
No Shirt, No Swipe, No Service - DoreenMichele
https://slate.com/business/2018/07/cashless-stores-and-restaurants-are-on-the-rise-to-the-delight-of-credit-card-companies.html
======
gringoDan
I use a credit card for 95%+ of my transactions. At the same time, I'm scared
of a cashless future. As the article mentions, cash transactions are one of
the last vestiges of privacy that we have. A future where the US looks like
China, where all of your transactions are visible, is not something I want to
see.

Additionally, cash is an equalizer for the unbanked/underbanked. Financial
institutions take advantage of and punish their least profitable customers.
Those who can barely afford overdraft fees, monthly checking account fees,
etc. are the only ones who are forced to pay them.

Yes, blockchain technologies can solve some of these problems, but there will
always be those who are outside of the banking system, lose/don't have a
smartphone, etc. Greenbacks are tangible to the person standing in line to
cash a paycheck at Western Union - Ethereum isn't.

~~~
lithos
You're afraid of the loss of privacy, then immediately suggest block chain as
a solution to a related problem.

~~~
krageon
It's ridiculous on the face of it (especially as they suggest Ethereum), but
there are in fact blockchains that preserve the anonymity of the people
involved in the transaction. I'm a little sad these distinctions aren't more
well-known.

------
orangechairs
To echo what others have said, cashless systems -- especially in fast food
chains -- are a quick way to discriminate against a whole population of the
underbanked. I was in Dos Toros (burrito chain mentioned early in the article)
about a month ago, and the woman in line ahead of me didn't have a card. She
got so embarrassed at the register despite having ample cash to pay for her
meal. I paid for her with my card, she paid me in cash, and all was fine, but
no one walked away from that experience feeling good about it. It was such a
unnecessary emotional stress on the woman. I feel weird returning to Dos Toros
knowing this policy is creating these experiences for customers.

~~~
ac29
The question to me is, why does this population exist in such great numbers? I
understand not having good credit, but having access to a checking account
with a debit card doesn't seem like it should be insurmountable.

The last checking account I opened just took $5 to open the account
(technically a "membership" fee at a credit union). No any proof of
employment, income, ar assets was needed [0], and I left with a debit card
that day. Total time involvement was maybe 15 minutes.

[0] I just re-checked and all that is needed is SSN, Government ID, and the
initial deposit (as low as $5, can be paid with cash, debit, credit, or check)

~~~
bena
How long ago?

Some banks are doing these Pre-paid-ish cards now. I know Chase has Liquid,
other banks may call it something else. For the most part, it functions mostly
like a debit card backed by an actual checking account. But the requirements
are far lower. They don't give a flying fuck who you are. You can even get
checks to access the funds on the card.

And for like 90% of the time, you'll never realize you don't actually have a
checking account. You won't realize that your money isn't technically backed
by the bank. Then that 10% of the time will make your life inconvenient.

So I'd say that access to a card-based payment method doesn't seem
insurmountable. But an actual checking account could still be out of the reach
of some people.

~~~
patch_collector
I also opened an account at a credit union less than a year ago. $5 was enough
for a checking and saving account, though I had to wait a few days for my
debit card to be mailed. I needed proof of residence and ID, but no proof of
income.

------
jonahhorowitz
One thing that Neuromancer had, but we never got, was credsticks.

I want a fee-free electronic wallet that is anonymous.

Also, we really need a law saying that the credit card companies (and others
in the toolchain) can't use our data for anything but payment processing. I'm
sick of being tracked by my transactions.

~~~
rebuilder
Well, it's easy to write "credsticks" into a novel, but rather hard to
actually implement them. How would they work? The closest thing we have are
probably physical Bitcoins, but there you need to trust the issuer not to have
a copy of the private keys.

------
ams6110
Of course you can rationalize that 3% is a reasonable cost and approximately a
wash compared to the expense of dealing with cash. But if you're a small coffe
house, and sell a $3.00 coffee, and are paying a typical 2.9% + $0.30 per
charge, that $0.30 is _ten percent_ of your sale. That's a huge cost.

Transaction fees need to come way down for plastic to beat cash on small
sales.

~~~
gringoDan
An even more extreme example would be a grocery store, whose overall profit
margins are only 1-3%.

