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Comment by orangechairs | Hacker News Reader

To echo what others have said, cashless systems -- especially in fast food chains -- are a quick way to discriminate against a whole population of the underbanked. I was in Dos Toros (burrito chain mentioned early in the article) about a month ago, and the woman in line ahead of me didn't have a card. She got so embarrassed at the register despite having ample cash to pay for her meal. I paid for her with my card, she paid me in cash, and all was fine, but no one walked away from that experience feeling good about it. It was such a unnecessary emotional stress on the woman. I feel weird returning to Dos Toros knowing this policy is creating these experiences for customers.

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I feel weird spending at places like this at all. Not just because of what it does to other people, but also how it modifies my own behavior. What if it had been me? I can't leave the house with just a twenty in my pocket? That's not good enough?

I have to stop, wait, find my wallet, make sure it has a card with a balance on it, know what that balance is, make sure the card isn't damaged (demagnetized, scuffed chip contacts, curled up in the heat of the clothes drier), and if I don't have this singleton plastic token that I cannot easily replace or trade, I can't go to certain places?

Just because your cash register is an iPad, doesn't mean you can't handle real money too. What's really going on? Why would a restaurant prefer anything over cash? In my experience, food service normally loves cash, because they can report it differently. Tips are quasi-off-the-books, within a certain margin. So there must be some kind of motive to hook into a payment provider.

If farmers markets, bake sales and lemonade stands can handle a simple cash box, any restaurant certainly can.

But really, we know Dos Toros is a franchise with more than just an iPad for a register, so for sure they're doing something with customer data behind the scenes. Although how much is that worth to a burrito joint? Perhaps it's free payment processing in exchange for exclusive cashless operations plus a data agreement.

> Why would a restaurant prefer anything over cash?

Because there is a dramatic reduction in costs from going completely cashless. You don't have to pay for security for cash-on-hand. You don't have to pay for an armored car to transport cash to a bank. If you don't want to pay for an armored car, you don't have to pay (and trust) an employee to do it for you, else paying with your time by doing it yourself. You can serve more customers in less time because you no longer have to make change with each transaction, and you no longer have the cognitive load of ensuring that the bank gives you enough change and in the correct amount on each bank trip so that you can make change for your customers. Because you don't need to trust your employees with cash anymore, you have reduced the risk associated with the hiring of an individual employee, which makes it easier to hire ex-convicts - and in many areas, that (unfortunately) makes it dramatically easier to hire people, period.

Sure, these costs are balanced out by the formal costs associated with card processing fees and no longer being able to partially hide income from the taxman. But the flip side is the improvement in trust between management and labor, which overall ought to make cashless businesses better workplaces.

Every now and then this will backfire on the business. For instance, what happens if the system goes down?

I was recently in a cashless place that suddenly lost internet access as the cashier(?) was ringing up my food. With no way to charge me I was given my lunch for free and everyone in the line behind me was forced to wait.

The mastercard network was down recently (maestro cards also operate on it), which did really bad things to basically everything that accepted only plastic. Of course you know in the abstract that this full plastic stuff is a bad idea (it's so obvious), but it's very sobering still to see this in practice.

In my experience, a good rule of thumb is that anything the wait staff argues for only has one actual reason - more money for them. Anything else is a smokescreen.

> I have to stop, wait, find my wallet, make sure it has a card with a balance on it, make the card isn't damaged (demagnetized, scuffed chip contacts, curled up in the heat of the clothes drier), know what that balance is, and if I don't have this singleton plastic token that I cannot easily replace or trade, I can't go to certain places?

This is a gross exaggeration.

> I have to stop, wait, find my wallet

Because you just cram bills in your pocket. No. You'll have to get your wallet regardless. And your wallet hold more than just your credit cards, it holds your license and any other bits you'll need when out and about. Don't act like the wallet exists solely to facilitate credit cards.

> make sure it has a card with a balance on it

This is entirely a different problem. And one that is on you. This is something I don't think about. If you are juggling that many cards, especially ones where you've reached the limit or don't have funds in the account to cover an expense you plan on, that just sounds like poor money management. Your option in a cash-based society would be simple starvation.

> make the card isn't damaged (demagnetized, scuffed chip contacts, curled up in the heat of the clothes drier)

Are you that careless? Also, cash can be damaged by washing machines and such as well. I've never really had to worry about whether or not my card is damaged.

> know what that balance is

Probably the only salient point in that entire block of nonsense. You'd need to kind of remember your balance if you use it daily. But then again, when I was poor, that number was always in my head. And it's not like it would be much different than a checkbook if you wanted to keep track.

> and if I don't have this singleton plastic token that I cannot easily replace or trade, I can't go to certain places?

And? There are all sorts of tokens that restrict your ability to go places that you aren't complaining about.

> food service normally loves cash, because they can report it differently. Tips are quasi-off-the-books

Aka, fraud.

You don't need your liscense (or other id), if you're not driving. (Often, it's a good idea to have, but it's not required for citizens in the US).

Another thing is I can give $20 to a reasonably responsible child and ask them to fetch me a burrito. It's not a good idea to do that with a credit or debit card; I would have authorized them, but if challenged they may not be able to complete the transaction and may have trouble bringing my card back.

The world is bigger than the US, and in a lot of places in the world it is indeed mandatory to carry some form of ID.

