1.) I rarely use cash and
2.) I'm sympathetic to places being able to opt out of dealing with cash if they so choose but
3.) I don't really care for a trend that makes it increasingly difficult to conduct transactions anonymously (as well as making it more difficult for some people to participate)
There are certainly card systems that can be replenished with cash but you don't see them widely in the US--presumably because credit cards are so popular.
Banks don’t like establishing branches in low income areas, and low income people don’t usually have a means of transportation or time to get to a bank.
Most US transit agencies these days want to get out of the payments business (Pasmo and Octopus have to be managed as debit card systems and transit agencies can't afford the overhead), so they're adopting London's second-generation system, where you can pay with contactless bank cards. So we might just skip that intermediate phase entirely.
Sadly, I don't see any possibility of this happening in the current political climate.
Oh, wonderful, so we had it but we got rid of it. :\
It blows my mind that so many people in the US don’t have bank accounts. The ads for alternative banks equally blow my mind. Their selling point is... direct deposit.
It’s a whole alternative world out there of people that take physical checks to stores, pay $3 to cash a check, the. Turn around and pay their electric bill at the same place (probably for another $3). Just get direct deposit and autopay, and your credit will probably improve automagically as well.
Many illegal workers don't have accounts and either can't get them or don't trust banks.
Many of the poor get paid directly in cash for various reasons; you'd have to convince some of them that they need an account.
Then there's the whole criminal enterprise thing, a not inconsequential chunk of the economy.
As cell phones and credit cards become ubiquitous the acquisition of these devices will need to be mandated by the gov. Aka, you can not be barred from getting a phone/bank account/credit card because you do not have a place to live.
And what is a drug - Does alcohol count? I know a guy who's drinking himself to death but has his own house.
Also what do you think of this https://www.spectator.co.uk/2015/05/the-case-for-prescriptio...
"The cost of cash handling can range on average from as low as 4.7% of cash to over 15% of cash depending on the retail segment."
(Hey, Franklin, TN!)
Anyway, here's some more:
"Cash payments are about 7 seconds faster than card payments with PIN entry.
"Cash payments are about 16 seconds faster than card payments with with signature.
"Cash payments up to €50 are cheaper, since the fixed costs for cash payments are on average lower."
"The assertion that cash is inefficient is often based exclusively on cost considerations and a
purely partial-analytical or business perspective (eg Bloching, 2007; Guibourg & Segendorf,
2007). Benefit aspects are not taken into consideration. Moreover, the empirical evidence is by
no means clear-cut. Even in the more business-oriented approaches with regard to costs, cash
payments are not necessarily more expensive than cashless alternatives. In Germany, the cost
per transaction of cash is even lower than that of debit and credit cards. In terms of cost per
turnover, debit cards are cheaper than cash, whereas credit cards are more expensive (Krueger
& Seitz, 2014, Chapter 3; Thiele, 2016). In a study commissioned by the ECB covering several
countries (Schmiedel et al, 2012), the findings did not reveal a uniform picture: in some
countries, cash is the cheapest means of payment, whereas in other countries, cashless payment
instruments are the cheapest."
"We present three case studies that illustrate the welfare implications of substituting one
kind of payment method for another. We find that when all key parties to a transaction are
considered and benefits are added, cash and checks are more costly than many earlier studies
suggest. In general, the shift toward a cashless society appears to be a beneficial one."
[Ok, so I can't find a good summary quote. But it looks interesting. I think it's module 1 of the first link above.]
This is something that always seems to be missed in the discussion of cash vs credit card or other payment systems. Yes, credit cards come with a cost (heavily limited in places like the EU), but so does cash -
- your transactions often take longer with cash
- for a small business, someone has to deposit regularly
- larger businesses require staff and secure transport of cash
- All sizes of business will have various accounting and reconciliation overheads
- You have to maintain a float
For most people who use credit cards a cashless store could be a huge benefit to them as it would likely increase efficiency and perhaps offer lower prices. The benefits to the city would likely be less tax avoidance. I don't see why we would limit innovation just because some people would not be able to participate.
Yes. Going to a bank costs time + money. Having a bank account costs money (and has spiked in price recently). Maintaining good standing with a bank costs time + money. Even not using a bank account, still costs money in America. ("Inactivity fees").
