Cash Tracking: You have surveillance instruments in the wallet

Cash is considered an anonymous means of payment. The serial number shows which routes take banknotes. The cash tracking infrastructure is being expanded. They also use German security authorities for investigations.

He’s waiting for his assignment in your wallet. He has been on his way for years and reports his location whenever he is scanned – which happens quite often. It can make your interests and needs understandable, show personal connections and business relationships.

It is a bill, a printed strip of cotton fibers with two letters and a ten-digit number chain in the upper right corner on its back – its unique serial number. An exemplary twentieth perhaps. He is registered in countless positions throughout his life. It runs through machines for tickets, parking tickets, snacks, coffee, cigarettes, photos or gambling, and again and again devices that count money, check and sort. Machines with modern banknote processing modules can track serial numbers.

Even if a person holds the banknote, it is not protected from automated serial number recognition. The revenues of most of the shops are collected daily by money transport companies. And they hunt the money in their cash centers by banknote testing and sorting machines, which can also read serial numbers.

The comprehensive use of automated serial number recognition provides the technical infrastructure for detailed tracking of the travel of banknotes. And there are increasing efforts to store and merge the data that arises. Cash becomes a surveillance instrument.

Law enforcement authorities are already using serial number tracking for investigations. The industry wants to optimize cash logistics. And curious people also track cash as a leisure employment. “Because it’s fun!” says it on a website for passionate euro banknote trackers.

There are a lot of payments that some people prefer to make anonymously: spending on health problems or sexual games, for example, but also donations to political organizations. If the appearance that a high official has lifted off today appears tomorrow in a workstation for sex workers, this can make him extorted. If an unfinished person supports a queer NGO with a broken banknote, it can threaten its existence in some places.

Cash is popular – also due to data protection

More than 80 percent of Germans see an argument for cash payments in data protection. More than two thirds find that cash has a high significance for society. According to the latest survey, over half of all cash payment transactions were still processed in 2023. 395 billion euros bunker people in Germany in cash.

Data protectors warn against a new form of mass surveillance and the immense basic right intervention that potentially means cash tracking. The Bundesbank points out that the protection of privacy for many people is an important advantage of cash. People in Germany have a right to informational self-determination. At the same time, the German central bank itself follows the path of certain banknotes on certain occasions. “It is to be assumed that the series number reading will be established permanently and irreversibly,” she writes in an internal document of 2021, which netzpolitik.org has published through the request for information.

Whoever dives into the world of cash tracking takes money differently. The bills tell stories. In this article we explore how cash industry, law enforcement agencies and central banks are working on tracking cash worldwide. We look at how German police and prosecutors use cash tracking. And we get to know a rather unknown start-up that collects serial numbers at a central node of the cash cycle and sells insights into the database to investigators.

“A promising technology”

The necessary technology to follow the path of a banknote already exists and is used in many countries. The lobbying association of central banks and companies in the cash industry, the International Association of Currency Affairs (IACA), considers cash tracking, referred to as “Cycle-Cash Vis andibility Collaboration”, a promising technology. It should make cash more efficient.

Where the industry sees the future, the award for particularly advanced cash tracking solutions that IACA has awarded at the end of May. It has won the Japanese group Glory Ltd with a number of projects in Europe where banks and money transport companies record serial numbers and are automatically searched for numbers involved in criminal actions.

The company also developed Kibango, a software for analysis and management of serial numbers. It can be imported serial number search lists. Any banknote that is removed from an ATM can be tracked, according to the company’s advertising material. Such software triggers an alarm when our sample-twenties is listed on a search list as soon as it is scanned somewhere.

These states track cash already very accurately

In China, ATMs must assign the serial number of each banknote they pay to an account. That’s how it’s clear who brought him into circulation. Some devices even record biometric data of the person withdrawing.

In South Africa, the central bank operates a real-time tracking of cash movements, according to Pearl Kgalegi, head of currency management there, on an IACA meeting. Information from ATMs would be collected in a central database and shared with security authorities. Since this was done, there would be more arrests, for example, after automatic bankruptcies.

The Canadian Central Bank shall conduct a database with data to all Canadian banknotes in circulation in order to detect signs of wear. The Bank of Israel also has a banknote database.

In the USA, a merger of 10,800 US criminal prosecution authorities, called Regional Information Sharing Systems (RISS), operates a network of money-counting machines and a database in which the collected bank notes are stored with photos and serial numbers. Investigators of participating authorities can search this database. In Hawaii, a drug wholesaler had been arrested after having pursued money that had been confiscated, registered and handed out by a customer, such a RISS brochure.

German security authorities also use registered banknotes as an investigative instrument. And just there are aspirations to raise their cash tracking to a whole new level.

