4 ms·

This seems counter-intuitive to me. The author argues it's due to hyperinflation from the pre-WW2 era, concluding that "People in countries that suffered bankin

This seems counter-intuitive to me. The author argues it's due to hyperinflation from the pre-WW2 era, concluding that "People in countries that suffered banking crises quite sensibly often prefer to save in cash." If there really is some national memory of that crisis, wouldn't they actually prefer to actually avoid saving in cash? During the hyperinflation period your cash could lose half of its value overnight. This just doesn't make sense.

blowski 9y ago
Perhaps it means that when your money is in a bank account, the bank can refuse to give it back to you until it loses all its value. In cash, you can spend it straight away.
Spooky23 9y ago
No. The institutions become untrustworthy. In a hyperinflation environment your priority is converting cash into assets as quickly as possible.
zmk_ 9y ago
I fully agree, if anything this would be about bank runs. Also it is a cherry picked example, I can cherry pick one too. Poland had a hyperinflation episode in 1920s and another high inflation event in the 1990s; yet card adoption (and adoption of innovations in consumer banking) is among the highest in Europe. The differentiating factor is whether a solution is supported by the merchant. If it is, you will see adoption. Merchants in Germany do not support CCs and limit debit cards, so people do not use them. They do not do that partly because they can get away with it and partly because the fees they are being charged are high (both per transaction and per POS). Naturally there is room for the government to step in here. E.g., said Poland lowered the maximum allowable fee Visa/Mastercard can charge a few years back; along with that went away minimum spending limits on transactions in shops. This will change though as Germany starts moving to a cashless economy as, e.g., Sweden is doing.

4 ms·

This seems counter-intuitive to me. The author argues it's due to hyperinflation from the pre-WW2 era, concluding that "People in countries that suffered bankin

by dvfjsdhgfv 9y ago

blowski 9y ago
Perhaps it means that when your money is in a bank account, the bank can refuse to give it back to you until it loses all its value. In cash, you can spend it straight away.
Spooky23 9y ago
No. The institutions become untrustworthy. In a hyperinflation environment your priority is converting cash into assets as quickly as possible.
zmk_ 9y ago
I fully agree, if anything this would be about bank runs. Also it is a cherry picked example, I can cherry pick one too. Poland had a hyperinflation episode in 1920s and another high inflation event in the 1990s; yet card adoption (and adoption of innovations in consumer banking) is among the highest in Europe. The differentiating factor is whether a solution is supported by the merchant. If it is, you will see adoption. Merchants in Germany do not support CCs and limit debit cards, so people do not use them. They do not do that partly because they can get away with it and partly because the fees they are being charged are high (both per transaction and per POS). Naturally there is room for the government to step in here. E.g., said Poland lowered the maximum allowable fee Visa/Mastercard can charge a few years back; along with that went away minimum spending limits on transactions in shops. This will change though as Germany starts moving to a cashless economy as, e.g., Sweden is doing.