Still costs in time (e.g. get off work to go to bank and open the account) which makes it impossible for some folks working shift-jobs. E.g. the poor.
Still not a good situation, but worse is trying to schedule things like doctors / dentist appointments. Especially if they have to be scheduled weeks / months in advance, before you know what your work schedule for that week would look like.
Do you have some options that have no strings (like minimum balance) attached?
Instead, try local credit unions. As an example where I'm at, Indiana Members Credit Union has a checking account with all the normal perks of a checking account and no fees. And credit unions work together with the major banks to give their members access at most ATMs.
In any capital one branch you can make a deposit/withdrawal with your 360-checking account. If they give you freedom of online-banking it doesn't mean their branches magically become unaccessible to you.
There are technically free bank accounts, but they often require a minimum balance, or have other gotchas. They all require identity information that may not be accessible to certain immigrants. Children also have trouble getting bank accounts.
For someone deeply in debt, a bank account is also unworkable because various legal entities can seize money from the account for the debts.
Worse still is that when I went to the bank to ask if they would limit it to the amount of money that I have rather than letting them overdraft my account, they didn't give me a clear answer, so for all I know, the debt collectors can essentially transfer the debt to the bank where I would be unable to close the account and would start accruing overdraft fees, which would then eventually get put back into collections.
Again, this hasn't happened, but the bank won't tell me whether or not this is possible, saying merely "it depends on the court order".
I think the bigger problem is that if your bank balance is (consistently) below a certain threshold, most banks will charge you a monthly fee.
A lot of prepaid debit and gift cards charge a fee so that’s also not an option. Newer phones with NFC payment technology also tend to cost more.
Outside of bank accounts, credit cards can also be disastrous for people who have never been taught to manage money effectively.
And all of this says nothing about how data collection via cashless payment systems can harm and discriminate against disadvantaged people.
If you have a low income and go to a bank to open an account, they may simply say "no" because you're not going to be a valuable customer.
If you are refused a new account at every bank, you have no recourse via the law. You're just unbanked, and then business models exist to extract money from you to provide extremely limited access to the banking system, using extortionate fees.
The logic behind these are apparently that they’re polishing your coins, and I guess that since you weren’t using your money, the bank decided you abandoned it, and so it’s theirs now.
If there is profit to be made, then there should be other banks (since there are still many competing banks) willing to provide the services for free.
Not to mention they have programs and loans specifically for lower income households.
From the point of view of a company, probably nothing in their eyes.
From a societal point of view poor people already have an uneven playing field when it comes to a fair shot in life so making that worse seems like a bad idea.
Unless for some reason you like a permanent underclass of people stuck where they are for some reason I guess.
I personally don't, social mobility is generally a good thing (not least for the economy as a whole).
My guess is that it generally "discriminates" illegal aliens as banks require valid IDs (which may also NOT be true since you should be able to open an account using your valid foreign passport)
It's an interesting distinction that I only learned about recently, and I'm not sure I agree, but it seems to be the compromise we currently run off of.
That's a myth. From the US Treasury Dept. (https://www.treasury.gov/resource-center/faqs/currency/pages...):
"[31 U.S.C. 5103] means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services."
I'm not sure you have a legal right to do this. I'm pretty sure consuming something that isn't your is actually theft.
> It took another year to build up enough funds to use his debit card regularly.
Once you have an account, is there some kind of barrier to getting a debit card?
Having an account is not enough to safely use a debit card, you also have to build up enough emergency funding to use a debit card. Otherwise, you risk a ~$50/charge for overdrafting, if you happen to be a off (even by as little as one cent).
Note that you as a consumer have very little control over if/when you overdraft, as American banks can legally reorder your transactions outside of real date/time to artificially generate higher overdraft fees than actually happened in the real world.
But, you have to explicitly request this. The so-called "protection" is on by default.
e.g. Wells Fargo currently requires a minimum $1500 daily balance (or direct deposits coming in, or mortgage payment going out- neither of which are applicable here) otherwise they charge $10/month in fees. Add to this the "creative accounting" some banks use to settle debits from day-to-day, and other nuances of ACH (no fraud protection, 5 days to dispute transactions, etc.) that make payment by check or debit card non-trivial for the inexperienced.