More businesses are not accepting cash | Hacker News Reader

More businesses are not accepting cash

wsj.com

49 pointsbookofjoe79 comments

A real nightmare occurs when a large number of businesses don't accept cash. As this process proceeds, people who are unbanked or can't get a credit care are now not only locked out of the financial system, but also the monetary system! It hugely centralizes the management of the entire consumer economy in the hands of a few bankers who have no responsibility to the electorate - and there's no escape valve.

I would see this practice immediately banned. If a note is legal tender for all debts public and private, it is an attack on the monetary system to not accept it. I can understand why individual businesses would rather not deal in cash, but we can't allow their narrow interests to dominate the public interest.

EDIT: It does make sense to not accept notes for large transactions (e.g. more than a few hundred dollars), but it's crazy to not be able to buy toilet paper.

>I would see this practice immediately banned.

That's just covering up for a bigger problem. If you've got a lot of people without bank accounts, just make it easier to open a bank account. Here in the UK, you can open an account in minutes on your mobile phone with any photo ID, even if you're not a UK resident. Banks are required by the banking code to offer fee-free accounts regardless of credit history and to accept a wide range of identity documents, including letters from the welfare agency or a homeless hostel.

https://monese.com/

https://www.moneyadviceservice.org.uk/en/articles/basic-bank...

> Here in the UK, you can open an account in minutes on your mobile phone with any photo ID, even if you're not a UK resident.

Is this a relatively new thing? One of the biggest bureaucratic nightmares I’ve ever had was opening an account in the UK.

Closing it was even worse. I emptied it from an ATM then walked in and asked to close it. They agreeed then handed me a fist full of money that I’d already withdrawn from the ATM. I queried what was going on and a months long misery ensued as they seemed to think I was trying to defraud them.

>Is this a relatively new thing?

Yes. In the aftermath of the financial crisis, regulators took the opinion that the retail banking sector had become over-consolidated, with a handful of "too big to fail" players dominating the market. Steps were taken to promote competition and diversity in retail banking, which led to a proliferation of mobile-first entrants - off the top of my head I can name Revolut, Monese, Monzo, Starling and Atom.

These new banks have the benefit of a clean-slate IT infrastructure and culture, so they're genuinely modern. For example, Revolut's business bank customers can control their accounts via a fully-specified API and receive transaction notifications in Slack.

https://www.revolut.com/open-api

https://www.revolut.com/connect-your-apps-to-simplify-work

The problem isn't about how difficult it may be to open an account. The problem is that banks become gatekeepers for the ability to exchange legal tender for goods and services.

I could write an entire essay on the problems this causes if cashless business becomes wideapread. But a few highlights include:

* A positive feedback loop will form due to less cash being accepted => less cash circulating => less reason for businesses to accept cash

* Banks able to de-platform individuals and lock them out from access to life necessities

* Governments likewise able to de-platform individuals as a neat new way to oppress dissidents and undesirables

* The telco backbone of a nation becomes a one stop shop for a decapitating attack. Telco is also one of the first utilities to fail during natural disasters

* Impossible to purchase goods/services without it being logged, surveilled, and used to manipulate you with individualised advertising

* Once cash circulation drops below a critical point, opening or operating a business will not be possible without accepting card payments. That's your plumber, the kid who walks your dog, anyone offering any goods/services. Banks are now in control of who can receive money in addition to who can spend it.

* Ditto for p2p transactions

Anything that threatens the universal acceptability of legal tender should be viewed as a national security threat.

> Anything that threatens the universal acceptability of legal tender should be viewed as a national security threat.

I agree, but it depends on your point of view, I guess. Cash will itself probably be portrayed as a "threat." After all, only drug dealers and people too lazy to lift themselves up to bankable condition need cash. Right?

No-cash is an example of a middleman, or system of middlemen, locking up something for themselves that was once "free."

Water, especially bottled water, can be an example. Gentically modified seeds that produce sterile plants, in addition to some other benefit (Roundup-Ready) is another.

> After all, only drug dealers and people too lazy to lift themselves up to bankable condition need cash. Right?

Even if we accept that line of fallacy, the sum threat of everything that could be done with illegal cash transactions is orders of magnitude smaller than the threat of a cyber attack or natural disaster disabling all exchange of money.

I don't think even the staunchest anti-cash proponents could seriously advocate for building a house of cards out of our monetary system and creating a much bigger problem than what anti-cash purports to solve.

