Non-cash payments do not liquidate the grey area, alternatively carry it to another channels

Prof. Jakub Górka and I are talking about myths about the grey zone, about how crime changes in the digital planet and about the request to defend cash.

(Interview is simply a edited and completed version of the podcast “Are you aware?” p. ‘Cash, cards and a grey area. Facts and mythsIt is not known whether or not you are taking advantage of me.

Rafał Górski: Mr. Professor, in his own article You write: "...illegal activities in the grey area and money laundering... are little in cash than could be expected... and most take place in cashless money, cryptocurrency and electronic payment methods."

What is the grey area and what are the top myths about it?

Prof. Jakub Górka: The first story I gotta topple is that cash is the origin of the grey zone. The grey zone, the shadow economy, is simply a legitimate economical activity which deliberately hides its profit from the authorities in order to avoid paying taxes and contributions. An example of activity in the grey area is underselling turnover or income. On the another hand, the black marketplace is illegal per se, that is illegal, and it is, for example, fence, contraband, or drug trafficking.

If I were to mention the factors that are conducive to the improvement of the grey area, I would surely include an individual tendency to respect or circumvent the law, a sense of inconsistency for illegal activities or social consent to practices that are against the rules. The improvement of the grey region is supported by low assurance in the state, as well as excessive burden on entrepreneurs with advanced labour costs and extended and burdensome bureaucracy. Notabene These factors should be reduced for the sake of citizens, as they are in no way a reason for the pride of government and public administration.

The second story is that criminal activities are carried out only in cash. There are many specified activities that do not take place in cash and yet exposure the taxation to losses, specified as handling prices transferred in capital groups, including across borders, to avoid taxation. It is about optimizing transfers between the parent company, for example from an EU country specified as France or Portugal, and its daughter company registered in Poland. This ‘optimisation’ de facto means that this daughter company does not pay any income taxation in Poland.

Another example of illegal activity is the issue of fictitious invoices and the submission of VAT refund applications based on them. Businesses usage taxation carousels, extort funds from grant schemes, reliefs, loans, taxation havens or launder money through trade. These are all practices that origin serious fiscal losses, and in most cases specified crimes are carried out in cash-free money utilizing bank transfers, card payments, and crypto-activisms.

The Association of Entrepreneurs and Employers stated a fewer years ago that in 2016-2020 the T-Mobile corp paid in Poland PLN 31,000 CIT tax, with revenues of over PLN 43 billion...

This is the scale of the losses that our taxation returns. I think that a turnover taxation would be much more favourable from the point of view of the revenues to our Polish state budget. The turnover taxation is taxation on sales revenue, i.e. 1.5% of turnover alternatively of CIT-19, CIT-15 or any another rate.

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Bret Scott in the book “Cloudmoney. Cash, cards, cryptocurrency war on our wallets“ It is worth noting that the German Bundesbank supports the cash, ” he writes. Central Bank employees are mostly discouraged from openly promoting cash, but the Bundesbank frequently print reports that shed favorable light on it. These include studies that undermine the view that cash is mainly utilized in the grey area." delight comment.

Cash may be utilized in a grey area due to its anonymity, but in no case is the cause.

The anonymity of cash is now a very desirable feature.

In a day of constant interference with our privacy by banks, large techs and another entities, the instrument that protects our privacy is on the weight of gold.

Currently, all citizen is treated by companies, as well as by the state as a profiling facility, as a data collection. Therefore, it is so crucial to have a payment instrument that creates specified points of continuity in this process of profiling and analysis. due to the fact that if we usage cash, then these cash transactions are not recorded, they are not recorded in the banking system. It is worth having this choice, it is worth utilizing anonymous cash, even to make certain that not everything is known about us. specified an anonymous payment instrument is an additional safety valve.

No form of money or payment instrument shall be free of fraud.

Yes, cash is besides utilized for illegal transactions in the grey area, but I'd say it's more of a insignificant street crime. street level crime, and alternatively with smaller transactions. However, in this organised, tax, economical crime, which generates the largest fiscal losses, non-cash forms are the dominant instrument.

