Cash is cool. Cash is anonymously. Cash is independent from any payment processor. Cash has no payment fees. Cash does not require power, so it is somehow environment friendly. Cash is just cool.
This is a good example of 'out of sight, out of mind'.
There are obviously costs in creating cash, distributing it, maintaining it (take old/damaged currency out of circulation) and enforcement of counterfeit protection. And ditto for power.
These costs and power requirements are not obvious though, and so the end-user is not aware of the costs involved.
Any comparison between cash and non-cash needs to be sure to count the complete lifecycle of and payment processing and not just the bits that the end-user sees.
At the time of payment they are irrelevant.
> Any comparison between cash and non-cash needs to be sure to count the complete lifecycle of and payment processing and not just the bits that the end-user sees.
Where is it convenient for you to draw the line? Do you include the production of card readers, the creation and maintenance of power and communication lines?
1.) have a cashbox (or multiple)
2.) guard cashbox
3.) every evening count money in cashbox
4.) hope the cash you took in is still in the cashbox
5.) if not 4) --> accounting nightmare + fire employee
6.) bring cash to bank
EDIT: Downvotes in HN are not a dissenting mechanism; they are there to bury inappropriate/misleading/etc. comments (not that I particularly care, but it seems a proper opportunity to clarify a misconception).
And nonetheless you were initially asking why would anyone join a bank that charged them ATM fees; the answer is that it might still make financial sense or be convenient for people. We are discussing about why there is a sizable population for which ATM withdrawal fees makes them prefer paying by card; you can of course "blame the victim" and say that it is the fault of those people not choosing the proper back. But it is just avoiding the topic, which is: this is a problem when travelling to Germany, and it I not a problem when travelling elsewhere in Europe.
For example, a spanish Santander card is free in the 4B network, but you will be charged on the german Santander ATM, as it is another ATM network (the Cash Group).
Not necessarily. Here in Latvia banks manage their own ATMs and whether you will have to pay a fee depends on your bank having a contract with the bank whose ATMs you're trying to use (usually there is no fee for taking money out of your bank's ATMs with a few exceptions, i.e. my bank has a 10% fee on withdrawals from credit cards, though most have debit cards anyway).
Who do you think is paying to run that ATM?
PG stated very early on in HN's history that downvoting to signal disagreement is reasonable [1], and that's been generally accepted as a guiding principle in the community ever since (though it's not in the guidelines, so it's a matter of individual preference).
What is in the guidelines is this: "Please don't comment about the voting on comments. It never does any good, and it makes boring reading." [2].
How can the community learn about the rules if we should not point to or discuss the rules? If it were not for my comment, you would not have pointed that to me :)
A good starting point, aside from keeping familiar with the guidelines themselves, is to follow dang's and sctb's comment threads, where issues like this are discussed freqquently. That's how I keep up.
https://news.ycombinator.com/threads?id=dang
https://news.ycombinator.com/threads?id=sctb
The reason not to comment on things like voting behaviour is that it takes discussions away from their primary topic and into the territory of being repetitive, uninteresting, and sometimes resentful and hostile. Of course that can never be avoided altogether, but it can and should be minimised :)
Cash gets more and more expensive (exponentially) on the amount of money (security, deposition etc.). On electronic cash it's like a flat line.
- If I'm doing a large cash business then the next $5+ costs me basically nothing.
- However if I'm doing a mostly credit card business, the next $5 will cost me the same as the first $5.
With that, I think the analysis you read was funded by payment processors.
But to correct myself: This 5€ break even is on a macroeconomic level on all parties. Cash is more expensive on this level when you spend more than 5€ on a single transaction.
Just one example of the other party: the end consumer also cannot get cash for free (even when he get's it free from the ATM, there are costs the bank has and maybe you pay them indirectly).
1.) have a terminal that supports all the different card types
2.) guard the IT infrastructure according to the PCI rules (have you ever needed to implement those, especially for small shop owners with no IT know-how)
3.) every day/week/month accounting of the payments to the corresponding receipts
4.) hope that the customer doesn't initiate a reimbursement
5.) if not 4) --> accounting nightmare + loss of the reimbursed money
6.) spending weekends (small business) for the required IT infrastructure
is this really necessary? AFAIK it's only necessary if you handle credit card numbers, which you don't, and can be outsourced to the payment processor so you're not seeing credit card numbers at all.
