I've been banging my head against the table since moving to Germany about the lack of convenience with cash payments and the need to constantly visit the ATM. Yet the economy is doing just fine.
Incidentally when I lived in Berlin I used to only use cash and I never found it a bother. My bank had ATMs in many places and it really wasn't very hard to keep cash around. I've always found it a little odd when people talk about ATMs as being inconvenient when historically they're probably as convenient as they've ever been. Of course it is always easier not to have to go to an ATM, but today it really isn't that hard unless you have some tiny ATM network.
Regardless, having both cash and cashless is definitely the best of both worlds. Convenience, redundancy, autonomy. I wish people would stop unnecessarily view the two methods as incompatible when they complement each other so well.
It's the same in Denmark. The payment processing networks are really stable, just not stable enough to eliminate or not always carry enough cash to pay for groceries.
When payment processing have 100% uptime for five years, then maybe we can debate eliminating cash in some places.
I'd be interested to see any data collected regarding this; whether or not armed robbery against things like restaurants and grocery stores has decreased after the move to cashless.
And if you have "the need to constantly visit the ATM", then perhaps it would be a good idea to withdraw more money to last you longer? My bank actually doesn't allow withdrawals of less than 50 Euros, but even before that was introduced I simply withdrew the money I needed for a month at the beginning of a month -- and that was it.
[1] http://www.faz.net/aktuell/finanzen/meine-finanzen/geld-ausg... (German)
Well:
- instead of just going to a shop, I now need to go to a bank, and then to a shop - I mean that's pretty obviously and undeniably less convenient for a start
- I have to carry a lot of little bits of valuable paper around with me - enough for an entire month of expenses in your opinion!
- when I pay I have to wait for them to count the money, gather up the change, return the change, which I then have to count, compared to just tapping my card and going
- I get no protections such as insurance for my purchases
I can't how understand how anyone can argue cash is more convenient!
And how can you possibly argue cash is faster? Paying by card takes 0.5 seconds - I don't have to even look at what I'm doing I just wave my card and go.
Your articles talks about arcane things like inserting your card, paper printouts, signing with a pen - you haven't needed to do that with cards for a decade or more.
Hmmm...if you go to a bank to withdraw cash every tine you go to a shop I could see your point, but I would suggest that "you're holding it wrong".
> I have to carry a lot of little bits of valuable paper around with me
Which are limited in terms of risk, whereas a card can withdraw...whatever your limit. Carrying the bits of paper (and coins) has the big benefit of being tangible, that is we get to use all our senses to understand something otherwise very abstract.
> when I pay I have to wait [..]
Err...sorry, cash transactions are invariably much quicker than card transactions around here.
> I get no protections such as insurance
You mean you don't have ridiculous services bundled together for no reason whatsoever.
> I can't how understand how anyone can argue cash is more convenient!
And I can't understand how anyone can argue that cards are more convenient, when they clearly are not.
>And how can you possibly argue cash is faster? Paying by card takes 0.5 seconds -
Where? Around here, card transactions always take longer.
> arcane things like inserting your card, paper printouts, signing with a pen [..] decade or more.
Actually, having to sign on EC payments has become a thing recently, it used to be exclusively PIN. And sometimes it's PIN, sometimes it's signature, in the same shop, with the same card. They payment processor seems to choose by some randomized algorithm.
> whereas a card can withdraw...whatever your limit
That's not my liability - it's the card company's. As long as I'm not negligent, like giving someone my PIN, I am not liable for someone stealing my card and using it. I don't lose anything.
I'm strictly liable for less value with card than cash.
> Where? Around here, card transactions always take longer.
How does it manage to take longer? Don't you have contactless in Germany? If you don't, then that's the problem - not the cards themselves.
The last point seems debatable given Germany's backward card infrastructure, but for liability and number of places I have to visit, it just seems a mathematical fact that cards are more convenient.
Only by 1/N. And since there are ATMs near my shops and it's mostly about trips, not about # of shops, it's both negligible and certainly well worth it for the benefits. And if that epsilon of effort is too much for you, you can get cash-back at most grocery shops, though the amount will typically be smaller, one reason I prefer the bank ATM.
