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As cashless stores grow, so does the backlash (detroitnews.com)
33 points by Breadmaker 3 days ago | hide | past | web | favorite | 78 comments





On the one hand,

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.


I agree, and I’m also still not sure how I feel about moving the entirety of our consumer economy into the domain of just a few major card processors. While I personally haven’t regularly used cash in years, there’s something comforting in it being an option, even if I don’t use it – and yet, of course, by everyone doing the same, that’s how cash gets phased out.

Are you talking about prepaid debit cards? Those have lots of fees and such; as someone who used to rely on them, they’re helpful if you absolutely need it but not easy or painless.

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.


No, I'm talking about something like Pasmo cards, which are widely used in Japan for all sorts of things not limited to transit. https://www.pasmo.co.jp/en/buy/

Pasmo and Octopus(Hong Kong)-type systems only gained massive adoption because they were a valid form of payment on widely used transit networks. The US doesn't have very many of those.

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.


To me, the obvious solution here is to have a government-run, cash-free payment system that's explicitly designed to be accessible to all citizens. Let people deposit money at the DMV or some such, and provide debit cards to be used against their balance. Just provide what's strictly necessary—the goal isn't to replace private banks.

Sadly, I don't see any possibility of this happening in the current political climate.


I agree. Most Americans are proposing this as "Postal Banking", as in a default government-run non-profit bank built into every USPS Post Office, that accepts all citizens.

http://www.campaignforpostalbanking.org/


Postal banks are a thing. They work fine, and exist next to private banks, all over the world.

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


> In the United States, the United States Postal Savings System was established in 1911 under the Act of June 25, 1910 (36 Stat. 814). It was discontinued by the Act of March 28, 1966 (80 Stat. 92).

Oh, wonderful, so we had it but we got rid of it. :\


Yes, this is the obvious solution for a society's infrastructure needs, which transferring funds from one person to another surely qualifies.

They do something similar to this now with social security and other gov payouts. Someone I know has an AMEX blue card or something like that where money is deposited to.

The problem here isn’t that the store doesn’t take cash, it’s that these people don’t have a bank. If you want to pass a regulation, it’s offer fee-less checking accounts with no minimum balance. This isn’t some crazy thing. It’s literally a product every bank used to offer, until very recently.

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.


True...ish.

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.


I’m not really sure any of this actually explains a majority of the unbanked. Sure, it explains why people engaged in illicit trade don’t use a bank, but I find it hard to believe that is a sufficient explanation, especially when compared to lack of identification, perceptions of banks, and perhaps lack viable products (eg A checking account with “$25 maintenance fee waved if you keep a balance of $500 or more” is out of reach for the paycheck to paycheck crowd.)

During the 2017 Tubbs fire in Santa Rosa virtually all the stores in West Sonoma went cash only. I pulled out maybe 300 bucks when I drove up to check on my property and spent 3-4 days buying everything with cash. Came back to work with maybe 150$ in my pocket and was shocked how many of the places in downtown SF didn't accept cash. It was a real eye-opener.

Cashless society will have real repercussions for the lower rungs of the economic ladder. As it is I ask myself how do I give money to homeless people when I'm not carrying cash? How do people without phones or cards interact with no cash merchants?

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.


Don't give money to homeless people, please. The homeless who need it get their money from services that help them get back on their feet. The degenerate drug addicts who plague the city need to stop getting cash from people.

I am very uncomfortable with your presumptive use of 'degenerate' here. Are you equating addicts with degeneracy, and what comprises degeneracy in your view?

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...


I'm sorry that makes you feel uncomfortable. I view degeneracy as the moral decay that causes the societal and familial ties to dissipate, as well as the inability for a local or state government to manage its people, that results in feces and tents littering my street from broken humans unable to take care of themselves.

Crazy idea: maybe feces and tents are littering your street because no one's helping them, rather than 'degeneracy'.

Obviously it's both, right? Although "help" is an interesting term. It can span a lot of policies, some that make sense, others that don't. Meanwhile the degeneration of familial support networks and moral codes plays a part in a more atomized society, where falling into drug addiction with no non-state help becomes increasingly common.

