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Comment by bruce511 | Hacker News Reader

When you start at the wrong premise, you typically end up in the wrong place.

The premise is that credit cards (visa / Mastercard) is broken. When actually it works really well.

For starters it works everywhere. Online. IRL. In my home country, in foreign lands.

Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards.

Merchants might pay 3%, (and ultimately yes, that's in the price of goods) but checkout "just works". They're in the "get paid" business, not the "teach customer new system" business. They'll accept new payment options (which the POS) just provides. But they don't drive the market.

Fixing Visa doesn't work because the people that matter don't think it's broken.

View on HN

> Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards.

Sellers increase the price by the fee amount, savvy consumers with rewards cards can get back around 80% of that price increase, and regular non-credit-card-with-rewards holding consumers just subsidize the whole thing by paying the extra. It's a tax on people without rewards cards.

Not sure how prevalent this is now, but a few years back I was seeing a lot of "cash price" advertised for stuff that was lower by whatever the merchant didn't have to pay in fees so sometimes cash may not be subsidizing the credit industry.

In a lot of cases there are regulatory or contractual barriers to doing that.

The card issuers used to prohibit it, not been the case in a while though. They used to prohibit having a minimum transaction amount or charging transaction fees to your customer too. It never stopped small merchants though

In the US, not since 2011 since the Dodd Frank act required payment card networks to allow merchants to offer cash and debit card discounts.

https://www.ftc.gov/business-guidance/resources/new-rules-el...

There's no longer a blanket ban, but there are still obstacles:

* Mastercard and Visa don't allow debit card surcharges, even if the transaction is run as "credit".

* American Express only allows surcharges if they also apply to all other forms of card payment. This includes debit cards, which interacts problematically with the previous rule; if you want to do a card surcharge while accepting all three card brands and remaining compliant with all their rules, you have to apply it only to Mastercard and Visa and not American Express, even though American Express is the most expensive.

* Several states still don't allow card surcharges, and others don't allow merchants to profit from surcharging (which makes it hard to advertise a uniform surcharge) or have regulations about how prices have to be listed if a surcharge is going to apply.

Rules like these don't make it impossible to do surcharges while remaining compliant, but they make it significantly harder than it'd otherwise be. I think this is the primary reason why most merchants still don't do them. (Well, that and that their competitors don't, but that could explain either equilibrium.)

A cash and debit card discount is the same as a credit card surcharge, I fail to see how this qualifies as “significantly harder”.

Target, one of the largest retailers, offers a 5% discount for debit. Comcast, Tmobile, Verizon, ATT, Lumen, utilities, governments, and insurance companies also routinely charge extra for credit cards (or discounts for debit/cash).

Daycares charge more for credit card, as do doctors’ offices.

At least half the gas stations I see have long had higher credit cards prices.

Not to mention contractors for physical labor.

The change since 15 years ago is stark. If I wasn’t getting a minimum of 3.5% cash back on my purchases, I would use credit cards a lot less.

Huh, I didn't know that about Target (perhaps because I've lived for years in a state that doesn't allow this, so I can't get the discount where I live).

I did know that recurring utility-type payments, and payments of more than a couple thousand dollars, tend not to accept credit cards or to charge a lot extra for them, presumably because it's not as costly for them to make their users eat the inconvenience of setting up ACH payments. Most merchants can't get away with that. I've also seen it for gasoline but chalked this up to gasoline being an unusually fungible and high-demand commodity.

Do you know how they're handling the American Express problem? I don't think I've noticed a big contraction in how many merchants accept it.

> Huh, I didn't know that about Target (perhaps because I've lived for years in a state that doesn't allow this, so I can't get the discount where I live)

I linked to a website that shows the federal government specifically allowing it. You can definitely get a 5% discount in your states’ Targets for paying with a debit card:

https://www.target.com/circlecard

> Do you know how they're handling the American Express problem? I don't think I've noticed a big contraction in how many merchants accept it.

It’s not a problem. Refer back to the federal legislation that prohibits payment card networks from dictating cash and debit card discounts.

Oh, this is a specific co-branded card, that's a different thing and one I've seen a bunch of places.