>3.) every day/week/month accounting of the payments to the corresponding receipts
this can't be handled by the POS software?
>4.) hope that the customer doesn't initiate a reimbursement
probably not a big issue with card present purchases
Many businesses can't afford to offer credit card transactions because they would be extremely expensive.
2) Why does the seller have to guard the payment processor's IT infrastructure?
3) Certainly faster than counting cash on top of counting the reciepts.
4) The problem doesn't exactly lie in the cash less system. Dealing with complaint is your business' problem.
5) Reversing 1 entry isnt a nightmare.
6) Are you developing your own solution or something?
It might be good to know as well that charge backs in the EU are not as common or easy as in the US.
(Fun fact: this effect is one of the major reasons casinos have you gamble with chips)
Case doesn’t have payments fees but it gets mishandled. You give away too much or a customer said I gave you 50, not 20, etc. Furthermore, unless you are a small business, cash needs to be handled and brought to a bank. That costs a lot of money. You have to pay an armed vehicle with a private security company to get to your store and drive it to the bank. You also have to have cash reserves at your store which can be stolen, etc. those are all cash “fees”.
Cash requires power to “create”. You can’t just create it by changing some bytes. They need to be replaced every 5 years or so. And with all the chemicals used to make it secure, it wouldn’t surprise me if it was worst for the environment. Unfortunately I couldn’t find any sources to confirm or deny that, so that is only my speculation.
Your other points are valid and the only advantage card payments have is that they can be analyzed (which is good if you do that but bad if someone else does it to sell you something) and that you can’t lose it (you only have to pay a small fee to get a new card if you lose it).
Compared to the power utilization of some crypto currencies I'd argue that this is negligible.
The power requirements for crypto currencies are the main reason I oppose them. They are a great idea but useless because mining and verifying transactions puts such a strain on our environment that I couldn’t justify the advantages for everyday use. And a crypto currency with doesn’t require a lot of power kind of misses the point.
For comparison, the German EC card system has fees of 0.125%, and most credit cards had fees of around 2-3% (VISA, MasterCard) or even in some situations up to 7% (AMEX, certain goods).
This combined with credit cards banning users and merchants for sellibg goods based on their own discretion (see the trouble the Rossmann group had selling Cuban goods in their German stores) should explain by VISA and MasterCard have to be eradicated.
2-3% fees for credit cards are common in the US if I remember correctly, but the EU has capped the fees to .3% for credit cards and .2% for debit cards. My point was just that cash isn’t free. It’s not that much more then a card.
Every note has an unique ID. But unlike with an online transaction, tracing a bank note requires a significant effort, sometimes even impossible. An average cash register doesn't log such things.
> Cash does not require power
It most certainly does. First, printing requires power. Any large transaction would likely to require use of a note-counting machine (unless a precise amount is not important). Any small transaction requires human power to process (counting, change) - and it's not free, because it takes power to provide suitable operational conditions. Given that humans are orders of magnitude slower, it could indirectly contribute to a significant resource waste (like queues are being slowes, so mall's parking lot being more occupied, requiring more power to drive around to find a spot, etc etc).
"Sometimes impossible" implies some sort of parity with "Sometimes possible" which I think is incorrect.
A challenge: AH26 184646 is the serial on a five pound note in my hand. Where did I get it from?
Banks may (and most likely do) know which exact ATM had issued this bank note to whom. As well as when it was last encashed and from whom. This does not guarantee anything (the note could've swapped hands a few times), but it's less than perfect anonymity, and I'm sure big data can reveal a thing or two.
As to less than perfect anonymity , yes, it is imperfect compared to an abstract definition but, boy is it sparkling perfect compared to a credit card transaction.
You know, the fact I'm not working for Facebook and just can't access your profile info didn't made data there private from, say, Cambrige Analytica. Hopefully, you see the idea - it's the same logic here.
I don't argue it's great and provides lots of anonymity and are essentially untraceable without a great effort. Still, just theoretically speaking - if your bank knows a serial number of every note you withdraw and every note stores encash with them, they have some of data to profile.
I guess it's 10 pages now.
If you as a consumer agree to your data being processed and shared as a business model, GDPR can't really do much for you.
Cashless may have its virtues but speed is not one of them.
Guess what happened when I lost my wallet? Or when I washed some dollars in my pants? All my money was gone.