I frequently mention to the investigation of 3 recognised experts in the area of the grey zone: professors Friedrich Schneider from Austria and Franz Seitz and Hans-Egger Reimers from Germany. Their investigation is based on econometric panel analyses of countries and, interestingly, did not show a correlation between the grey region and the usage of large and tiny denominations in the euro area. They showed dependence on medium-denomination banknotes and only in smaller euro area countries alternatively than in large economies specified as Germany and France.

I like the conclusions these scientists draw. They say yes, cash is utilized in payments in the grey area, but the function of cash in these illegal transactions is little than is commonly expected. Therefore, according to these professors, limiting cash turnover would not be as effective in combating the grey region as is assumed.

On 24 April 2024, Euro-Parliamentarians in Brussels voted against a ban on paying in cash above EUR 10,000, which is to apply from 1 January 2027. Under the fresh rules, sellers will gotta carry out additional client identity verification for transactions exceeding EUR 3000. The rationale for implementing these rules is to combat money laundering and terrorist financing.

Professor, what do you say?

These EU rules are the AML (Anti-Money Laundering) package, the anti-money laundering package. A natural individual will not be able to pay in the store for the goods or services in cash if the value of this transaction exceeds EUR 10,000. Businesses will besides not be able to make a cash payment of more than EUR 10 000. Interestingly, the legislator has provided for the anticipation for individual associate States to set lower transaction thresholds. presently in Poland we already have Article 19 of the Entrepreneurs' Rights, which sets a limit of PLN 15,000 for B2B transactions (between companies) in cash, which is already lower than the EU threshold.

The AML package besides requires stores to prevent money laundering, i.e. the store will identify the client and will most likely besides ask additional questions about the origin of the funds for each transaction, which will amount to more than EUR 3000. The store in question will gotta study in Poland to the General Inspector of Financial Information (GIIF) transactions above EUR 3000, which will rise suspicion.

What is the basis for the seller to measure whether the transaction “is suspicious”?

The seller will identify the client, ask him about the origin of the funds and decide on the basis of any interior procedure whether specified a transaction is worth reporting to the GIF. In practice, it may be that the seller will study each transaction over EUR 3000 in case of an emergency. This request will make an additional burden for the seller as well as for the consumer and will simply discourage cash payments.

So the salesman's gonna ask me how I got 3,000 euros?

Looks like it. 20 years ago I studied in Finland and there was a akin mechanism. Finns who notabene They are celebrated for their non-cash payments, and they were outraged due to the fact that erstwhile they brought more cash to the bank, they were taken to the back and asked where they got the money.

The EU AML Regulation, which will apply from 2027, does not impose a client verification obligation, which brings more cash and deposits it into its bank account. However, with these C2B (Consumer to Business) transactions, i.e. erstwhile we as a consumer pay in a store above EUR 3000, I think that questions about the origin of the cash may be asked.

Europarlamentarians argue that the AML package is simply a form of fight against money laundering and terrorist financing. What do you say?

Political correctness or specified sympathy of reasoning frequently manifests itself in the votes of Euro-Parliamentarians.

Cash's easy to attack, not quite a few its gunmen.

It's always possible to base 1 on specified communes. possibly Euro-Parliamentarians are convinced that cash is mostly liable for the grey region and that it is worth reducing. However, this is simply a misconception.

"The grey region is increasing in Poland, but could have been more so if it had not been for the improvement of non-cash trade". This quote comes from Report of the Institute of Forecasts and economical Analysis of 2023. How will you comment on this quote?

The estimates for the grey area vary according to the origin and scope from 10 to 20% compared to Polish GDP. The IPiAG investigation says 1 thing, but we besides have the GUS, EY, or the planet Economics analytical institute. According to EY estimates, the share of the grey region in the Polish economy has fallen by half since 2000, i.e. the grey region in Poland is not expanding in relation to GDP, but decreasing.

This is influenced by factors specified as: fiscal digitization, the Single Control File, the IT strategy of the Chamber of Clearance, the divided Payment system, the VAT settlement method in which the payment for the invoice is automatically divided by the bank into 2 parts: the net amount goes to the seller's bill, and the VAT to its special, dedicated VAT account, the sealing of the VAT system, the economical situation or the effectiveness of the enforcement of the law. These factors have had a greater impact on the simplification of the grey economy than the non-cash turnover itself. Bringing only cash versus card to the opposition is besides far-reaching simplification. As I mentioned, non-cash payments do not destruct the grey area, alternatively they decision it to another channels.