It seems pretty uncontroversial on the internet that American Express has this policy, and I can't find anyone alleging that Dodd–Frank prohibits it. There is a class action lawsuit against American Express alleging that the policy is illegal (https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxngqeovx/...), but it makes its argument on antitrust grounds and does not cite Dodd–Frank—which it would surely do if there were a plausible argument that Dodd–Frank prohibits this. I don't know exactly how this squares with the text of the FTC's business-guidance page, but that page is a concise summary and doesn't get into all the details of the law, so my guess is that the situations it applies to are somehow different from what American Express is doing.

It’s not really a co branded card. They send you a Target Redcard you can ignore, but all it does is charge your debit card as usual. There is no credit check.

Your Amex lawsuit link is about Amex prohibiting different discounts based on payment card networks (see #4 at bottom of page 2).

Amex’s contract does not overrule the federal government’s rule that a merchant can offer a discount for debit and cash.

The Supreme Court upheld AmEx’s steering provisions in 2018.

https://en.wikipedia.org/wiki/Ohio_v._American_Express_Co.

Page 10: "Under Amex’s NDPs, the merchant...may not impose a 'parity surcharge' on credit card transactions, meaning a surcharge in which the merchant assesses the same surcharge amount on all credit card brands and does not surcharge debit cards at all."

That page is getting into the weeds, but none of that says a merchant cannot state that cash and debit cards receive an x% or $x discount.

The federal regulations specifically allow discounts, and presumably some lawyers will argue that a surcharge is different from a discount.

Amex is trying to do all it can, but still can’t tell a merchant they cannot advertise a discount for cash/debit.

Handling cash costs money too. Sometimes more than handling cards. But a proportion of customers who like cash are very strongly convinced they are "subsidising" card payments, and might be attracted by pricing like that, so maybe it still ends up being a net gain.

From a percentage perspectice, handling huge amounts of cash should be far more expensive; I know one of the operators over here in my country: If you are a supermarket chain and have three locations in one large street, they charge you for every stop a minimum fee + additional handling costs.

When I suggested pricing like that might work, my point was not that it'd be cheaper. I 100% agree it'd be more expensive. But if it attracts a sufficient amount of additional business from people who want to pay cash it could still be a net gain (assuming those customers are still profitable).

Are you saying that even when I pay for something in cash or using debit, because of the possibility I'd use my credit-card the merchant had +3% their price?

Almost but not exactly, any rational merchant would estimate how much they pay monthly in credit card fees and find a way to add that back to their revenue. For most practical cases, the business is started already after the existence of credit cards, so when modeling revenue in your business plan this should already be baked in and the prices you come up with already cover it.

So it doesn't mean they increase the price of every product by 3%. One guy might charge more just for coffee, another do some other thing. But any extra cost you put on a seller of anything, the rational seller will make that back in sales somehow.

the seller just charges whatever it get can get away with. 3% only has an impact when margins are closer to that percentage

Savvy/corporate sellers are typically concerned with margins so fees do play a role

In particular, that is what happens when costs are imposed industry wide, as with credit card fees.

If the cost is only being paid by one vendor then that vendor can't raise prices or else customers would patronize one that had lower costs and passed on the savings. But if every vendor has to pay 3% then prices are going up 3%, because then the competition has no cost advantage they can pass on and people only stay in business if they're making enough to justify not doing something else. (3% is more than the entire net margin in many industries.)

A rational merchant would know that they are also incurring costs for handling cash, and depending on the size of the business that cost can in fact be higher than the cost of handling cards.

In fact, the low end of cash handling costs for a business will almost always be higher than the card fees alone, but of course there are other costs in managing card payments too, so it's not quite that clear cut.

Cash handling isn't free! You have to pay someone's time to count + reconcile + deposit it, or If you're dealing at any volume, you'll pay an armored car service to collect it. There's inevitably "shrinkage", or else business processes (more time and more overhead) to avoid it.

Cash is king for hiding transactions and avoiding taxes. If that's the situation then I won't say you don't deserve a cut, but for rules-following merchants taking cash isn't any cheaper than paying the credit card fees.

