That’s not to say I think cash should go the way of the dodo, but I don’t think there’s that much difference paying g4s to collect your money vs Mastercard.

IMO the benefits of cash are on the consumer, not the business.

Exactly. All the talk about fees misses the point because accepting and securing paper money is also very costly.

And the provocateur's stunt in the article also misses the point, because electronic payments for groceries aren't a dystopian tyranny no matter how loud he screams about it.

And the crypto skeptics are missing the point when they say you can't buy a coffee with bitcoin, because buying coffee is a solved problem, tap to pay with a bank card works just fine.

And the crypto advocates are missing the point when they say that lightning or solana or something else will solve the coffee-buying conundrum because that's not a problem that needs solving.

The real point about cash payments and crypto is whether people should be able to make large person-to-person payments that are not trivially surveilled or controlled.

In a free society, should people have this capability? Or are the dangers of illegal transactions so great that this freedom must be eliminated?

Europe has mostly free and mostly instant SEPA transfers which are one answer. Large payments are easy and cheap, though they are not secret or untraceable. Perhaps that's a reasonable trade-off.

The US payments system is a mess by comparison, where we have no privacy paired with extreme inconvenience. Try to buy a $20,000 car from a private party on a holiday weekend to see how well that works.

I’m not convinced that spur-of-the-moment, trustless private-party $20,000 transactions are a significant problem.

Every system has edge cases.

The FCBA coverage, on the other hand, has some real value. That said, even though I have used it a few times, I doubt it has saved me as much as I've spent in CC fees.

Furthermore you get a lot more than just writing a few bits with a credit card transaction. You can bypass the cc companies and cash logistics costs by taking checks. But certainly the revealed preference is to not do that.

It is much cheaper for the bank and customers to use cards, but where I live the banks own a payment network that does not involve visa and mastercard so the cost is much lower and there is no rent seeking so card use have no fees.

We also have an app for sending "cash" for free to friends, family and businesses that under the hood are just instant bank payments between the accounts.

And derisking is illegal, so you have to provide a bank account and cards to anyone who wants. The high risk customers just need more follow-up on terms of AML.

Also, I wasn’t able to get a debit card until I was 12, but perhaps that has changed over the past few decades.

My kids got a card at around 5, but they are older now. Not with visa/mastercard of course :)

With respect to closing accounts, there are extremely few cases where people can be denied a basic account with the largest banks, but most smaller banks are not required to provide a basic account, and other account types can be denied at will, and most people have other accounts types (there are something like 7 million basic accounts).

However the homeless problem is virtually non existent in this country, same with the lack of id.

It's just so much more convenient to use digital payments that almost nobody use cash anymore.

Unbanked people is more concerning, as unbanked people include political enemies of the state. The centralisation of power that digital payments allow is concerning.

The other thing which isn't mentioned in this comment chain is that a reason credit is cheaper is that your transaction data is harvested.

Most banks here don't handle the actual payments themselves except the biggest ones.

The small "savings banks" like the one I work in doesn't have shareholders either, they are owned by the depositors. Almost every small town and community here has one.

Alternatively, they were counting the time they spent cash handling as a business owner as zero cost, which isn’t really true.

Someone willing to take the risk of the severe penalties for dodging taxes would not be deterred from offering discounts for cash payments because they broke another law by doing so. They can also avoid the law by not taking card payments at all. I have found that many people in businesses traditionally took cash payments do not take cards but are happy to be paid by bank transfer (which is usually free on both sides in the UK if the sender is not a business).

The value of the time spent on cash handling may be very low. What is the opportunity cost of the time if it can be done in otherwise dead time? It is worth what value they attach to it.

Most small places not declaring cash want to stay off the radar, they use tricks like using old cash resisters that don't have trackable invoice ids.

Food places are rife with it as they can claim excess food was thrown out as spoiled.

In fact, I have seen some small places ask a 3-4% surcharge for cash payments, because banks don't process cash for free any more.