> That's not my liability - it's the card company's
Not around here it ain't. And of course if the card company "takes on" the liability, it just redistributes it to its customers. So you are paying for it.
> Don't you have contactless in Germany?
Rarely if at all. Also I don't see how contactless (you just swipe? No PIN?) manages security.
So: tangibility, security and data protection are clear benefits. Convenience as well around here, and can only be improved by making the entire thing less secure.
We had a card-provider sponsored big-bang on contactless payments years ago in the UK and it's been an epiphany. Life is so much better cashless.
No, for us, the value proposition is just not there. The benefits are at best highly marginal and the disadvantages profound, if less visible.
> card-provider sponsored big-bang
Hmmm...and they did this out of the goodness of their hearts?
Cards were introduced in order to get you to spend more, in particular money you don't have, which is why it started with credit cards.
Making a payment by card is essentially the same, whether it's € 1 or € 100, or even € 1000. With cash, there's a bit of a pause as you count out the bills. And you notice it much more when prices go up. etc.
And of course the whole brouhaha about anonymous digital currencies. Huh? More technology to fix problems with technology? How about we use this really old technology that already has all these benefits.
You don’t see the value because you don’t know what’s possible. For example you asked if you ‘swipe’ a ‘contactless’ card so you must not know what other countries’ cards can do. (You don’t swipe it - that’s the whole point - it’s without contact - contactless.)
> Hmmm...and they did this out of the goodness of their hearts?
No they benefitted but so did we - not everything is a zero sum game and sometimes everyone can work together for society make progress but someone needs to nudge.
You still have to hit the NFC coil by a few millimeters, it's a pretty comparable motion and effort.
And it takes longer than it takes an Aldi cashier to give out change.
In places that don't have contactless payments, cashless may be less convenient but contactless is probably on its way there so your argument seems like a bit of a straw man. At any rate, I'm sure it can be agreed that contactless cashless payments are more convenient that cash ones.
Cards also have a dispute process.
> much quicker than card transactions around here
That's because German vendors are hopeless at processing cards.
Australia/HK/Singapore/China/most of Europe: the reader prompts you with the sale amount. You tap your card. It adds zero time to the transaction.
Germany: the vendor asks to hold the card. They insert the card. They ask the terminal to do a credit transaction. They give the reader back to you for the PIN. You hand it back. They ask for your ID because you're a foreigner. Blah blah blah.
> having to sign on EC payments has become a thing recently
So you're actively going backwards, then?
I'm also going to point out three other annoyances with the German banking system:
- Cash machines are rare (kilometres apart)
- To avoid fees, you have to use machines in your network
- The fees on out-of-network withdrawals are huge (3-5 EUR, but apparently unrestricted; I paid 10 EUR for a temporary ATM at an event once).
So you carry a lot of cash.
Define "a lot". But yes, I usually have a week or two supply. Why on earth would I not?
> You tap your card.
As asked elsewhere: how is this secure?
It's more secure than your two weeks' worth of untraceable cash that you're lumping around everywhere.
If you lose your card you cancel it. I can do this on my phone in 30s flat when I notice it's gone. Things bought in the mean time are covered by the card provider, and they prosecute the criminal to get the money back.
If you lose your two weeks' supply of cash what do you do?
Nope. If my cash is gone, that's all that's gone. With a card, you can do a lot more damage.
Cash also doesn't get denied for random/unpredictable reasons when you are abroad.
> 30s flat when I notice it's gone.
Coordinated gangs will clear out your bank accounts faster than that.
If I lose my cash, that's it. I don't have to cancel anything, I don't have to reapply for anything. I can borrow cash, or loan out some cash. Easy peasy.
Contactless is a solution looking for a problem.
But a credit card doesn’t give access to a bank account - it’s a credit line.
If someone except me uses that credit line then the purchase is taken off my credit line in minutes.
Well, that's another whole can of worms.