> but for rules-following merchants taking cash isn't any cheaper than paying the credit card fees.

That’s not true at all, particularly for large purchases.

If I go to an electronics and check out with $5000 in electronics, there’s no way that handling cash incurs the same expense to the store as the 3% fee ($150).

Maybe for nickel and dime purchases, but that’s rarely the case.

Even a $50 dinner doesn’t cost the restaurant $1.50 (plus the $0.30 transaction fee) just to handle cash.

You're not factoring in "I won't go somewhere that doesn't take a credit card".

A store that sells $5k electronics is gonna lose a lot of sales if they attempt to save that $150 by only taking cash.

Which is why you take both but make the credit card customer eat the fees. Then many customers will save you (i.e. themselves) the money by paying cash and the ones that insist on using a credit card are free to pay what it actually costs.

Why do I almost never see a cash discount like this in practice? An I shopping in the wrong places? Or does something else prevent it?

In NY, I see it most frequently at gas stations.

Because that’s your subjective experience?

Canada has lots of stores that offer a discount if you pay cash. Many have a minimum purchase amount for credit cards.

The credit card companies hate it for the obvious reason and then the traditional reason was they would impose contractual requirements or get laws passed to prevent companies from offering a cash discount. People have posted here saying this has been reversed by federal rules, but then you're still left with two reasons.

One, inertia. Companies haven't realized they're allowed to do it now. That'll change over time.

Two, there are ways to transfer "cash" digitally without paying the credit card fees (i.e. ACH), and there are reasons to want to use digital payments -- making payments over the internet being a major one -- but ACH is ancient and it needs some kind of modern open standard in order to do things like make a payment request and determine in real-time whether the source account actually exists and has sufficient balance to make the payment. Various attempts to do that are constantly being made and constantly being fought against by Visa et al.

I've sometimes been able to get a cash discount by asking for it. This won't work with corporate places, obviously, but sole-proprietor sorts of shops - like my local car mechanic, and a print shop I used to use occasionally - have been receptive. I think they discounted by ~5% in each case. Did I suspect they're keeping the cash off-book? Of course. Did I care? Not at all. I don't expect their big-business competitors are paying tax, either.

This is a huge pile of uncosted assumptions.

If you take cash it means you have to hold it on site. To be insured you have to demonstrate secure handling for the insurer, which would include security systems and limiting the amount in the safe and register. Which means routine trips to the bank, which also incurs costs.

Like...that could all be true, but the rate merchants tried to ditch ever handling physical money rather suggests the fees were worth it (not to mention all the risk mitigation doesn't cover the increased danger to ones personal safety - walking $5000 to the bank is no fun at all).

Business banking != consumer banking. The bank will charge ~$0.10-$0.50 for that $50 deposit + the wages of the person who goes to the bank to pay it in (minimum $7.25 per hour).

I promise you someone making minimum wage will not be trusted to make deposits! Ask me how I know....

Average cash handling cost is typically estimated in the range of 4%-15%. You're right that there might be individual differences in what it would cost to handle a single transaction, but a store isn't in a position to pick and choose - they handle an aggregate. If your electronics store only handles large transactions, maybe their percentage would be lower, but that's extremely rare. And even so, handling large cash amounts comes with its own costs around security.

> Average cash handling cost is typically estimated in the range of 4%-15%

I think the assumption is they declare only a portion of their cash receipts.

I think that is commonly the reason why some businesses do offer discounts, but note the person above replied to "but for rules-following merchants taking cash isn't any cheaper than paying the credit card fees" which seems to have specifically anticipated exactly that.

Yes, exactly. The business team at my (rules-following) company were ecstatic when municipalities around us began disallowing cash payments during COVID. Taking cash is, for us, directly 2-3% (and actually more, if you count labor, which is difficult to track) more costly than the vig on credit cards.

Handling cash is obviously cheaper in Germany because merchants discourage customers from using their credit cards every time they can.

Still, most consumers don’t care or notice it (we are not most consumers), so this doesn’t refute the original argument.

If I take your money without you noticing it won't affect your immediate behavior, but later on you'll buy less stuff, specially if I keep doing it. If nothing else because you don't have it anymore.