~~~
ac29
Where'd you get that data? I looked up Albertson's and see they have a 43%
gross margin and a 23% net margin:
[https://www.reuters.com/finance/stocks/financial-
highlights/...](https://www.reuters.com/finance/stocks/financial-
highlights/ABSP.WA)

~~~
gringoDan
Your link is to Asseco, a company on the Poland stock exchange. Albertson's
reported a _negative_ net income in its S1 filing [0]

Industry average of net income before taxes and net profit after taxes is 1-3%
[1]

Independent grocers report net profit of 0.98% [2]

[0] [https://www.nasdaq.com/markets/ipos/company/albertsons-
compa...](https://www.nasdaq.com/markets/ipos/company/albertsons-companies-
inc-970028-78908?tab=financials)

[1] [https://www.fmi.org/our-research/supermarket-
facts/grocery-s...](https://www.fmi.org/our-research/supermarket-
facts/grocery-store-chains-net-profit)

[2] [http://www.nationalgrocers.org/docs/default-source/0---
defau...](http://www.nationalgrocers.org/docs/default-source/0---default-
library/2017-independent-grocers-financial-survey-highlights.pdf?sfvrsn=2)

~~~
ac29
You are right - not sure how that happened, but it is too late to edit/delete
my comment.

------
NeedMoreTea
Having seen the FB+Google interpretation of privacy, and the few times Venmo
with their public feed have cropped up here, I'll be one of the last to
abandon cash. I use it for most things that aren't online.

That's despite my whole career being in tech and once thinking such views were
the preserve of the tinfoil hat wearers.

Most of the upsides are for the companies, the potential downsides are for the
consumers. I don't much like that balance for a tiny bit more convenience.

------
mmagin
I'm not sure if I'm more worried about the privacy implications, or that of a
future where a Visa/MC duopoly collects a tax on all retail.

------
zaarn
I don't really understand the american need for a credit card.

In germany, I pay almost everything either in cash or via bank transfer,
usually pull. I got a prepaid card a while ago, mostly to pay for american
services (seriously, I only ever pay to american corporations with it). My
debit card (EC card) is almost universal and directly connected to the bank
account, no credit needed.

CC is barely supported, EC is a lot better in terms of coverage. Even then I
usually apologize when using the card for anything below 100€ or so at my
local supermarket.

I don't see much reason to go CC or EC fully, I always keep some cash in my
wallet, not too much but enough to hold me over for a week. If I need more I
go to the Bank's ATM and get more. Easy.

Cash-free payment would also be fairly illegal, a business must accept cash
payments (though a limit of 50 coins is there, notes are unrestricted) for any
purchase in person (online businesses don't have to IIRC).

~~~
chillacy
In the US, credit card transactions are reversed in case of fraud (no
questions asked, super easy), but if someone lifts your pin and empties your
bank account over debit, you’re on your own. This actually makes it more
dangerous to use debit vs running it as credit.

Also while you don’t want to take on debt you can’t pay, there’s nothing too
complex about debt and credit. Businesses all largely do their accounting like
that, and if you really zoom out, all money is a system of debt and credit:
the $20 note in my pocket is credit from my company, since I gave them my
labor, they owed me. My company in turn was owed by one of its customers for
services my company offered. The customer might have gotten money from their
company, and so on.

~~~
krageon
The reason you think debt is good/acceptable is largely cultural. This
definitely isn't the norm in other parts (or even most of) the world.

~~~
chillacy
Absolutely. I meant to make that point when I said “In the US...” since the
parent poster said they didn’t understand why Americans favor CC over debit
cards. I thus gave the reasoning. Had we in America been given the same given
circumstances as in Germany I’m sure we would be using debit.

------
394549
Relevant: MasterCard mines data for marketers
([https://www.ft.com/content/089f7cd0-16f2-11e2-b1df-00144feab...](https://www.ft.com/content/089f7cd0-16f2-11e2-b1df-00144feabdc0))

> MasterCard is analysing transaction data to help marketers direct targeted
> advertising at consumers, after launching a controversial initiative to make
> money from its vast database of retail purchases.

Using cash is currently the only way to opt out of this kind of tracking.
Being credit card-only is also being anti-consumer-privacy.

------
amluto
I think the federal government should start using FDIC as a stick here. It
could be fairly straightforward: if you want to be an FDIC member, you must
offer basic banking. In particular, you must offer anyone who is legally in
the US a free checking account. The terms must be more or less standardized.
No arbitration clause, no limit on class-action lawsuits, no check deposit
fees, no in-network ATM fees, no under-minimum fees, no overdraft fees. If a
bank wants to participate, it should be required to offer _banking_.