> I don't think even the staunchest anti-cash proponents could seriously advocate for building a house of cards out of our monetary system and creating a much bigger problem than what anti-cash purports to solve.

I don't think anyone who could influence that decision would hesitate for an instant, if it brought them money or power in their lifetime. You really have to apply Kissinger's model of international relations (nations can be relied on to act in their own self-interest) to individual politicians and other wielders of direct power.

> * A positive feedback loop will form due to less cash being accepted => less cash circulating => less reason for businesses to accept cash

This is already happening in Sweden: most people find card or mobile payments more convenient and therefore carry little or no cash with them; more and more shops go cashless; and the cycle continues. New coins and bills were introduced a year or two ago and I still hear people complain that they haven't learned to tell them apart yet because cash is so rarely used.

> The problem is that banks become gatekeepers for the ability to exchange legal tender for goods and services.

Aside from banks, you generally need a debit/credit card to participate, and one of the major providers has already started this with MasterCard's ban on Robert Spencer.

The problem is that most banks in the US are incredibly predatory, especially toward low income customers. Banks love to provide small amount short term loans (honoring NSF funds) at usurious rates. Instead of bouncing a transaction that would overdraw an account by, say, one solitary dollar banks will let it go through then hit the account holder with a $30 NSF fee (which works out to something like 4000% APR or so). For poor people a bank account can look like a huge risk, which can introduce massive expenses in a moment's notice with the slightest mismanagement (or external emergency).

Unfortunately, it's unlikely that this situation will change any time soon in the US, it's just too profitable for the banks and the government is too much in their pocket to actually want to fix the problem.

  > in the UK, you can open an account in minutes on your mobile phone with any photo ID, even if you're not a UK resident.

But u need a house contract/utility bill. I was in this situation recently. Arrived from non EU. Cannot sign a rental agreement as i did not have bank account and could not get bank account as i had no rental agreements!

Why do you need credit card? In EU everyone has debit cards. You pay with your money not with credit.

You dont need them per se they're just convenient because they offer you a one-month interest free loan and numerous consumer protections, plus cash back/rewards.

Unrelated but husband and I stopped at an Indian grocery store to pick up some items for a chicken tikka masala recipe we found on YouTube.

They insisted we pay cash, even though they had a machine to swipe a card.

We don’t carry cash and assumed their card machine was broken. As we apologized and started leaving, they suddenly agreed to accept a credit card.

Presumably the transaction costs per swipe are high, although we were spending about $30 and not 50 cents or something minuscule.

My more cynical side thinks they preferred cash because it’s harder to trace. Credit card transactions are probably automatically reported to the IRS by the payment processing company. Cash... well, unless the IRS sends someone to physically to your location, it’s harder to trace and easy to dodge taxes.

They are charged somewhere around 3%, it certainly adds up for an already extremely thin margin.

Additionally your point about cash being less traceable is also at play, cash income is far less likely to be reported to the IRS.

Add both of those factors in and it is clear to see why cash is preferred by small businesses.

I had a cab driver do this to me once, in 2016 or so. He dropped me off at the destination and told me it’d be $20 or whatever, cash only. I didn’t have cash on me, and said all I had was a card. He demanded that I prove I had no cash. Being a little dumbstruck and just wanting to get away from him I showed my empty wallet and he begrudgingly pulled out a phone with a square reader on it. Left a very sour taste in my mouth about cabs.

It’s no surprise why Uber/Lyft are eating their lunch.

As I mentioned above, transaction fees are a killer on already thin margins. And in some states it's illegal to add a charge for the credit card transaction.

As I understand it, that's often grounds for the merchant account provider to yank your ability to accept cards at all.

In NYC if you even mention the TLC their card machines will start working very quickly.

Lifehack: offer to call the cab company on speakerphone and pay with a credit card over the phone. This usually causes the in-cab CC readers to start working again.

Considering the tax loopholes and deals the super rich get, I actually have no problem with the small mom/pop shops doing what they can to get a break on the fees.

I don’t share your views. There are legitimate services we need tax payer money to fund. Tax loopholes for the super rich are a problem that should be solved, but in my opinion, that doesn’t mean we should just cancel taxation or turn a blind eye to tax evasion.

We should solve the problem with tax loopholes and enforce the system for all.

Mom and pop businesses or small business are very foundational to our economy. Even though individually they’re small, large scale tax evasion would be death by a thousand cuts.

I'm curious why you don't carry cash?

I have friends who don't carry cash simply because they realized that it has been years since they spent any.