It’s worse on business cards. I negotiated a bank contract for our corporate card program earlier this year and we get 3.5% cash back from purchases. It incentivizes us to pay every vendor invoice by card too as ACH / check actually cost us money.

if merchants pay anywhere between 2% to 3%, how is the bank able to pay 3.5% for purchases to your corp card customers? Simple math says the bank would lose money on this which of course won't be true. What am I missing?

Merchants pay what they’re charged on a transaction by transaction basis. That is unless they have some agreement with Stripe or similar that provides a fixed percentage.

If you get a full merchant account as a business, with IC+ billing or similar, your statement will itemize IC charges on every transaction and it’s based on the type of card the customer used.

If it’s Amex / Discover it might be 5% or more. This is why a lot of merchants are Visa and Mastercard only. If your customer has a cash back card, it will maybe be 4%. If your customer uses a no frills visa bank card, it might be 1.5%.

Across a large population of transactions it usually averages 2-3%. But if you have a B2B where all your transactions are from companies like mine, you’ll likely find it averages above 3%.

Businesses like stripe are betting that 2.9% is above the average they see across a very large population of transactions.

Handling cash costs more on average at least for smaller businesses than typical card fees.

It's typical to estimate the cost of handling cash anywhere from 4% to as high as 15% depending on takings and size of transactions.

As someone with little financial knowledge, I'm curious why that is the case and how those estimates are calculated. I've seen stores offering a discount on cash payments, citing card-related fees as the reason.

Here in Italy the answer would be that you cannot evade taxes if payments are tracked. I imagine that applies elsewhere too.

Cash can be misplaced. Stolen. Needs to be stored securely. Banks often charge fees for depositing large amounts. Security companies charge fees to transport said amounts. Counterfeit bills. Etc.

I kinda wondered about this forever as well. Then one day I was chilling in my local worker-owned cooperative bakery when the Brinks truck came by to do the bakery's cash pickup. Armed driver. Guard waiting next to the truck holding a long gun. Two guys (presumably armed) going into the business to get the cash and take it out to the truck. That's all pretty expensive!

Smaller family-owned businesses will just take cash to the bank - but it's super common for somebody to eventually surveil them long enough to rob them one day as they're transporting the cash to the bank.

It's pricey to handle cash!

Discount on cash IME is because they're not putting transactions through the till (POS) so they can commit [tax] fraud.

Ran a micro business in UK for 15 years, cash cost as much to deposit as card did - employee time (counting, reconciling, making deposit) and bank charges for cash deposits. It also slowed down transaction time (which was almost all IRL).

Fraud done by shop owners is one reason why they might still offer a discount, but also a lot of the time I simply think stores don't actually realise how much it is costing them.

E.g. they might not include staff time and incidental costs around cash transactions that aren't obvious because they're not linked to the individual transactions, such as reconciliation, time spent transporting the cash, costs of depositing the cash, insurance to cover storage of cash.

Also consider that it takes very little theft to tilt the balance, and even a tiny amount of theft by cashiers not putting through all cash transactions can make a big difference.

> they might not include staff time and incidental costs around cash transactions that aren't obvious because they're not linked to the individual transactions, such as reconciliation, time spent transporting the cash, costs of depositing the cash, insurance to cover storage of cash.

Yep. I worked as a supervisor in retail for a number of years and here's a list of cash handling costs that dont exist with card payments:

Making change on each transaction

Counting cash drawers in and out for each employee shift

Preparing daily bank deposits

Going to the bank to make deposits and get new change

Theft (by employees, external theft wasnt a problem for us)

And some businesses (that consumers want) just don't exist because they can't be made to fit the card pricing structure. Ex: journalism (subscriptions only)

If it's ultimately in the price of goods, then it doesn't cost the consumer nothing, no matter how you spin it. It's just cleverly hidden.

I think it's close to impossible to "fix" Visa without government intervention (e.g. limit fees to a fraction of a percent), but I'm still grateful to anyone who tries.

> I think it's close to impossible to "fix" Visa without government intervention (e.g. limit fees to a fraction of a percent), but I'm still grateful to anyone who tries.