~~~
bena
Eh. They do offer banking. But banks make their money investing your money.

Also, I think "no overdraft fees" is just as wrong as overly punitive
overdraft fees. If there were no overdraft fees, credit cards and small loans
just wouldn't be a thing. Just overdraft your account and treat it as an
interest free loan.

When you overdraft, you are no longer dealing with _your_ money. You're
dealing with someone else's money.

~~~
valleyer
Banks could easily simply reject overdrafts instead of allowing them while
charging fees.

~~~
bena
Not if I write a check. And from what I recall, when you make a purchase, they
don't check against your projected balance at that time, but your actual
balance.

So if I have $100 in my account and a pending debit of $50, if I try to make a
purchase of $60, it'll get approved because I have $100 in my account.

Now, there are potential things it could do, like treat pending debits like
cleared debits. I mean, when I check my balance on my app, it shows the
balance with the pending transactions accounted for.

And that does prevent overdrafts from ATMs and debit cards, but there are
other debits to the account that could cause overdraft.

It's practically a no-win scenario. If I have an automatic payment to my
electric company and I don't have the funds in my account to pay it, I'm
fucked no matter which way you look at it. Either I overdraft or my
electricity gets shut off due to non-payment.

~~~
TheCoelacanth
Banks don't have to accept overdrafts on checks either. That's what happened
when someone says that a check "bounced". The person you wrote the check to
won't be pleased because they don't get their money, but the account won't get
overdrafted.

Allowing overdrafts because of pending debits is also just a decision that the
bank makes. They don't have to do that.

~~~
bena
I mean, when you really look at it, banks aren't really up to speed with the
speed of information these days.

A lot of these things that shouldn't be issues are issues because they're
still operating as if there are still people who are managing most of this and
physical checks and credit slips are being passed around.

~~~
TheCoelacanth
None of these scenarios require them to allow overdrafts. Even operating by
passing physical checks around does not make allowing overdrafts necessary.

Refusing to honor checks drawn against accounts with insufficient funds has
been around for ages, even when everything actually was managed by passing
around physical checks.

------
cannonedhamster
Here's a weird question. Why hasn't the U.S. Government made an electronic
cash platform with zero transaction fees yet? This should be something that
falls under the treasury, it would help cut down on fraud and provide a
backbone for small businesses and large businesses alike. Being able to pay
debts is basic infrastructure for an economy and transaction fees are a giant
tax on small businesses and large businesses alike.

~~~
jonahhorowitz
There is at least a kernel of this idea in a national postal bank.[0]

[0]
[http://www.slate.com/articles/news_and_politics/history/2014...](http://www.slate.com/articles/news_and_politics/history/2014/08/postal_banking_already_worked_in_the_usa_and_it_will_work_again.html)

~~~
Kipters
In Italy the national post service (which also doubles as a bank) offers dirt
cheap Visa Electron debit cards called Postepay (no recurring fee, 5€ una
tantum for the card, 1€ fee everytime you deposit money into the card), and
the minimum age for requesting one is 14. This fostered some competition from
other banks which started to offer products with similar prices and even more
features (like the ability to send or receive wire transfers).

The national student card (which can be used to obtain discounts at museums
and other cultural places) now also doubles up as a Postepay, so now basically
every kid owns a free debit card that can use physically or online as he
wants.

Something like this can really speed up card's adoption while avoiding
discrimination and in fact this is what I've seen since I was a kid and I had
to borrow my dad's card: now all my little cousins own their own little yellow
debit card in their name and even use it often in their daily life.

------
rahimnathwani
Where I live (Beijing, China) is far ahead:

\- Most (or maybe all) beggars accept mobile payment by WeChat and/or AliPay

\- I cannot recall any time in the past year where a shop, fruit stall or
street vendor could not accept mobile payment

\- There is a high-end food court nearby where none of the restaurants accept
cash. If you can't pay by card/mobile, you need to go to a special counter on
the ground floor, and exchange cash for some type of voucher

\- My haircuts cost 40 RMB (about 6 USD). I tried to pay with a 100 RMB note,
expecting a 50 and a 10 in change, of which I would give the 10 back as a tip.
The barber struggled to find the right change, as it's so uncommon for people
to pay with cash. So I paid via WeChat, and handed him some extra cash for a
tip.