I do carry cash, but the only time I recall spending any in Canada in the past couple of years was when I dropped some into a charity donation "hat" -- which I knew I would be doing, so I could easily have brought some along for that purpose rather than carrying cash around all the time.

It's a fair question. I'm not the person to whom you replied but thought I'd contribute my view point.

I don't carry cash because it feels more cumbersome and less speedy than paying with card. With cash, I either have to work out close to exact change or--when I'm out for a leisure day and going to several places--have a mass of coins jangling around at the end. I've noticed that I'm now irrationally irritated watching someone painstakingly count out $12.83 in exact change ahead of me at the till.

It also makes it difficult for me to track where I'm spending. That $60 or $100 might have gone to eating out or a bookstore or some other random place. I'd rather have the card transaction to know and categorize for sure.

Speaking of denominations, I'd rather not carry much money around on me yet ATMs around me only dispense in multiples of $20 and then you get into the fun dance of how to get smaller bills if needed. So many shops now say "no change made."

Finally, I put all of the spending I can (basically everything except mortgage and student loan payments) on cards for the card benefits. Miles, automatic cash back, in-store discounts, etc. Those don't happen when paying by cash. (Yes, I know, the benefits are being paid out of the transaction fees that the merchant is charged plus interest that other people pay. I'm aware that I'm leveraging that and that prices would, possibly, be lower overall if we didn't use cards or didn't have the rewards. If that day comes, I will adapt.)

No comment on the rest of it, but on this:

> I don't carry cash because it feels more cumbersome and less speedy than paying with card. With cash, I either have to work out close to exact change or--when I'm out for a leisure day and going to several places--have a mass of coins jangling around at the end. I've noticed that I'm now irrationally irritated watching someone painstakingly count out $12.83 in exact change ahead of me at the till.

I've actually timed the people in front of me, and the vast majority of the time, cards take nearly twice as long as cash. No idea why, as I would also expect counting out the change to more than make up for that.

(I'm in the US, maybe the systems are different enough to account for this?)

I don’t carry cash because it’s inconvenient. By using a credit card, I don’t need to manage individual dollar bills or change. My wallet is a small card holder that fits unobtrusively in my front pocket.

I have a couple different cards. I use an AMEX cash back card for groceries and general shopping, Amazon, etc. I get 6% cash back up to $600 a year.

For travel and hotels, I have a Chase card that gives me bonus miles, paid for my TSA pre, and some other perks.

I pay off all cards in full each month. There’s never any interest. In return, I don’t have to manage cash and I get cash back and travel points.

There’s literally no downside for me. Paying with cash for things I put on these cards means I’d be leaving money on the table.

Also, I budget through mint. All my spending automatically appears and gets categorized since my cards are linked to my account. There’s never a question of where the money went.

The transaction costs are unfortunately not negligible for small vendors, they don't have the power to negotiate like Walmart et al.

IME vendors simply pass the charge along to consumers these days, esepcially for small purchases.

Specifically, they pass it on to all their customers, not to only those customers using cards (doing so is against the merchant-processor agreements). i.e. those using cards are in effect increasing the price for those not using cards.

in many places in europe there will be a surcharge added depending on the type of card you’re paying with.

And in some places in Europe that is illegal. At least here in Finland adding any hidden fees to a retail list price is illegal (meaning that VAT is already in the sticker price too)

I have never seen that happen anywhere in the EU.

It still happens in UK (some small businesses) but AFAIK [1] it's no longer legal.

It's a massive problem for businesses with lots of small transactions, if you're selling a £2 coffee and the CC processor charges 30p + 5% per transaction. Previously nearly no-one would pay the extra, now you have to cover it; so you make the coffee £2.40 ... but the large retailer with a blanket 3% transaction cost (or whatever) can undercut you by quite a lot.

https://www.theguardian.com/money/2018/jun/17/credit-debit-c...

This was banned across the EU in January (providing both the retailer's and purchaser's banks are in the EU). In the UK they extended it to all payment methods (PayPal etc)

Stripe and Square are the not terribly expensive, we use both, and they're the cost of doing business past 1992.

2.9% plus 30 cents (in the case of Stripe) is pretty darn expensive, your effectively paying 9% in fees on a $5 transaction. Better processors have slightly lower percentages (~2% & $0.05 to $0.10) but they're often a pain to work with and have a variety of hidden booyah fees that drive up the cost (PCI compliance fees, statement fee, requiring a wired internet connection for a credit/debit terminal).