This is what Australia is looking at currently: https://www.abc.net.au/news/2025-07-15/rba-credit-debit-merc...

I'm interested to see if that works out, and curious what it means for international cards with lots of perks. I imagine, for example, it wouldn't change anything right away for a Chase Sapphire card issued in the US, but if more countries followed suit there would eventually be a tipping point and card benefits would be reduced.

I guess the issuers all have complex models that take these things into account. In any case, I think it's a good move.

The price is the same if you use cash or card. Really, after reward points, card tends to be even cheaper.

Visa/Mastercard/BNPL/Klarna etc. all have negotiated discounts for consumers, paid for by the merchant.

I'm skeptical that merchants would lower prices (stepping away from $x.98, etc) instead of pocketing the higher margins themselves.

if all customers choose to us cash the merchant could lower price with 3%. If you are the only one paying cash then yes the price will stay the same.

Why would the merchant lower the price by 3% if consumers are willing to pay the current price?

You're right that once prices have gone up, they rarely come back down. But if the price is the same, when you pay cash you're effectively subsidizing credit card reward programs, and lining Visa/Mastercard/issuer pockets.

Same can be said about health insurance: private insurance negotiate lower prices than the non-insured due to collective bargaining.

The incentive for merchants to accept cards for payment is that it'll increase number of sales. And it does. In principle this should even out over all sales.. but cards do make it easier for consumers do purchase stuff, and I'm absolutely sure that I personally spend money way easier with a card than without (not that I spend more than I make, mind). The total number of sales go up.

I haven't used cash in my home country for the last two decades, at least. I mean, CC works even on parking meters when paying half a dollar (equivalent) for a few minutes of parking, and I can use a card in flea markets and even some garage sales.

Oh, I forgot: A lot of shops, restaurants, and other establishments have stopped accepting cash, even if it's illegal to do so (legal tender etc). That's because handling cash costs them MORE than handling credit/debit cards. In other words: It appears that using cards LOWER the costs for the merchant, not the other way around.

EditAdd: I presume a lot of the cost saving is that paying by card is 100% electronic, just tap the card (add the pin code if it's expensive enough), and the transaction goes directly into the shop's account. With cash it's way more cumbersome. Way, way more.

(Mind, there's no such thing as signing by hand anymore. If there were paperworks involved it would be different. But there aren't any, not in Europe and not in Japan anymore either)

> A lot of shops, restaurants, and other establishments have stopped accepting cash, even if it's illegal to do so (legal tender etc).

No. This is a misunderstanding of legal tender.

https://www.federalreserve.gov/faqs/currency_12772.htm

"There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise."

Legal tender only applies to debts. When you go to buy a t-shirt at Target or a burger at McDonalds, you don't owe a debt, and they aren't a creditor.

> egal tender only applies to debts.

I used to think that was true, but try paying parking fines, etc. with pennies. Legal tender has never been challenged in court to my knowledge

> Legal tender has never been challenged in court to my knowledge

It was challenged and upheld, both as against debts before the the legal tender acts were passed and those after, by the Supreme Court in Knox v. Lee (1871).

Yet the US government can refuse payments in cash

https://www.federalregister.gov/documents/2017/10/03/2017-21...

Yes. Because a patent filing fee is not a debt.

(And because government can exempt itself from virtually anything not forbidden by the Constitution. This is why cops can break down your door, but I can't.)

Parking fines aren't debts, and thus, legal tender doesn't apply.

https://www.findlaw.com/legalblogs/seventh-circuit/city-sanc...

> The Seventh Circuit Court of Appeals ruled this week that city-levied fines are not debts under the FDCPA... District courts, for what it's worth, uniformly agree that a fine does not stem from a consensual transaction, and thus is not a debt under the FDCPA.

> a fine does not stem from a consensual transaction, and thus is not a debt under the FDCPA.

Which transactions with the government is "consensual" where it doesn't demand payment up front (like a contractor)?

This goes back to my idea that while legal tender is a nice idea, in practice it means nothing

In the UK the definition of legal tender includes a limit on the use of small denominations.