Virtually no retailer in Germany accepts credit cards because the fees are too high and price competition in Germany is pretty brutal (just for reference: Walmart, which steamrollered US retail had to retreat from the German market, in part because they simply couldn't compete).
So you are paying for these services, and yes, cost of living is higher in the UK, for example:
https://www.numbeo.com/cost-of-living/compare_countries_resu...
Oh, and the terms imposed on retailers by credit card companies are pretty brutal, too. For example, they push most of the risk of fraud onto the retailer. If you think that doesn't matter: KAGI went out of business due to fraud.
https://tidbits.com/2016/08/04/kagi-shuts-down-after-falling...
So what's happening when the purchase is "taken off" your credit line is that the retailer gets hit, doubly, meaning they have to raise prices on everyone to stay in business (see higher cost of living above) or they go out of business (see KAGI example). German retailers don't want this and German consumers don't want this either.
And of course the credit card companies have managed to create a tax on the entire economy, essentially a rent-seeking/parasitic business model, while pushing all the cost and risk onto others (the general public and the retailers). Now if I were a credit card company, I'd be all "Yay!". As a consumer or a provider of products and services...not so much.
And again, the convenience, while shiny and cool, is at best trivial, and I would say offset by other conveniences such as haptic processing, fungibility, loanability ("Quick, can you loan me €50?", "Er, here's my card?").
And there is significant added complexity in the system, which can fail fairly dramatically. For example, when I was in living in the UK my UK card would not work just about every time I went abroad. "Fraud protection". Hah. I've had that happen a lot more than I ever had cash lost or stolen, and the consequences are more severe. The bank suggested I should contact them every time I went abroad. Excuse me? I need to ask my bank for permission to travel?
That's one thing that's also a very important lesson for software, particularly performance: in almost all cases, resilience is more important than (peak) performance. You really want to strive to avoid bad outcomes, not make the already good outcomes a few percent better. This is harder, but more worthwhile.
And of course the point of credit cards is to get you to spend money you don't have, which is also why eliminating that haptic feedback of money leaving your wallet was and is so important. And surprise, surprise, credit card debt is (shockingly) high at least in the US and the UK.
So don't get me started on credit cards :-)
Everywhere will accept a credit card, they're just slow about it.
Now that I've left ? Rarely have more than 10 euros in my pocket, can take 20 euros at ATM and not give a shit about fees. I can pay with my card everywhere.
In Germany, that's very difficult, the courts generally assume that the chip+PIN system is safe.
And of course, you don't actually think that you are not paying for card fraud, do you? You just pay for it in the fees the card companies charge.
https://www.numbeo.com/cost-of-living/compare_countries_resu...
>Australia/HK/Singapore/China/most of Europe: the reader prompts you with the sale amount. You tap your card. It adds zero time to the transaction.
Outside of department stores and similar, using a card is very inconvenient in China. Depending on the place, you need cash or Alipay/WeChat.
No more wondering if an ATM is part of your network and end up with outrageous fees. I see an ATM, any ATM, I can use it to withdraw cash, simple as that.
Surely retaining your privacy includes being able to choose freely who you do business with?
I could not agree more with the process you described every time I pay with a card in Germany. Germans point to this inefficient process for the reason cash is faster.
However, when I lived in the US, Australia, and NZ you literally tap your card with paywave and the transaction is complete. It is impossible for a cash transaction to be faster than this.
Regarding the speed of transactions: cash might be faster than signature or even Chip+PIN, but is surely not faster than contactless.
For example, anyone with a contactless Visa/Mastercard or phone can enter the London Underground by simply tapping at the barrier. They do not need to have a pre-existing relationship with Transport for London, to buy a ticket in advance, or to preload a stored-value card (as you generally must do in other city transport networks). And the ticket barriers open on average in 480ms. [1] That's pretty fast. You can't even pay by cash on a bus in London any more.
[1] https://www.whatdotheyknow.com/request/payment_methods_time_...
In Berlin, there is no barrier.
It is true that there is no barrier in Berlin, but you still need to buy a ticket. For casual users such as myself, who don't have a season ticket, this takes significantly longer than 480ms: find ticket machine, queue, navigate menu, insert cash, wait for change and ticket to be printed, find ticket validation machine.