And who benefits and who loses money and grey region misinformation?

Of course, the disinformation on cash and the grey area is being utilized by those who exert their commercial or political interests.

These entities deliberately identify cash payments with crime and give the incorrect impression that cash is dangerous.

Part of the payment manufacture can gain on specified a simple but of course incorrect narrative: only cashless equals well.

From the bank's point of view, cash is mostly at the expense, due to the fact that this is the asset that does not yield a rate of return that does not make income. You gotta pay for transport, for storing this cash in the vaults. It is not a product that generates specified revenues in banks as, for example, loans. However, wiser bank managers realize that the approach to cash should be somewhat balanced and not viewed as a cost only. Named customers want to pay in cash and at the same time convert any of their money into cashless money, i.e. they usage banking services, but they besides usage cash. Cash has not yet been completely marginalised, so bank managers should see its advantages in the context of their business.

And who loses that misinformation?

We, all consumers and companies, are lost in misinformation or in attacks on cash. All those who want to have a choice of payment methods and value cash for its assets: for being material, that it is independent of electronic infrastructure, that it gives privacy, anonymity, that it offers immediate settlement.

Politicians and public administration, in my opinion, are besides losing money on these attacks, due to the fact that the attention of public administration is being diverted from another crucial money laundering channels.

The Coalition for Non-cash Payments and Micropayments brings together banks, city offices, Polish universities, and even ministries and since 2007 has been working intensively to advance non-cash payments and combat cash. Ours Coalition for Cash was created in 2025 and it is hard for us to break into public debate.

And what's your attitude towards cash fighters?

I was not a associate of this coalition, but I was working to advance non-cash payments due to the fact that I think it is worth supporting the improvement of electronic payment instruments.

However, since 2007, the situation has changed dramatically and present it is not cash-free payments but cash that deserves defence. That is why I am pleased that there are people like you and that the National Bank of Poland can talk in a akin tone, as the German central bank does, and to point out aspects related to cash that encourage us to be more restrained in attacks on this payment instrument and indicate that cash has advantages all the time, and at this point we must defend it, alternatively than attack it.

What is the motivation of politicians to fight cash?

The motivations are most likely different erstwhile it comes to politicians, depending on what kind of politician we're gonna set up. any Euro-Parliamentarians can be manipulated by the banking lobby, and any may believe that cash should be fought and that this will bring the same benefits, including fiscal ones. I would like politicians to look at the problem more broadly. I hope that more balanced, balanced arguments will scope them.

Jerzy Dziemidowicz in an interview “The day you pay cash, that is, the fight against disinformation“ Among the 10 European countries with the lowest share of the black economy in only 2 (Denmark and France) there are limits for cash payments, in the another 8 (Switzerland, Austria, Netherlands, large Britain, Finland, Germany, Iceland, Sweden) there are limits for cash payments. In 10 countries with a advanced share of the unofficial economy, as many as six introduced restrictions on cash payment (Bulgaria, Greece, Poland, Italy, Spain, Portugal)’.

Please comment.

I will callback the investigation of the European Central Bank and the National Bank of Poland. European and Polish citizens proceed to highly value cash and argue the regulation of its position as legal means of payment and as an instrument of thesaurusation, i.e. saving savings. According to a survey by the European Central Bank, as many as 62% of respondents – the remark – by 2 percent points more than in 2022 considered the anticipation of cash payment crucial or very important. In turn, our Polish investigation commissioned by the NBP in May and June 2025 showed that about 1/4 of Poles declare that they like to pay in cash regardless of the amount of the transaction. And erstwhile investigation by the NBP indicates that most Poles are powerfully emotionally connected with national currency and see the Polish banknote as a national symbol.

I would hazard thesis that the introduction of cash payment limits undermines public assurance in anti-money laundering policies, as many see it as excessively invasive. He simply resists, prompts any to act in spite. It is evident from the experience of the countries of confederate Europe that the limits on cash payments have not been so effective.

Professor, what is the scale of fraud utilizing non-cash payments?

