases have underscored the increasing seriousness of outages as consumers move away from cash payments, amid broader discussion about the state of play in the digital ecosystem and whether it adequately protects merchants." (quoted in Smart Company, November 27, 2018).
Remember, we have had additional 4 outages affecting major areas of Australia after the RBA's governor's comments. While merchants have the right to expect card electronic payments to work 24/7, they simply don't. No digital system for collecting, storing and disseminating data, including payments' data, is foolproof, or ever will be. The bigger the digital system is and the more sensitive the data is, the more attractive those systems become for hackers.
To make things even more complicated for those bureucrats who simply do not understand how IT systems really work, and should work in a democratic country, we warmly recommend the sobering article written by Melbourne University Associate Professor Vanessa Teague, chair of Cybersecurity and Democracy Network, School of Computing and Information Systems, Melbourne School of Engineering. Her article focuses on the threats to the privacy of law abiding citizens living in a democratic country in the wake of the new Telecommunications and Other Legislation Amendment (Assistance and Access) Bill 2018 (TOLA Act), which was rushed through the federal parliament late 2018.
"The Act aims to give law enforcement access to information, especially end-to-end encrypted services, for which the company providing the service normally wouldn’t have the cryptographic keys necessary to read the information."
According to A. Professor Teague , "security features that enable criminals to hide their illegal activities are also trusted by millions of ordinary people to protect their private information".
Vanessa Teague argues that: "Australian authorities haven’t provided a single example of a technical proposal that would work, let alone a convincing argument that there will be safeguards against exploitation by bad actors. And the TOLA Act provides no way for a targeted company to argue that undermining the security of one user won’t jeopardise others."
In her excellent analysis, which again we emphasise it's worth reading if you care for cybersecurity, privacy and democracy, A. Professor Teague further convincingly argues that "it’s the foreign intelligence agencies that threaten our national security. The Australian Government has credibly accused the Chinese Government of electronic spying. A new intrusion into federal parliament was reported only last week. Any further weaknesses introduced under the TOLA Act could make us even more vulnerable."
There is a link in the simplistic logic behind the thinking of many senior bureaucrats, politicians, some academics, and government experts in how to fight the black economy, organised crime and terrorism. In the case of fighting the black economy and organised crime, the solution offered by these people lies in "cashless society".
In fighting terrorism, A. Professor argues that its defenders are deluding themselves "that giving Australian authorities vast new invasive powers [with the TOLA Act] will save us from terrorists while magically not undermining the security of ordinary Australians."
Both solutions proposed to fight the black economy, organised crime and terrorism (all very laudable goals, by the way), is like giving chemotherapy or radiotherapy to a cancer patient. The therapy might kill some of the cancer cells, but it also might destroy enough or all healthy cells so the patient dies.
In the case of cash, the truth is that it is by far the most reliable payment method than any other currently available electronic payment method given all the dangers we mentioned above. It is for this reason, that the RBA decided to design and print new dollar bills.
The zeal with which the giant multinational credit card networks pursue the cashless society agenda with their business practices, imposing rules on how their cards are used at Australian ATMs, and levying exorbitant charges both from Australian ATM companies and consumers is hurting thousands of ordinary Australian businesses and consumers.
Even if the banks do upgrade their IT infrastructure up to standards that the RBA governor expects from them, which is a big IF since it would be quite costly, the digital payment ecosystem remains vulnerable to telecommunications outages outside the control of Telstra or other telecommunications companies. There remains the issue of increased frequency of extreme weather events due to global climate change and malicious activity by sophisticated hackers (foreign state-sponsored or not). For official figures of the number of data breaches in the last year, see the website of the Australian Information Commisssioner.
We agree on some issues with the analysis of the unrealiability of the electronic (card) payment system offered by Smart Company.
However, we disagree that merchants should absorb the costs for getting paid, which in many small to medium sized businesses could run from tens of thousands to hundred of thousands of dollars a year. This argument just does not make any commercial sense for merchants, especially when you consider that merchants get paid to provide access to a payment method (ATMs) by ATM companies.
Why should merchants be penalised for how their customers pay them? With many small, medium and big brick-and-mortar retailers struggling to survive and contending with ever decreasing profit margins due to competition by retailing giants like Amazon, Zara, and many others, how much merchants pay to get paid can make all the difference between closing down or keeping the doors to their businesses open.
"Official ABS figures [for 2019] show retail turnover grew a meagre 3 per cent over the year to March, and profit margins remain under intense pressure in many parts of the sector from increased competition".