It is quite possible to miss the train here by having to queue to buy a ticket, particularly in busy places like the airport. This could be avoided if the tourists were able to use their existing cards/phones to tap in.
This is a much bigger deal than a lot of people will admit. It's a lot easier to waste your money without a second thought when you're using a card. It's similar to chips in vegas - you're much quicker to gamble the chips than you would have been with cash.
It's not as big of a deal if you're really responsible financially, but if you're the kind of person who binge-shops amazon then going cash-only for a few months might be an eye-opening experience.
Contactless payments - no thank you, I like to have some control over my cash flows.
The mix of both is by far the best - have cash when you need it, have a card when you need it. Why can't people understand that not everybody thinks/behaves/lives same as they do?
- The smaller amounts (equivalent of a more or less dollar) are coins, not banknotes. They make your wallet way bulkier.
- When paying with a bank note straight out of an ATM (usually a 100 PLN note), the clerk will usually ask you for a smaller note, and sometimes refuse to do the sale, as he has no change. Other times, he'll take your hundred, but with an eye roll.
Meanwhile, contactless card transactions take under 10 seconds and work pretty much always.
On my way to work, before I get to the subway station, I pass no less than three banks with ATMs where I can withdraw money. You can even withdraw money in supermarkets without fees if you spend a certain amount of money.
> I have to carry a lot of little bits of valuable paper around with me - enough for an entire month of expenses in your opinion!
Possibly. I never said you have to carry around all of it at any given time. But I'd think that it's pretty much expected that you always have cash in your wallet in Germany.
> when I pay I have to wait for them to count the money, gather up the change, return the change, which I then have to count, compared to just tapping my card and going
That takes...a few seconds? How is that an issue?
> I get no protections such as insurance for my purchases
Protection from what exactly? Insurance for my groceries?
> I can't how understand how anyone can argue cash is more convenient!
In Germany it is. That's a simple fact.
> And how can you possibly argue cash is faster? Paying by card takes 0.5 seconds - I don't have to even look at what I'm doing I just wave my card and go.
Yes, contactless payment is also possible in Germany, depending on the stores and whether you have the right card. But the way it's implemented here doesn't make it that much faster in the end.
> Your articles talks about arcane things like inserting your card, paper printouts, signing with a pen - you haven't needed to do that with cards for a decade or more.
Oh, I guarantee you, it's not arcane at all in Germany, it's used every day.
https://www.google.com/search?q=credit+card+price+match
Beyond that, making a purchase of an electronic device with a credit card can extend your warranty.
Don't know if that applies to Germany, it may apply to where ever the person you are replying lives.
Cashiers handling cash are a liability because they can steal and make mistakes more easily than a computer system, so paranoid business owners can reduce that particular risk.
Based on the date of the article, I assume this mostly precludes contactless payment. As a personal anecdote, a salad place I know in Berlin recently switched over to card-only and they specifically encourage and educate people to make use of the contactless payment feature thats enable in most debit/credit cards Germans have. They went from unmanageable long queues that made eating there a chore to almost no queues and one of the fastest ways to pick up food via that single change.
I thought it was just me. On Chrome the site kept on reloading as soon as I scrolled down. Managed to bypass that behavior by hitting the "cancel refresh" button as soon as I scrolled down.
Still, a weird thing to happen, this morning Twitter had a pretty similar issue with their GDPR message: It would keep on reloading and reloading, making the whole thing unusable, until you manually told the browser to stop reloading.
This behavior persists with or without adblocker active, did GDPR break the Internet?
That really depends on the type of cashless payment you are using. EC payment usually takes longer because it involves the process of preparing the reader, having the customer put in his card, wait till the reader is ready, input pin, wait again, done.
But I've also seen contactless card payment with Visa/Mastercard that didn't require any PIN entry/signature, those are surprisingly fast.
At least they have their money purses in restaurants and give you change in an instant instead of fumbling it like in other places. They are as efficient as cash allows it to be.
(And most places that cards only take German cards)