Large chunks of the US still operate primarily in cash to avoid these fees and presumably some taxes, SoCal is a good example of an area where using credit is often discouraged (even Kroger is not accepting Visa!).

Stripe is 2.9% plus 30 cents, which I assume is a bad deal for the vendor if I'm buying a $0.60 bar of chocolate.

Blame reward cards and a lack of regulation on interchange fees. Stripe charge 1.4% for European cards, but 2.9% for non-European cards. In the UK, a brick-and-mortar retailer with fairly modest volumes can pay as little as 0.35% for debit card transactions; factoring in labour costs, it's often cheaper overall to accept cards than cash.

Cash has transaction costs too, and those are already built into business pricing:

1. Time spent by staff counting and reconciling cash after close of business or at the end of a shift

2. Time spent on bank runs or on an armoured car service that picks up your cash and deposits it at the bank

3. Banks actually charge businesses cash-handling fees for both providing and receiving large quantities of coins

4. Safes and other security mechanisms for keeping cash on your premises

5. Higher insurance premiums when you have lots of cash on hand

Businesses that completely eliminate cash also eliminate these costs.

Re 3. our UK bank charges us to deposit any cash not just coinage.

The cash (notes) is deposited by putting it in a machine at the bank. I guess withdrawals of cash are so small now that they want to restrict inputs of cash to avoid their own handling costs.

I don't know why this is downvoted, anyone who has ever worked in retail knows it's true.

Many Indian grocery stores and some Indian restaurants in US carry a board that says minimum $10 or $20 purchase required for credit card. I guess below that amount, they don't make profit after the credit card fees. $30 is high though, never saw in any store before.

In Spain most Chinese Euroshops will when you pay in cash not give you a receipt until you ask and then they will give excuses why you don't need one.

It's good to see some lawmakers siding for the use of cash, which is most unlike the ones in power wanting to curb freedom and increase surveillance through their "war in cash". If all businesses stop accepting cash, we'd live in a much poorer world of sorts.

This is anecdotal: here in Shanghai it's not uncommon that vendors(specifically street-side small vendors) will turn down customers paying with cash payments.

Those that do unwillingly sigh and look for change. Vendors all assume immediately they're going to scan your QR code or you will scan theirs. Even taxis have their QR Codes printed out on their dashboard somewhere. Subway systems and buses all use QR codes.

Recently in the Carrefour, they started implementing POS systems with facial scans for payment.

Funnily, there have even been occasions where foreign friends can't buy themselves quick street food as all the stands refuse to accept their 100 RMB cash for payment(no change, or digital only)

While I understand privacy is a strong concern(especially under our great leader Xi \s) there is no doubt that the convenience of buying and selling here is absolutely great. Sending money to friends is easy and painless. Makes using Zelle, Apple Pay, and especially Venmo feel cumbersome.

Why does Venmo feel cumbersome in comparison? You scan a QR code, type in an amount and send; that sounds like what you're describing no?

When I mentioned cumbersome, I'm referring to these things: transferring cash between personal checking to and from Venmo balance, and the number of people who use Venmo.

While both services offer immediate transfer(within an hour) from balance to bank account, Alipay's is free while Venmo asks for a small fee(or free for same/next day).

Then, population usage. Cheap Hot dog stands in NYC only accept cash. Apple pay if they're trendy.

All Dumpling/bun street stands in Shanghai use Alipay. Everyone in China uses Alipay.

In America I’ve found it to be a "Venmo? Zelle? Cash?" charade when it comes to exchanging cash.

Although don’t get me wrong Venmo has made splitting checks in America easier between friends - but it just feels like I only use Venmo for that purpose(splitting bills between friends) while Alipay I use everywhere.

I realize now cumbersome wasn't the best word to use to differentiate Venmo and Alipay - the better word to describe the differences between these services is "usability". And of course, I should also mention that these two services are geared towards two different services, so its a bit unfair to compare.

Gotcha, that makes sense. Though I work in fintech I'm soundly in the "keep cash alive" camp, cash has so many positives compared to other exchange methods that I think it is imperative that we keep it around.

Is it possible for a foreign traveler to just download the software to his phone assuming there's an English version? Or must you open a Chinese bank account first? If that's the case there's a pretty huge opportunity for someone!

There's a english verison, but as soon as you open any web portal for advanced settings it switches to Chinese. (think account management, etc...)

I believe it's possible to open a bank account in China, aside from this I tell my friends to give me cash and I send them a 'red pocket'/transfer money to their wechat balance

Would definitely be a interesting opportunity helping expats integrate easily into the system

Do you have any link on the carrefour facial recognition please ?