As I wrote elsewhere: You're seeing this from inside the USA. USA is not the world. What's translated as "Legal tender" when wanting to write in English is just the closest term. That doesn't mean that your local definition of legal tender then applies. Cash, to be specific, must be accepted as payment (with certain limited) exceptions, in my country. And still some places will refuse it. They even accept paying fines now and then because of it.

One thing to consider: cards solve the issue of employees stealing, which is surprisingly common from what I’ve heard especially in businesses with high workers turnover, such as seasonal bars and restaurants.

They also solve the problem of someone coming into the store with a gun and robbing the place for the cash in the register. And for the government, they solve the problem of stores not paying sales tax.

> The incentive for merchants to accept cards for payment is that it'll increase number of sales this is something that ive thought about a lot, because while it is strictly true in the short run it may not be in the long run. For example, i don't have any debt, but i use a credit card for everything. Why? It's become my default to use it.

I wonder if the same thing will happen with BNPL (Klarna, Afterpay). These are higher fee than credit cards (5-7%) because they bring in new customers. But, like with credit cards, savvy customers are starting to see BNPL as interest free loans (aka free money on the float, even better than credit card rewards), and it's possible that they become the new consumer results. Merchants are left holding the bag of paying 6% processing fees for everyone, even people who can afford it.

This is like says the tarrifs are paid by the other countries, not the US citizens.

In reality, there is no competition in the payment systems. Free markets mean competition.

All business costs are either paid for by the VCs or the customer. Even the VCs end up getting paid by the customers in the end.

There might not be robust competition between payment systems, but when I go to a store, I've got options to pay:

Cash, credit (discover is dieing, but amex/mc/visa compete a bit), debit (several networks and all US cards have to be on at least two), I've seen PayPal as an option ocassionally, some merchants take Zelle, FedNow could if a good UX comes around (I don't think many merchants want to give out their routing and account numbers, and it's tedious to input them into my banking app anyway). Some vendors take checks and deposit them later, some take checks and process them immediately, etc.

People respond to incentives though. If merchants charge the same regardless of payment method, I'm going to use a rewards card that costs them more. When they add a line item credit charge, I'll consider cash or debit.

I would be very surprised if Discover is dying. The whole point of Capital One buying them--well, a major point--was to have an alternative to MC/Visa on which they can run debit and credit cards, and so they'll be pushing an expansion of the Discover network rails pretty hard, I'd expect.

> For starters it works everywhere. Online. IRL. In my home country, in foreign lands.

Only if Visa/MC agree with the item being sold though.

Be careful to not get hobbies that some religious pressure group hates. Today sex, maybe tomorrow rock climbing or fixing your own motorcycle.

OP wasn’t defending VISA policies, they were just realistically describing how taking on CC circuits with this premise is a risky approach that tries to fix a problem potential customers don’t have. What you are saying is in a completely different domain. Personally I think you’re right, but the only way to solve that is regulating the payment giants as a public utility, not picking a fight against a business model that is a lot of things, but not broken.

A business mode that relies on duopoly is broken and must be regulated.

I literally said it must be regulated. Depends what you mean by broken: for the business owners it’s not broken. For the users? Sure, but they are not stakeholders in the business. They are stakeholders in the society that an excessively successful business model is affecting negatively, hence: regulation.

So we agree.

Counterpoint: Loads of merchants refuse to accept American Express because the fees are higher. Some merchants have gone to court for the right to offer lower "cash prices" – something Visa/Mastercard oppose because they want those fees hidden.

Clearly, at least some merchants are price-sensitive and would be interested in a lower-fee alternative to Visa/MC.

It sounds like all merchants in the US have been able to offer lower cash prices for over 10 years now. I rarely see it though.

> For starters it works everywhere. Online. IRL. In my home country, in foreign lands.

Haha, if only that were true. I’d say roughly 20% of my purchases are rejected because of a badly tuned fraud algorithm somewhere.

So a 1980s computer is faster at calculating than a person, so why reduce the cost? Or a car is cheaper to maintain than a horse, why reduce the cost?

Let's flip the script. In reality the averaged transaction _cost_ is probably O(0.1%) or lower. Why are we paying more?