The only companies that benefit from this absorption of digital payments by merchants are behemoth multinational card networks like Visa or Mastercard, and of course the big banks.
Big retailers in the USA have taken a completely different approach to what Smart Company is advocating for Australian merchants.
Bloomberg reported on 19 September 2018, that big US retailers, even after reaching a record US$6.2 billion dollars settlement with Visa and Mastercard, "are gearing up for the next round in their fight with the world’s biggest payment networks. Tuesday’s settlement addresses only monetary damages associated with the lawsuit. There’s a separate class of merchants fighting for changes to Visa and Mastercard’s business practices." US ATM companies are part of these new round of battles against Visa and Mastercard.
According the US News, "the lawsuit still has two other pieces to it that need to be resolved: a dispute over the rules Visa and Mastercard impose to accept their cards, and the merchants who chose not to participate in the settlement, which is likely to number in the thousands.
The original lawsuit against Visa and Mastercard dates from 2005, when the companies were owned by the banks and not public. Merchants alleged that Visa and Mastercard used their dominant market position to impose fees that were artificially too high, resulting in billions of dollars paid in excess swipe fees. Visa and Mastercard denied that and did not admit to wrongdoing as part of Tuesday's settlement." (US News, 18 September 2018).
In Australia, the big retailers, Australian Payments Network, the Australian banks and the Reserve Bank of Australia, have completely surrendered, when it comes to ATM usage, to Visa and Mastercard, allowing these two companies to impose rules on how debit and credit cards with their logos are used at Australian ATMs, dramatically increasing the cost of doing business for independent Australian ATM companies.
While this is hurting the Australian ATM independent sector, it is also hurting hundreds of thousands of Australian merchants, while stifling genuine and fair competition between different payment systems and technologies. Ultimately, consumers are being hurt too, because in the end they pay more in hidden fees or passed on fees for their smaller purchases then what they would pay if they just went to an ATM and took some money from it for their smaller purchases.
While, in the USA, smal, medium and big retailers/merchants are willing to fight all the way to the Supreme Court for every cent they can save on digital and card payment fees, which is a US$90 billion dollar market, here we have the behemoth multinational card networks, the big banks, digital and card payment bloggers seeing the whole digital and card payment system through extremely rosy glasses, openly working to engineer an outcome that deeply hurts the pocket of every Australian merchant.
While the Reserve Bank of Australia, imposed price visibility on ATM fees at ATMs owned by merchants, we expect the central bank to be consistent and let merchants who accept POS payments not only to pass on the charge of POS payments to customers, but also insist that customers should also be able to see, prior to making a purchase, what the merchant or Visa and Mastercard will be charging for a card or digital wallet payment. Merchants in Australia are not allowed to make a profit from passing a POS charge to customers. If customers are able to see this price upfront, before they make their purchase, some of these customers might think again whether they want to pay with their card.
In the case of ATM fees, merchants are allowed to make a profit (small or big, depending on many factors).
As consumers, we pay hundreds of dollars of payment fees every year for unauthorised tapping and waving of our Visa and Mastercard cards by retailing and hospitality staff, who just assume that when you pass your card to them that you want to pay your bill that way. Now, as consumers we only work with banks that give us the choice of debit cards that have the EFTPOS logo only, so if we choose to pay with a card there is no way we have to pay unwanted fees for paying a bill.
We believe that Australian consumers should have the right to turn off the tapping and waving function on their bank issued cards via their online banking websites and apps, as New Zealand bank customers have.
"When you tap a credit card on a machine, you don't really live that experience of parting with money."
Dr Subrato Banerjee, a behavioural economist at QUT Business School
"When you're paying cash at the counter, you're living the experience of parting with money in front of your eyes, which makes you conscious that money is going out of your pocket", states Dr Banerjee in this ABC article. Further, ABC's Emily Stewart, the author of the article, suggests going "back to using cash and allocating a certain amount to each area of spending...You could separate the cash in envelopes or just in sections of your wallet. That way you can clearly see how much you've planned to spend on groceries or luxury items, and you're less likely to overspend".
Ms Metz who was interviewed for the article said that using cash "it's a form of budgeting...It's what our parents used to do when they received their pay in cash. They divided the money into bundles".
In another ABC article, consumer psychologist Adam Ferrier confirms Dr Subrato Banerjee's view on how using cash helps people with their budgeting:
"If you have to reach for cash and count it out, that could turn someone off a purchase. In a frictionless system like tap and go, there is less time for people to reconsider the purchase, so they [consumers] are more likely to spend more.