In China you'd see beggars with a WeChat QR code in front of them.

What's the incentive for a business going cashless? I can see some upsides to it like eliminating the risk of employee theft but the intermediaries take a cut.

I imagine that the labor and security required to handle cash is costly. This is the best number I could find:

"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."

http://www.ihlservices.com/product/costofcash/


I hate to cast aspersions on the source, but... "IHL Group is a global research and advisory firm specializing in technologies for the retail and hospitality industries. The company, based in Franklin, Tenn., generates timely data reports, offers advisory services and serves as the leading retail technology spokesperson for industry and vendor events."

(Hey, Franklin, TN!)

Anyway, here's some more:

https://www.cashmatters.org/blog/paying-with-cash-costs-less...

"Key findings

"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."

https://www.researchgate.net/publication/321386231_Costs_and...

"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."

https://www.researchgate.net/publication/265496400_The_Econo...

"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."

https://www.bundesbank.de/resource/blob/710096/4f27e9114ce3a...

[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.]


Most of the cashless places I see are also contactless-only, which is certainly going to be faster, if that is a concern.

Less of a robbery target as well. And don't need to do runs to the bank, at least nearly as much. Yes, there are intermediaries but some businesses apparently think it's a reasonable tradeoff.

Cash handling has costs. Not just risks.

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
All this stuff takes time and pushes up staffing and other costs. I have no idea if it's comparable to the usual credit card cut, bit it always sticks in my craw when cash customers complain that they should get lower prices because their purchase doesn't involve fees.

The elimination of employee theft and getting robbed at gunpoint. Most people already pay with cards.

Not every store or service has to serve everyone.

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.


Why does it discriminate against poor people? Do bank accounts cost money in america?

> Do bank accounts cost money in america?

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").

https://www.cnbc.com/2017/07/21/the-crazy-growth-of-bank-fee...

https://www.forbes.com/sites/learnvest/2018/04/05/americans-...


Hm. I live in Iowa, and my bank account is free.

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.


Most of the working poor work one or more part time / shift jobs. If it is shift work, that means there are times when they aren't scheduled during banking hours. People that are poor that work 9-5, would have Saturday open to them, and many banks have friday hours till 7:00 pm.

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.


No. If you follow your agreement, it costs basically nothing. It's true for every mutual transaction (not only for banks). Also no-one forcing you to create accounts in ONE particular bank, you can shop around. there are plenty of options with minimal to no fees accounts.

> there are plenty of options with minimal to no fees accounts.

Do you have some options that have no strings (like minimum balance) attached?


Other people are going to suggest online banks, which are excellent, but you can't deposit/withdraw cash easily to those, which is the main purpose poorer people have for a bank account.

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.


I wasn't going to, I suggested below. Also it's capital one.

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.


I didn't intend to put down your suggestion, like I said, online banks are great, but there isn't a capitol one, ally, or discover bank in my state. So for people who use cash, a credit union is an excellent choice.

Ironically, people who are being “discriminated” against with progressive, cashless initiatives, live in states where capital one branches and ATMs are on every corner.

Basic DDG search, and there are plenty of others: https://www.capitalone.com/bank/checking-accounts/online-che...

7 percent of Americans are 'unbanked'.

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.


Yeah, that last point is a constant fear for me. I don't have a lot of money, but it would be highly damaging if they decided to make good on their court ruling that says they can take my money.

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".


Going to the bank costs something, if not the opportunity cost lost. When you are poor, every opportunity or cost matters much more. Most banks require some form of ID or address verification, which again could require travel somewhere. Finally, even if you assume the most seamless, easy to sign up online-only bank, you are assuming a stable, reliable way to access the internet, which again, can be issue if you are poor.

Paying by cash has an opportunity cost too, over the course of doing it many times.

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.


Before cashless stores, what was the opportunity cost of paying by cash?

You have to spend time getting cash out of your wallet and counting your change. The time adds up.