These crimes are followed by the German police with cash tracking

The German police have used serial numbers of cash tickets to track cash flows at the latest since the 70s. This can look like this, for example: A human being is kidnapped, the kidnappers make a ransom claim. But before the money is handed over in the suitcase, policemen capture the serial numbers of the bills to be handed over in a police database. In this database, they also note series numbers of banknotes that were exploited for cash transporters in the case of automatic bankruptcies or over-precipitations. If, for example, large amounts of cash are incurred at a border crossing or at a home search, the police or the customs will check whether there are any bills to be sought. Thus, depending on where the money reappears, they can draw conclusions about the perpetrators.

The serial numbers are also linked to people in the police database. “The link between different information categories is possible in the police information network, including personal data,” writes the Bremen police. Parallel to the storage in the national database there is also a flag storage in the Schengen Information System, in which banknote series numbers can also be searched across Europe.

That is, police-known bills circulate out there. And it can be that you have one of them in your wallet.

The investigators do not seem to like to talk about this tool. BKA and regional police refer to tactical reasons from which they should not provide information. At the end of May, the Hamburg police even demanded a corresponding parliamentary request from Deniz Celik. But from the few that the police authorities then replied, it can be seen that and how banknote series numbers are used for investigations.

The police of Thuringia writes: “In the pursuit of money laundering, the knowledge of serial numbers can help to trace illegal cash flows and identify the persons or organisations involved.” As an example, the Bavarian police call terrorism financing, where cash tracking can explain “cash flows or their origin”. The police of other federal states confirm that serial numbers of banknotes are recorded and searched for investigations in different crime areas.

So far, the authorities have to hope that the money bills you are looking for will eventually come up with police or customs control. The chance is relatively small. For this reason, investigators regularly ask the Bundesbank whether it has met a certain bill. This is due to an internal study of 2020, which netzpolitik.org has made public by requesting information. At the time, the Bundesbank tested whether it could process comprehensive serial numbers, also to meet the investigators. She ultimately decided against it. But the investigators can now search for the bills in another database. They may even be connected to a kind of real-time recording of the German cash circuit.

“We listen to cash”

Gerrit Stehle, Managing Director of Elephant & Castle IP GmbH, wants to raise the regulatory cash tracking in Germany to a new level. Stehle offers a stable, automated mass balance with circulating banknote series numbers. An interface in the machine room of the cash infrastructure.

His company gets banknote series numbers with location and time of collection from one of the money transport companies operating in Germany. The money transporters are central points in the cash cycle – most of the bills come by regularly. Gerrit Stehle researches security authorities as an expert in this database. The serial numbers of the notes, whose stories he traces for authorities, are also stored in his system. His company already works with several German prosecutors and also with security authorities from other countries, he says.

“Our technology enables us to trace the history of banknotes at the touch of a button,” says Standle. It was possible to find out which bills were like many times in circulation, which have disappeared or which have left the country. “We use the data analysis to develop a deep understanding of the movements of cash and identify cash flows that may have suspicious patterns. “We’re laughing at cash,” he says. He has been working on the project for seven years, and now 15 people are involved.

The Cybercrime Public Prosecutor of North Rhine-Westphalia (ZAC NRW) has tested the system and presented it in an online training specialist doctors from prosecutors in the areas of organised crime, fraud and corruption. The ZAC NRW also gives a money counting machine that reads serial numbers and offers help in data collection. ZAC-NRW leader Markus Hartmann says that the database is a “instrument used in a manageable number of cases”.

With the serial number registration, Stehle and his partner company rely on a certain money counting device from the manufacturer Glory Ltd from Japan, which is the most reliable. The information obtained shall be communicated to the investigating authorities in the form of an expert opinion. They could then compare the data with the statements of accused persons and expose inconsistencies or confirm admissions. “An example from practice: In one case, a person claimed that the money was fresh from the bank, but through our analysis we were able to prove that the cash was already much older,” says Stehle.

Authorities should get a direct interface

If you prefer to connect to your cash monitoring network, you would like to add further control points. “Money Counters are already widespread, such as in the back office of supermarkets, which offers a significant potential. If series numbers of banknotes were systematically recorded, overages on older sections of the population, money transporters, banking machines or retail stores could lose significantly attractiveness. ‘

In doing so, Standle sees the danger. The possibility of carrying out anonymous transactions “is a fundamental pillar of freedom,” he says. But he also sees the shadow side: cash can be abused to support illegal activities.

The aim is to make its system directly accessible to investigators via paid software licenses. No way over the expert. “Using a user-friendly interface, they could then connect to the 24/7 system and perform the corresponding evaluations independently,” says Standle.

The value transport company from which the data originates does not receive any money. “The company has the advantage that costs can be reduced because there are tending to be fewer attacks and that retailers and banks can offer the use of this new technology,” says Stehle. Which one of the companies is working with him, he doesn’t want to betray.