~~~
ams6110
My barber takes cash only. It's caught me out a few times. He has a mobile
phone, not sure why he's not set up with Square or something similar I'd think
he'd make up for the costs with more business.

~~~
chickenfries
My barber has a location next to several ATMs. I cannot see imagine a
situation where he would start accepting cards. I never see anyone come in for
a haircut, ask if they take cards, and then walk out and not come back because
they don’t.

------
United857
This article burys the lede -- from the last paragraph:

Take the overdraft fee, a punishment for desperate or careless customers that
netted banks $15 billion in 2016. As many as half of overdraft fees aren’t
assessed at an ATM, where customers can see their balance, but at the point of
sale—debit card transactions at the counters of shops and restaurants. And the
majority of overdraft fees, the Consumer Financial Protection Bureau reported
in 2014, came on transactions of $24 or under. Not people stretching to make a
big purchase, in other words. Just trying to get lunch.

Those fees are a big source of revenue for the banks. Nothing about
convenience for the customer.

~~~
bena
Do they still do the thing where they structure debits to maximize penalties?

Say you have $100 in your account and 5 pending transactions: $6, $12, $1,
$30, and $95. In that chronological order. The bank clears the $95 first, then
the $6 which overdrafts you, then the rest, overdrafting you 3 more times.
Whereas if they processed chronologically, you'd only overdraft the $95.

Regardless, the person whose account it is does bear some responsibility for
overdrafting, even for lunch.

~~~
exegete
My bank actually orders transactions to make it so that I avoid the overdraft
fees. If I get paid one day and also make a debit that would overdraft my
account if the payment didn't clear first, they will place the payment first
then the debit.

~~~
bena
That's good of them. I mean, that's just good customer service and they'll
probably keep you as a customer for far longer by not nickel and diming you at
every chance.

------
classichasclass
I just prefer cash because it's easier to keep me to a weekly budget. And,
because it's weekly, I'm not walking around with a terribly big wad (I'm not
crazy).

The privacy benefits of cash are a bonus as far as I'm concerned.

------
Taniwha
I travel to the US regularly, trying to use a foreign credit card there
(especially to buy gas - what is my zip code?) is a real pain - unlike the
rest of the western world the US is far from being able to go cashless

~~~
reaperducer
_unlike the rest of the western world the US is far from being able to go
cashless_

That's a good thing. As people are learning in other countries like Sweden.

~~~
mcbuilder
It was a little strange, I was in Stockholm for two weeks and would have not
have seen a single paper bill except for the glance I caught of one as a older
man got in an argument with a bar owner, who "made it right" by quickly
handing him back some cash.

------
ddingus
No cash, no sale.

Privacy is a big deal to me. Plus downtime. Cash always works.

Handling it is sometimes a PITA, but I must say we have a long way to go
before electronic systems work well universally.

Ordinary people are confused by them, and there are many janky, ultra cheapo
type readers out there.

For me personally, I leave my mobile unconnected to any payment system. I
don't need or want that.

I will and do use cards, but it is not very often.

~~~
icebraining
I think cash can fail: when they have no change!

~~~
ddingus
Good call. That is a failure mode.

Very glad I agreed "always" needed to be qualified. The crowd here is sharp,
and we benefit mutually from it.

------
bowlich
It feels to me like we're moving away from cards back to cash in the last
decade:

\- Gas stations offering cash discounts

\- Stores requiring minimum purchases for cards

\- Restaurants adding a service fee to use a card

I don't think I every came upon these three items a decade ago, and now they
seem standard.

~~~
bena
Before they were structured as "convenience fees". You could buy with a card,
but they'd charge a small fee that was either a percentage of the total or a
flat rate.

Minimum purchase amounts were way more common when debit cards were becoming a
thing.

Basically, you'll find these things mostly in poorer places nowadays where
even the store/restaurant owners are struggling and those card fees add up.

------
savrajsingh
I noticed the “credit cards only” sign at Dos Toros for the first time
yesterday. One of the things the sign says is cashless allows “more time for
coaching” which I hope means training their employees? Coaching seemed like a
strange word choice.

------
RandyRanderson
Fees rising in 5, 4, 3....