You also have to spend time putting in our card, then your pin, then signing something, all the while waiting on their slow connection on each step. IMO, it's faster to use cash in most cases.

Going to the bank takes time, fuel, etc., which someone working two jobs to feed their family may not be able to afford and many banks do charge fees for having a balance below a certain amount or not having so many direct deposits.

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.


It's also about the principle of not living in a world where having a relationship with a privately run (for profit!) financial institution is necessary to participate in society, when the government prints and issues perfectly good currency.

You could simply choose to do your banking at a not-for-profit credit union and avoid the relationship with the for-profit financial institution.

Americans are not guaranteed basic backing services.

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.


citation? Not my experience. Heck, even kids can open a bank account.

My grandmother wanted to deposit $200K in accounts at different banks and they wouldn't allow her to open a basic checking account because she had no credit history. She and my grandfather had never gotten a loan in their lives.

Anecdotally, a bank once refused to open accounts for my kids, so I later researched the situation and found that there was absolutely nothing I could do about it.

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.


No, but pre-requisites to bank accounts do, like permanent addresses.

Maybe it's my view as a non-Chicagoan but when I was there recently and had to buy a Ventra card (for using the El trains etc), I was pleasantly suprised to find out it was also a pre-paid Mastercard. To me, means that those who are otherwise unable to access banking services, for example those without a fixed address, can still use online payment services. I was impressed but not sure if that was the city's intent?

Sometimes. “Maintenance” fees. “Inactivity” 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.


Doing business with someone, especially in a heavily regulated industry like banking, can involve lots time spent on customer service. It makes sense to me that some people's funds aren't worth it due to the lack of interest they generate versus the cost of providing customer service and additional liability.

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.


If your bank is charging you those kinds of fees it’s time to get a new bank. My credit union doesn’t charge any fees and to keep it open you need $5 in savings. Most of the time they pay me some small amount for my savings.

Not to mention they have programs and loans specifically for lower income households.

yreg 3 days ago [flagged]

What's the problem with a company "discriminating" poor people? The case could be made that any company providing services for money is discriminating against the poor.

A single cashless store? Not a problem. Every store and service in a town/city being cashless? That's a problem because even though they are individually private institutions, together they effectively lock someone out of participating in society.

> What's the problem with a company "discriminating" poor people?

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).


Is Tesla evil for discriminating against the poor?

The proper way to discriminate is to require membership with varying and/or vague requirements to maintain plausible deniability. This is a bit more difficult to implement for regular retail type establishments, but requiring membership to the electronic banking system made it easy.

They don't. Well, technically some require min balance to avoid fees but generally there are a lot of free options (as long as you don't go into overdraft).

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)


“Legal tender for all debts public and private” used to mean something...

As Chris2048 said, I believe the law draws a distinction between buying something and paying a debt. I've heard that, for instance, you can always use cash at a sit down resturant where you pay at the end because that's paying a debt, but if you order the food (or whatever) up front that's not a debt yet, so they don't have to accept cash.

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.


> “Legal tender for all debts public and private” used to mean something...

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."


Buying a taco isn't repaying a debt..

To get the fully nuanced picture: -If you wander around to a grocery store bakery, and eat one of the donuts before getting to checkout, you have the right to settle your debt with cash. -Otherwise, the store can force you to pay with their preferred method, or else will return the merchandise to the shelves.

> and eat one of the donuts before getting to checkout

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.


Yeah, that's a good point. I mostly wanted to convey a payment after use of the product or service. A better example might be paying your mechanic after he finishes fixing your car.

Can someone explain to me:

> 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?


Technically, there's no barrier. But practically speaking, yes, there is a huge barrier.

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.

https://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-b...


Don't overdrafts have to be authorized? Can't you get a zero-overdraft card?

My bank, Chase, lets me turn off "Overdraft Protection". If I don't have enough money in my account, the debit card transaction gets denied.

But, you have to explicitly request this. The so-called "protection" is on by default.


Some US banks charge "maintenance fees" if an account doesn't have a high enough balance, so he may have needed to wait for a large reserve to build up before using his debit card for daily purchases.

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.




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