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Comment by derefr | Hacker News Reader

I think they're talking about when merchants insist that you give them cash ("cash only"), not when buyers insist on giving cash. The usual assumption is that if e.g. a street-food cart is cash-only, it's not because they can't accept cards (it's rather trivial nowadays) but rather that 1. they don't want to pay the interchange fees, and more importantly, 2. they want to be able to cook their books when reporting revenue.

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There are businesses that attract people that use cards fraudulently and the business gets flagged demand eventually dropped. Gas stations in less desirable neighborhoods in the US have this issue and some only take cash.

Credit card fraud is not nearly as common in Europe as it is in the US.

Additionally, and specifically in Sweden, the fees that banks charge businesses for handling cash (picking it up and depositing it at the end of each business day) have increased significantly in the last decade or two. This has been a significant factor in driving businesses away from cash - it's just expensive for them to deal with.

Are you sure Europe has less credit card fraud? When is your data from?

The US has a much less secure system specifically because there was much less credit card fraud in the US than in Europe.

Chip and PIN was an attempt to combat the rampant fraud in Europe.

It may be true at this point, I haven’t been tracking recently, but it wasn’t in the past.

Another factor: I'm pretty sure it's more common that people have debit cards than credit cards in Europe, which equals less credit card fraud.

As were discussing here, swedes almost exclusively use online card transactions. Don't see much card fraud because of this.

Huh, interesting cultural difference. I couldn't give a flying fuck whether or not merchants I buy things from do their taxes correctly.

Definitely cultural: Italy has a big tradition of merchants evading taxes, and there have been multiple steps over the year to mandate card payments cause those imply the merchant will pay taxes.

So if you are a law abiding citizen you can easily be pissed off that you get to pay taxes and they don't.

For a few years "we don't take card" was widely interpreted as a strong indicator the merchant would evade taxes, and "I won't go there anymore" was a common reaction from some people. These days it's technically illegal and yet you will still find _some_ shops that only want cash.

>they don’t want to pay interchange fees

That seems totally fair if they can’t pass that cost on to you for using a card. Why should they have to pay to accept your patronage?

A cheaper alternative to cards here is app payment via Swish (approximately like Venmo). Goes straight to the vendor's bank account at a flat rate of the equivalent of USD ~$0.15 per transaction.

Why don’t you pay the transaction fee every time you use your card or whatever then? Why should the merchant foot the bill?

Having a cash register and handling cash costs money too, doesn't it? It's just a cost of doing business.

No one has to pay a transaction fee to accept cash.

And you didn’t answer why you shouldn’t pay that fee.

What do you think happens to the cash at the end of the day?

Managing cash has costs too, they're just harder to quantify: you have to ferry it to a bank, you have increased risk of theft, fraud, and robberies, you need extra time to actually check the register etc.

And then you risk losing business if you don't offer card payments because it's just more convenient for most customers (you may like wise lose some if you don't take cash, but that's a vanishing market).

One big difference is that there's competition between cash handling providers, while there's essentially zero wiggle room for interchange fees.

That's what makes interchange and network fees so much more problematic than acquiring fees. There's very healthy competition between credit card acquirers and payment service providers on both features and price, but in the end, you have to accept whatever card your customer has or there won't be a transaction.

In the EU the authorities have recognized the power of the card networks and introduced price controls on interchange fees in 2015, capping them at 0.2% for debit cards and 0.3% for credit cards.

No, it really doesn't, besides the fixed investment of buying a cash register. The idea of being forced to hand over a percentage of all my earnings to private company is abominable. I pay taxes to the elected government, not to some bank. It's why I only accept checks, ACH transfers or cash as payment, and it saves me 3% of my income a year over taking credit cards.

In the EU fees are capped at around 0.3 % I believe.

And you're mistaken if you think cash is cheaper for most stores. You risk theft (so need to pay for measures against that), you have straight losses from mistakes, have to spend time handling and counting cash, spend time depositing, spend time buying change, etc etc

I’m pretty sure there are fees involved with running a cash register, aren’t there? At least in Sweden, the machine has to be certified, registers with the tax authority and then inspected for re-certification regularly.

Regarding cash, does your bank not charge a fee for depositing cash?

That used to be semi-common for smaller transactions in Sweden but was made illegal. Not sure why, probably to fight tax avoidance.

At this point the cost of handling cash is way higher than handling cards and as no one in Sweden ever uses cash its no longer relevant at all anyway. Now many (maybe even most?) dont accept cash to avoid the cost of handling cash instead.

Note that Europe passed a law that limits interchange fees to something very low by US standards, like $0.20 or 0.05%, so it's not a reasonable excuse.

(The fact that credit card networks continue doing business in Europe proves they're still profitable and the US is getting ripped off by these fees)

Yeah there's that cash only bar in central Stockholm that's cash only. Everyone just "knows" they launder money there. I forget the name of the bar, it's on a barge near Tantolunden. it's the shadiest place I know where you can't barely find any shade!

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