Edit: alternatively they might not have same profitability requirement as other restaurants, because a cash-only restaurant is perfect front for money laundering.

You’re pretending as if there weren’t any costs associated with handling cash. There’s almost always a handling fee if you want to put the cash into an account, which you will need to do if you want to pay people that are somewhere else than you are. If you have larger quantities of cash, you’ll also have to pay for safe transportation of the funds. If you make an honest comparison

But you should be very careful in eliminating cash.

I assume cash handling fees are made up by banks who want more transaction fees. That’s not a real thing in my experience. I many times have gotten a discount for cash. I have not shopped a few places because they don’t accept cash. But I have yet to be charged a cash fee by any of the banks I use.

And they have insane surveillance data on their customers from doing so. Data that is used for all kinds of unintended purposes.

Cash is also one of the last strongholds left to maintain anonymity and keep purchasing information truly private without handing heaps of data to the corporations that make a buck off your receipts—or worse, to hackers, in the case of a data breach.

To say nothing of the unbanked… which is a massive issue.

If that’s the future you want, we don’t see eye-to-eye. You are giving up a LOT more than you realize.

That's because you presumably have a consumer account. If you had a business account and were depositing thousands in 20 bills they're probably going to charge you fees.

The entire reason why small businesses moved away from cash is because its cheaper even taking into account fees. Food trucks, popups, small merchant kiosks. Not needing to take cash means far less overhead.

You're more than welcome to argue the benefits of cash transactions and in most cases I would agree. But you should not miss the truth of the situation.

Electronic payments are much safer, no physical cash someone can steal.

From what they tell me, that's because: - they get 100% of the money (no tax) - it grants them the right to cheat with tax declaration (which is always good) - it can be quicker and easier than credit card (I'm think of those guys who sells stuff for 5€, for instance)

I believe medium/large businesses loves credit cards, because the people doing the payment are low-waged, untrusted people, who cannot do maths etc (or whatever the reasons managements got in their head) But small businesses ? When you give money to the owner of said business ? They have credit cards because the consumers use them, but they hate them

Citation needed. I've been depositing cash for years, with multiple banks, and nobody has ever charged a "handling fee".

> safe transportation of the funds

Yes, a lot of people have this irrational reaction to carrying large amounts of cash, as if your unremarkable Toyota miraculously sports a giant "BRINKS" logo every time you carry cash, attracting the attention of would-be criminals everywhere. I assume you believe that thieves and pickpockets are regularly carrying millimeter-wave scanners to see what's in your pockets, briefcases, backpacks, etc?

It's a fee associated with business accounts.

>https://www.bankofamerica.com/smallbusiness/deposits/resourc...

>Cash Deposit Processing No fee for first $7,500 in cash deposited per statement cycle at an ATM or Financial Center; then $0.30 per $100 deposited thereafter

No, the total costs of handling cash currency & coins for large businesses will still add up to 3% or more which is in the range of the fees of credit-cards processing. Costs of accepting cash also includes:

- paying for armored trucks and security guards to transport bags of cash to the bank

- percentage of cash lost to crime such as

--- employees/cashiers theft/skimming by handling cash,

--- robberies,

--- counterfeit bills

https://www.google.com/search?q=retailer+total+costs+of+hand...

For a business, a true arbitrage of not paying 3% credit-card fees would be convincing customers to pay by check or electronic ACH bank account withdrawal. Those payment methods avoid the costs of managing loose cash and also avoid the fees from the credit-card processors. But they also have the same privacy concerns as CCs if customers care about that aspect.

Like today I returned some deposit bottles and they had run out of 20€ bills... Which should be the most common ones. Going on trip so I preferred 10€ bills, but still...

Nobody is paying 4% for any cardholder-present transactions.

Where? A quick search on their website shows 2.6%: https://squareup.com/us/en/pricing#rates

often as high as 2-2.5%

====

How we pay

- Credit cards account for 31 per cent of transactions.