Decision makers and regulators have been bribed in many places.

EU has actually solved this with interchange fees for consumers being 0.3% which to me sound reasonably close to that 0.1%.

> Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards.

Ultimately customer pays for everything. Credit card companies just prevent merchants from revealing the costs of using credit cards to customers. Which should be illegal.

> Fixing Visa doesn't work because the people that matter don't think it's broken.

People don't know it's broken because regulator doesn't do their job and lets credit companies police merchants.

Yep you get it Bruce. Unfortunately I confused being a villain (everybody likes to bash visa) with being bad at their jobs and disrupt-able.

Sounds like one place where it's broken is the morality policing. If tech can succeed due to usage in porn, maybe Zenobia can too? Then move to services like onlyfans, then try all the other creators who also have problems with fees (like the revolt when patreon tried to raise them)?

> Secondly it costs the consumer nothing.

I can assure you in Australia, this is -clearly- not true, vendors pass the cost on to the consumer. I can probably choose a random store and prove this.

> The cost goes to the merchant.

And who do you think would pay the merchants costs in this case ?

> Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards.

Just like tariffs, right?

Visa/MC is a +1% income tax on most of the economy.

It isn't - using cards, with fees, is cheaper than cash. I realized that when shops started to refuse cash (even if cash is legal tender and they, by law, _have_ to accept cash). The argument? Cash is too expensive.

how is cash too expensive?? huh?

_Handling_ cash is expensive. I never thought of that until my SO started working in a shop. To and from the bank, with stacks of coins and notes.. and there's presumably much more than that for larger firms. In general I rely my statement on what merchants themselves are saying. Newspapers are writing interviews with merchants who (illegally) have stopped accepting cash, even though it's legal tender. "It's too expensive. It reduces our bottom line." That kind of thing. When I look around I see "Cards only" a lot of places.

> Newspapers are writing interviews with merchants who (illegally) have stopped accepting cash, even though it's legal tender.

That's legal. https://www.federalreserve.gov/faqs/currency_12772.htm

Legal tender applies only to debt/creditor relationships.

The USA is not all the world. The US rules don't apply in other countries. Rules differ. In many countries _businesses_ have to accept legal tender. Including in my own. That's why it's such a big deal when businesses actually still refuse cash.

https://en.wikipedia.org/wiki/Legal_tender

> Legal tender is a form of money that courts of law are required to recognize as satisfactory payment in court for any monetary debt.

A country may separately require businesses to accept legal tender, if they feel like it.

https://en.wikipedia.org/wiki/Legal_tender#Status_by_country would appear to indicate this distinction is very common in the developed world.

Of course cash is expensive, you have to handle it, count it, transport it. Haven't you ever seen those heavily armoured cash delivery vehicles? I mean just think how inefficient cash obviously is in every aspect of how it works compared to modern tech.

Time spent totaling it, transporting it to from bank

Having to buy a register / point of sale which can handle it

Hoping you employees don’t pocket a few bills here and there

Hoping you don’t get robbed

They only use cards because credit cards can allow them to get sales from people who wouldn't have been able to buy the product through debit itself, but they can buy it from credit.., so they are okay with eating 1-2% of costs in the fact that sale might happen and the companies will get 0.5-1% of it to you back as rewards (hopefully) and so there is incentive to buy using credit card for rewards but they might also give incentives of 1-2% if you buy through cash since they aren't eating that 1-2% cost.

And this whole network has now been built in such a way that now even debit costs the same charge just as network fees

Open sourcing this might be a step in good faith and I mean, we have UPI where I live and it has 0 fees and trust me its crazy good. I personally wish that either everybody in the world could use UPI or pixis from brazil.

The argument doesn't hold - if cards were only about getting sales which they otherwise wouldn't get - and the part about "getting sales which they otherwise wouldn't get", is true enough - then there's no reason to refuse cash payments. That's additional sales, right? But the fact is that more and more shops refuse cash payments entirely. "Pay by card or go somewhere else".

I can't comment on this fact of more and more shops refusing for cash payments entirely as I personally have NEVER seen that?