Here's a article(note that's in Chinese)

http://www.sohu.com/a/232337523_610300

Next time I have the opportunity I'll take a picture of it as well, and post it here

thanks

https://imgur.com/a/o8Gkkps Here's a picture of the banner

thanks

This problem can be solved by making it mandatory for banks to accept any customer. I live in a country where the law oblige the bank to open an account for anyone. By law, they can't refuse you.

There is also another solution: A government sponsored debit card. Maybe made and managed by a government owned organisation (like the postal service).

"Rechargeable" prepaid credit cards are also a thing. Essentially all the functionality of a "secured" credit card, with only the set-up requirements of a gift card.

That only solves part of the problem. It doesn't solve the privacy issues, nor the reliability issues (like when there's a communications outage). And there's still the risk of a foreign country putting pressure on the payment processors to deny use of cards to a particular customer or company.

While im sure im not the majority, any place that doesn't accept cash doesn't get my business. Especially considering how good automated cash registers and machines have gotten at reading cash, it isn't like shitty old vending machines that require ideal condition and carefully placed bills. You can basically throw your money at some of them now and they gobble it up even with folded corners and shit and still read it fine.

https://outline.com/MzStTw

Cool, didn't know you own the rights to this WSJ article:

From the Outine.com T&C:

>You represent and warrant that you have the right to grant, to the Company an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose, commercial, advertising, or otherwise, on or in connection with the Site or the promotion thereof, to prepare derivative works of, or incorporate into other works, such User Content, and to grant and authorize sublicenses of the foregoing.

Heh. The T&C is obviously going to "cover their ass", but I seriously wonder what what % of Outline.com's usage in hits is to workaround paywalls. I mostly see links on HN, but that's honestly the only reason I've seen it linked.

The WSJ is free to file a DMCA claim.

No one cares

I'm seeing more places adding a surcharge for credit cards.

What really bugs me is when someone ahead of me in line is using an affinity card. Typing in their phone number. Cash is faster than many of the cloud-based POS systems.

It boggles me that federal law doesn't already prohibit this. What's the point of designating something as legal tender if businesses can refuse to allow a customer to use it?

Legal tender only applies to debts.

Which would include the debt you've incurred after having already received a haircut or a meal, no? Or is that somehow not classified as a debt even though it walks, talks, and looks like a debt?

I was at a truck stop in Wyoming the other day. "Our internet is down." Breakfast was cash only. Scaling your truck was cash only. I see the word "satellite" on a lot of pumps, but my ignorant assumption is that buying fuel is still dependent on a working internet. Or cash.

I didn't fuel there, so I don't know if fueling was affected. But I have been to other truck stops where "our system is down" and I couldn't fuel (I don't carry that much cash, but some do). I had to call my company to get fueling authorized elsewhere.

There are other types of walking-around non-cash payment systems besides credit/debit cards. If you want to go nosing around:

https://duckduckgo.com/?q=trucking+fuel+card&t=lm&ia=web

Of those, my employer uses Comdata for fueling and other expenses: https://en.wikipedia.org/wiki/Comdata

Paying for "lumpers" (a third party loading/unloading service) is done (in our company) with a Comcheck, an actual paper check, that requires using the truck's communication terminal and making a phone call to get authorization. https://duckduckgo.com/?q=comcheck+comdata&t=lm&ia=web

Should government have a cashless infrastructure to avoid there being a base cost to all transactions paid to private (non-domestic) businesses?

The actual cost of a credit card transaction must be 1/1000th of what our business is charged.

As soon as CC charges became hidden Visa/MasterCard decided to say "screw you" to society and double their "tax". They need cutting out of retail.

As someone who have worked in audit, I can see why business would choose not to accept cash considering the amount of fraud taking place. It is much easier for a cashier to take the cash and not issue/re-use receipts. Maybe the transaction fees would be lesser than the probability*amount of cash-related fraud.

I thought one of the main benefits to accepting cash is to underreport revenue for tax purposes.

This makes sense in urban areas. Kids and anyone else without a bank account can walk in to any grocery store and use their cash to purchase one of those loadable prepaid cards.

Those things carry fees.

Unless the grocery store doesn't accept cash.

You can lose money on those cards, if you can’t extract the full value of the card. You are effectively handing the retailer free money in small amounts, which they are totally aware of.

If only there were some alternative digitally native way of transferring value so we could get the benefits of cashless without it downsides.

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