- Cash accounts for 29 per cent of transactions.

- Debit cards account for 26 per cent of transactions.

So what does it cost to process a transaction? The Bank of Canada survey looked at the estimated cost of processing a $36.50 transaction, which was the median cash transaction in its survey. Costs broke down like this:

Debit card: 19 cents.

Cash: 25 cents.

Credit card: 82 cents.

The study notes that the overall cost of electronic transactions falls as the volume increases, which the authors suggest, may encourage greater use of electronic payments.

====

[1] https://www.businesswire.com/news/home/20180130005244/en/New...

If you are paid via direct deposit, you're financially incentivized to stay cashless. The direct cost of spending via debit/credit card (if one doesn't carry a balance) is zero, compared to the cost of withdrawing cash.

If you want to inventivize salaried professionals to pay with cash, try outlawing fees on ATM withdrawals first.

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

The support is still very limited, but in India a similar system (UPI) managed to become ubiquitous.

Have you never done a chargeback on a credit card? With Fednow, UPI etc you can't.

Try to explain buying with cash in 200 years to someone who never seen it.

What if I need to pay just a little, do I tear a bit of the paper?

No, you can't tear. If your piece of paper is worth too much then the seller gives you other pieces of paper worth less.

Can I throw out the rest of paper after I'm done buying?

Not unless you want to lose a piece of your value.

What if I don't have enough pieces of paper on me?

Then you can't buy.

So I should just carry all my worth in pieces of paper on me at all times?

That's a bad idea because when you loose this paper or it gets stolen or destroyed you no longer own their value.

Where do I get the paper from? Your employer can five it to you every month or week and you hold it in your home. Alternatively employer transfers the value to the bank normal way and when you need paper the bank can dispense it to you through various devices or service points.

Are any of those devices handheld?

Unfortunately no.

What if my house get burned down or robbed?

Then you lose all the value associated with all the papers kept there.

And so on.

Try to explain buying with a credit card online 200 years ago to someone who has never seen it.

You type in about 23 digits (16-digit card number, 4-digit expiry month, 3-digit verification code) to make a payment.

But these digits only change every few years as you renew your credit card. So many parties will learn of your digits and you won't know who leaked them.

The merchant on the other end can take out any amount of money from your account; it's pull-based, not push-based.

The merchant on the other end can trap you in a recurring subscription without your knowledge or make it very hard to cancel.

People have credit limits in the thousands of dollars, and in any single transaction you are liable to lose that much money. Meanwhile, you can't lose more than the hundreds of dollars of cash in your wallet.

You can call your card issuer to dispute charges, but now you're at the mercy of an intermediary.

The intermediary skims about 2~4% of every transaction, for the luxury of being able to spend your own money.

You can't process certain types of transactions in an offline environment, such as debit cards during a power outage or on an airplane (though Wi-Fi is slowly becoming more common).

And you think cash is crazy?

I agree that giving anyone your card number is insanity. I only did it few times in hotels and it required tremendous leap of faith from me. To be honest I should have gotten plastic prepaid for this purpose.

If you do it by hand yourself the effort burdens you and the seller.

You might argue that the cost is too much and maybe it should be state run and paid from taxes since it's the state that provides the service of money.

No seriously, when I first moved to the Netherlands I was wondering what kind of backwards country wouldn’t let me use a credit card at the grocery store. And that’s when I learned about how crazy it is that credit cards and even American debit cards have such needlessly high transaction fees.

The interest argument of course is nonsense because the opportunity cost ia outweighed ~50x by the interest benefit you receive from the entire purchase going on credit vs just the 2% interchange.

Thanks for responding — can you clarify this interest benefit you are talking about?

Anyway, as somebody else said, a 3% fee on transactions is just ridiculous. If you get any bit of competition, transaction-value based fees tend to be on the order of 0.5%.

But you know, our governments are fucking useless, so that ain't happening anytime soon.