Provide me an article or some proof to this fact for me to comment further as currently we are at an disagreement on this thing which I hope we can turn into meaningful discussion.

Well.. just a quick search (as I won't be talking a walk and photograph all the "cards only" signs I now see in so many places):

https://www.theguardian.com/money/2025/mar/16/uk-high-street...

https://www.dnb.nl/en/general-news/news-2023/some-retail-sec...

https://www.bbc.com/news/articles/c20gevkx8gyo

https://www.aarp.org/money/personal-finance/no-cash-accepted...

https://educaloi.qc.ca/en/legal-news/do-you-have-the-right-t...

https://www.riksbank.se/en-gb/payments--cash/payments-in-swe...

Well I appreciate the effort, might need to look a closer look since my country has UPI and its basically free transactions instantly and even then we are constantly warned by our older generation to always carry cash too as there are places that will still not accept UPI or you would need to go to shop, do upi payment, get cash etc. and I kinda agree, I have seen/heard of even many fights happening because UPI wasn't accepted.

and that is when UPI is almost ubiquitous, I can't imagine a shop saying cards only. I think it might be illegal where I live.

> even if cash is legal tender and they, by law, _have_ to accept cash

this is not true as it is not what "legal tender" means. Legal tender is something that the government must accept as payment, not private enterprise.

> Businesses don’t have to accept cash.[0]

> There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services.[1]

[0]: https://www.accc.gov.au/consumers/buying-products-and-servic...

[1] https://www.federalreserve.gov/faqs/currency_12772.htm

That depends on the country. There are many countries (including my own) where any business must accept certain parts of the cash payment system (around here a taxi doesn't have to accept the highest-value bank note, but the rest cannot be refused). And shops, of course. That's why newspapers bother to write articles about it.

They have to accept cash, huh?

* Cash Payment Method Will No Longer Be Accepted A Notice by the Patent and Trademark Office on 10/03/2017*

https://www.federalregister.gov/documents/2017/10/03/2017-21...

Note that legal tender does apply to private entities when it comes to paying debts, at least in the US. Creditors must accept legal tender, or give up claim to the debt.

It’s true that private businesses can set pretty much any payment terms they want for a transaction that hasn’t yet taken place. But the moment you move to a situation where you owe money, they do have to accept cash.

They don’t have to accept cash in advance. They do have to accept cash for debts, such as when you have already eaten the meal.

That’s an acceptable fee for the consumer protections I receive.

There is another hidden cost: total mass government surveillance of the entire economy, including the ability to arbitrarily veto any transaction or participant for any reason (such as publishing) without trial or even burden of proof.

https://www.wired.com/2010/12/realtime/

People are only okay with this because it hasn’t been visibly abused on a large scale yet.

Imagine Nazi Germany having this sort of access to the private transactions of everyone in an entire country.

The abuses won’t ever be front-page news, either, because they’ll only ever be targeted against tiny fractions of society, and most people won’t be directly affected by their lives being surveilled and their rights being so infringed.

https://wikileaks.org/Banking-Blockade.html

Generally and commonly used payment systems (ie cash) that cannot be centrally censored are the only way to avoid this. Presently that means physical cash, physical precious metals, and cryptocurrency.

The first two are impractical for large-scale use.

> Generally and commonly used payment systems (ie cash) that cannot be centrally censored are the only way to avoid this. Presently that means physical cash, physical precious metals, and cryptocurrency. The first two are impractical for large-scale use.

Tether freezes accounts. Bitcoin gets confiscated. Eth forked when big stakeholders didn't like how the DAO went. And it's a bit hard to take seriously privacy concerns that propose a public transaction ledger as a solution.

(And of the three, only physical cash has actually been proven in large-scale use.)

It costs the consumers. Sometimes indirectly and sometimes directly. I would think that this is the primary motivation to come up with a new scheme.

Credit cards are a huge benefit to customers because of purchase protection, chargebacks, and being able to spend money before you earn it that month. The merchants pay the fees because it gets them sales they wouldn't otherwise get.

It might be one motivation, doesn’t mean it’s a good one as per the original comment if consumers don’t care.

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