Cash remains the only truly anonymous payment method.
Despite Australia's embrace of new electronic ways to pay for small purchases, there are too many Australians who do not trust the new payment technologies. Apart from security concerns, many Australian consumers fear the ever increasing erosion of their privacy that goes with electronic, including contactless, payments and the accompanying ubiquitious corporate surveillance by big data corporations tracking every single cashless purchase in order to build consumer behaviour profiles.
Confidence in cash
"It seems the Reserve Bank of Australia, for one, is pretty confident that ‘real’, physical money is sticking around for some time yet,"
"The RBA has begun developing and issuing a new style of Australian banknote, starting in 2016 with the release of a revamped five-dollar note. There’s always plenty of discussion, and sometimes controversy, about the design and appearance of a new banknote, so the behind-the-scenes science and innovation can sometimes play second fiddle. In the case of the polymer banknote, it’s a uniquely Australian story."
Australian Academy of Science
The new $5 note.
The new $10 note
The new $5 note is considered a scientific wonder.
3.75 million Australians are staunchly cash-centric.
Fifteen-percent of respondents in an Australian market research stated that they paid for all their small purchases in cash.* "The Evolution of Cash: An Investigative Study", Sydney: Australian Payments Clearing Association, 2014).
On 4 July 2018, the ABC published an article on the closure of the last bank branch on Lefevre Peninsula, South Australia, angering the local community. One local businessman was quoted in the article saying that "the elderly people still live in a cash society and won't be able to get their cash out and will be restricted in what they can spend". The chief executive of the Council on the Ageing in SA, Jane Mussared, said in the same article that "an increasing number of older people were on 'the other side of the digital divide' and were struggling with many of the new payment technologies.
More than 100 regional bank branches have been closed in the last 16 months, with a devastating effect on businesses in small and remote Australian towns.
Most of the articles you read about cashless society in the media are based on "research" that can not bear a rigourous scrutiny of a well designed academic study. For many of these media articles, the "research" consists of interviewing 5 to 10 businesses in inner city areas of Sydney or Melbourne (hardly a true representation of the breadth of businesses across the whole country). A lot of these articles are funded by companies with vested interests in cash disappearing as a payment method from the Australian payment ecosystem.
The media outlets who publish these articles do not declare that in reality you are reading an advertisement for a company developing one or another app for cashless payment, who are happy to share with you their wildest dreams and hopes. There is a PR war declared on cash, even from quarters who by statutory rules of their own organisations should remain payment technology neutral. Even the more reputable market research studies on the topic show flawed methodology, unrepresentative samples, biased choice of respondents for their studies, surveys designed with leading questions that produces certain wanted results by those who fund the studies.
The number of ATM transactions and inquiries in our business show a very different picture. In the end, you as the business owner or manager decide how you want to be paid, a fact forgotten by those players in the payment industry who want to make you believe that you are powerless to drive your own customers' behaviours in your own business.
(Source: "The Evolution of Cash: An Investigative Study", Sydney: Australian Payments Clearing Association, 2014).
Is it a bit cheeky?
"For the financial services industry to foist a new payment technology on consumers without giving us a chance to opt out?" (Choice, 2015)
"That's what happened when credit card giants Visa and MasterCard launched tap-and-go payWave and PayPass, respectively, starting in about 2009. Some consumers are still miffed at being denied a chance to say no to their credit and debit cards having the 'contactless payments' technology..."
Choice's Andy Kollmorgen has written a very interesting analysis about the powerful commercial interests that are behind the uptake of contactless payment technology in Australia. Is it safe?
Should consumers have the right to opt out of the technology?
These powerful payment players have vested interests in seeing cash disappear as a payment method. Australia is one of the very few developed economies to embrace contacless payments with such enthusiasm. Consumers in countries like the USA, Germany, France, Austria and many other developed countries have been far more skeptical about the benefits of the new payment technology.
One reason for the uptake of contactless payment is due to consumers not having the choice to opt out from the contactless payment technology on their cards. Another reason for the popularity of the contactless payment technology is the absence of direct POS transaction charges to consumers. For the time being, most merchants pass on the cost of card payments to consumers in other ways.
While many consumers believe that there is no cost to their contactless card payments, the reaility is quite different as shown in a December 2018 article on the ABC.
Get in touch
Please complete this form to get in touch
Thank you for contacting us.