According to the Joint study of the European Central Bank and the European Banking Authority of August 2024, the value of fraud in the European economical area by means of non-cash payments, including transfers, direct debits, card payments, cash withdrawals at ATMs, electronic money transactions amounted to EUR 4.3 billion in 2020 and EUR 2 billion in the first half of 2023. The card fraud rate for cards issued in the EEA reached around 0.03% of value in the first half of 2023 and around 0.015% of full transactions. These percentages converted into transactions are immense amounts.

It is worth noting that criminals make increasingly sophisticated ways of stealing money and focus on those payment instruments that supply them with the top financial benefit with minimal effort.

Today, we keep most of the money in banks, and that non-cash money has become the mark of criminals.

When 1 kind of abuse manages to be reduced, for example by strong authentication or tokenization of card transactions, the alleged fraudas on cards are decreasing [unauthorized transactions based on data theft or the usage of a stolen card – ed.], but another forms of attacks are rapidly increasing. The European Commission is presently working on how to defend the client from the alleged "authorised push payment" that involves the consumer being deceived by a criminal transferring money from his payment account to a person's account. Frauds related to this activity are billions of euros or hundreds of millions of zlotys in Poland.

And what is the scale of fraud involving cash payments?

Based on logic: if we have most of the savings accumulated in the bank, and the cash is respective or respective 1000 percapita (per person), even if cash is stolen, the amounts are importantly lower than the amounts of non-cash swindles.

Statistics on cash fraud are not easy available.

For example, they request to be extracted from different categories of crime reported by police. Many cash crimes have very serious consequences, due to the fact that if a criminal robs a individual on the street and takes their cash, it's not just stealing cash, it's besides a robbery that Temida punishes more severely than just stealing money. And for these reasons, due to this ease, and due to the fact that there's more and more non-cash money, crime just migrates to digital space.

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Professor, what question has no 1 always asked you about the subjects we're talking about? What is the answer?

What should be done to effectively prevent cash erosion in its trading function? I am an enthusiast of digital finance, but I value freedom and privacy, and cash is their synonym.

Today, it has become essential to defend the position of cash, and I feel that more and more people and institutions are seeing this. In the Nordic countries, the Netherlands, and following a fresh blackout, the authorities besides encourage citizens to have a certain cash reserve. The authorities of these countries are besides making efforts to keep or, in the case of the Nordic countries, rebuild cash infrastructure.

Frontal attacks on cash are becoming more and more common passe.

Responding to the question of what needs to be done to effectively counter the erosion of cash in its trading function: more decisive action is needed to defend its status.

Firstly, the limits of cash payments should be combated as a non-constitutional solution and as an excessively restrictive economical freedom and civilian liberties.

Secondly, the rules protecting the position of cash as a legal means of payment must be strengthened, which should be mandatory and widely accepted. It is unacceptable for sellers or service providers to explain the refusal to accept cash in the absence of the anticipation to issue the rest, for example from a 50- or 100-gold banknote, due to the fact that in practice this means that cash payments are not accepted. It's not spelled out right now. expressis verbis, therefore, I believe that Article 59ea of the Payment Services Act should be strengthened by imposing sanctions against sellers who do not supply an adequate structure of denominations and thus discourage customers from utilizing cash under the appearance of deficiency of change. It's crucial that those accepting cash payments don't run distant from spending the rest, due to the fact that people are going to resent the cash. For example, children who don't have a bank account yet and want to buy their mom flowers can hear: I'm sorry, I don't have you to spend 50 PLN.

In June 2023 the European Commission presented a proposal for a regulation strengthening the position of cash and the work for traders to accept it. This could be extended to make transaction banknotes, the ones with lower denominations, more easy available at banks’ cash registers and ATMs, due to the fact that usually, erstwhile cash is paid at an ATM, it is besides obtained in higher denominations. In order for cash to function not as a thesaurus, but as a transaction, it is essential to supply adequate access to lower denominations.

Let me remind you that on the Day of Cash Paying on 16 August 2025 we submitted 2 draft laws to president Karol Nawrocki: a task concerning the work to accept cash in parking meters and a task concerning the increase of the payment limit between companies from PLN 15,000 to EUR 10,000.

Thank you for talking to me.