The collected data, with copies in multiple locations, in a cloud developed in a cooperation with Google and Telekom, says Stehle. They are also protected from unauthorized access by US security authorities.

How sensitive are the data?

Right to privacy, Stehle does not see any problems. “The data are not subject to data protection. We do not collect any personal data from citizens,” he says. The GDPR only protects personal data – i.e. those relating to a directly or indirectly identifiable person. A lot of other data is not included, for example, weather records. But do data on cash flows really have as little to do with individual persons, such as wind power?

Luke Hoß, left-wing member of the Bundestag, sees a threat to privacy in cash tracking: “A comprehensive tracking of cash serial numbers would allow profound insights into the private life of people. Not only the passage to the baker, but also the journey to a clinic for abortions would be comprehensible.” The right to privacy should not be further restricted by reference to security aspects. “In the event of a seizure of authoritarian parties such as the AfD, there is a risk that the processes involved will lead to persecution, even if they are legal according to the current legal situation,” he says.

Although Gerrit is talking about “sach data”, he nevertheless shows understanding that the data is not completely harmless. “You have a certain potency, such information should not be in private hands,” he says. That is why he only offers his services to government agencies. In part, there would already be interfaces between police case-handling tools and its system. “Our tools upload our data into their tools,” he says.

An international patent, which he has registered in 2018, will show what future standing can imagine. He calls it the “nucleus of the project”. In it, Stehle describes a machine that accepts cash and by means of the serial numbers on the bills recognizes whether this money has been reported stolen or has been transferred as part of a ransom extortion. He should be able to automatically notify police or security services in the case of appropriate finds. And at gas stations, according to the patent, ticket machines could automatically initiate the storage of the appropriate video images at a fund of money sought.

Customs union chief demands comprehensive cash tracking

Frank Buckenhofer, chairman of the police union in customs, is a dedicated advocate of cash tracking technology. ‘Banks and also money-curing services shall record the numbers of banknotes and their temporally local allocation. It would be helpful if these data were merged and made available to the police and customs authorities,” he says. The data adds a relatively dense network of important information on the way and origin of cash. “And because the mere numbers are not personal data, data protection does not matter,” he says. The data protection officer of Schleswig-Holstein sees this differently – more about it.

If large amounts of cash were found by police and customs authorities, Buckenhofer’s hope would be able to identify contradictions in the statements with the aid of registered serial numbers. “If, for example, someone at the border with a million euros of cash or more, what happens again and again, he can tell the officials every story. For example, the fact that it is “apart from the grandma”, says Buckenhofer. If, however, bills were identified with a money-counting machine, which were still in many different ATMs, in gas stations or supermarkets in the last 48 hours, then the history of the money courier collapses. “So we urgently need these data, otherwise people can fill us with the cough. ‘

With the technology, former ransom and money can also be traced from cracked ATMs. For example, the search for suspects can be intensified in regions where searched banknotes appear. “The systematic collection of banknotes in a database allows a whole range of uses for the criminalistic work of customs and police,” says Buckenhofer. He would like to have laws on cash tracking and a private-sector serial number database that can access customs and police, tax finance and money laundering authorities online.

Data protection officer in custody

Marit Hansen, State Commissioner for Data Protection Schleswig-Holstein, sees comprehensive cash tracking critical. She says: “If serial numbers are stored with time and place of collection and this data is collected more and more granularly, you lose the anonymity of the cash.” It could be problematic, even if the collection is based on legitimate interests. “In the overall view, there is a risk that the individual data will give a personal reference. From a certain threshold, for example, location data could be derived from persons. It was also possible to find out who is interested in what,” she says.

Through comprehensive cash tracking, not only risks for individuals, but also for business secrets and possibly even for internal security, says Hansen. Thus, for example, secretly usable information about safety-relevant persons could be obtained.

Hansen compares the serial numbers with the printer IDs, so-called Yellow Dots, which are contained in color prints. “These are only technical data and yet they can be used, for example, to identify whistleblowers. ‘

Hansen considers it important that people have a truly anonymous payment option. Personal or even intimate details can be found from the notes of payment: more or less healthy diet, addictions, love. “These are information that others do nothing. Here people have the legitimate interest not to leave traces,” she says.

In a further part of this research, we pursue the life of a banknote from print to shredder and see where serial numbers are already registered everywhere. The round trip in the cash cycle clearly shows how the imminent networking of the data points would deanonymize the cash.

Martin Schwarzbeck

Martin has been editor at netzpolitik.org since 2024. He studied sociology, worked as a journalist for numerous media, from ARD to taz, and was recently a long editor at Berliner Stadtmagazinen, where he often took up digital topics. Martin is interested in power structures and relations between people and states and people and corporations. A focus is on techniques and systems of monitoring, whether from state organs or companies.