You're giving good-faith rebuttals to arguments that weren't offered in good faith. Nobody actually has trouble leaving the house with their wallet. That's not a real problem that intellectually average people actually have.

I don't own a wallet. I keep my license and debit card in my vehicle, and my one credit card in my desk at home.

I pay cash for everything but gas, except online purchases. I've been operating this way for most of life.

Treating people as if they're degenerates or below intellectually average for not using plastic (or staying away from Facebook) is uncalled for.

>Treating people as if they're degenerates or below intellectually average for not using plastic

I don't think there's anything wrong with choosing not to use plastic and I didn't say there was.

But if you had a wallet, would you consider it a herculean task to "take it with you"?

That's who he's "treating... as if they're degenerates or below intellectually average", people who think "bringing a wallet" is this massive undertaking that requires a paragraph to describe.

In Denmark and Sweden it is simple: you are likely to have your phone with you, and thats enough. MobilePay and Swish respectively are wildly popular solutions.

mobilepay is pretty ridiculous for a foreigner to use actually. You are required to have both a danish bank account and danish telephone number in order to use it. For this reason alone, it can never take off entirely. Until there comes a way that one can use their home account in a foreign country (with fees) like a card, then it will never reach the same levels of adoption.

In the US this isn't reliable. I just got a new phone and learned the hard way it doesn't support NFC, and even if it did a lot of merchants disabled their NFC readers waiting for more merchant-friendly rails to reach the market.

Swish is (sadly) popular for p2p payments and "lemonade stand"-size "businesses", but good luck paying with it in a traditional store.

That is a non-cash solution which is insubstantially different from a plastic card.

What card-only establishments really need is what cash-only bars and diners have had for years: an on-premises method of conversion. It would effectively be a reverse ATM, that you could feed cash and get a prepaid card (minus, of course, an ATM fee).

If something like this doesn’t exist, it seems like a good startup opportunity.

Reverse ATM would be a cool startup, especially if you could make online payments or acquire cryptocurrencies in addition to getting prepaid cards.

After a quick search, it looks like someone in Portland tried to do something along these lines: https://www.atmmarketplace.com/news/reverse-atm-caters-to-po...

It doesn’t look like it went anywhere, online info on the company is scant apart from a few press releases.

Basically you’re just talking about offering a physical cash-friendly terminal to the digital economy. Maybe someone should try that angle. Counterfeit and money laundering will be huge issues. It’s hard to anonymously launder money at scale with storebought prepaid cards, because of the humans in the sales loop (which also allow non-money-laundering transactions to happen anonymously). A workable compromise might be to require a SSN/PIN combo at the reverse ATM.

As for counterfeit: sophisticated scanners? I think many banks allow you to deposit cash or checks at their larger, bank-branded ATMs. Perhaps that technology is available. You’ll probably just end up buying “counterfeit insurance” and then try to get whatever tech will drive your premiums down.

All good points. If the install market for these is fast-casual restaurants, it's probably not unreasonable to cap them at something like $20 per transaction. While the cards should be reloadable, they could probably also have limits for both carried balance and reload frequency, and the presence of human staff at restaurants should also deter money-laundering activity.

These are already at airports, since cash can't be accepted.

You mean a gift card?

That would just add an extra step to cash transactions, if you plan on allowing people to buy gift cards with cash. The whole point of the policy from the business’s perspective is to cut costs around handling cash.

The question to me is, why does this population exist in such great numbers? I understand not having good credit, but having access to a checking account with a debit card doesn't seem like it should be insurmountable.

The last checking account I opened just took $5 to open the account (technically a "membership" fee at a credit union). No any proof of employment, income, ar assets was needed [0], and I left with a debit card that day. Total time involvement was maybe 15 minutes.

[0] I just re-checked and all that is needed is SSN, Government ID, and the initial deposit (as low as $5, can be paid with cash, debit, credit, or check)

They did run a credit check though, and if you don't have a high enough credit score, they won't give you a debit card - they'll only give you an ATM card.

Also, what could be called credit-union deserts. Lots of people don't have access to a credit union, and the large banks charge huge fees on poor people (see "the high cost of being poor"[0]). Past that, some of the above poor people have had terrible experiences with banks and want nothing to do with them. It easily adds up to that ~10% mentioned in the article.

[0] http://www.washingtonpost.com/wp-dyn/content/article/2009/05...

Many bank accounts are really expensive if you can't manage to reach the free tier. One of my local banks will take $6/month if you don't leave $100 in there. And if you're having trouble leaving $100 in your account, it can be pretty easy for a delayed transaction to trigger an overdraft, and then you've got even bigger fees. Do that enough times and either you'll swear off banks, or they'll blacklist you in chexsystems or both.

I now several people that don't have the income or credit score to get the account or even able to afford the $5 deposit just like that.

I work in NYC and it sounds weird, but a lot of people still don't trust banks.

How long ago?

Some banks are doing these Pre-paid-ish cards now. I know Chase has Liquid, other banks may call it something else. For the most part, it functions mostly like a debit card backed by an actual checking account. But the requirements are far lower. They don't give a flying fuck who you are. You can even get checks to access the funds on the card.

And for like 90% of the time, you'll never realize you don't actually have a checking account. You won't realize that your money isn't technically backed by the bank. Then that 10% of the time will make your life inconvenient.

So I'd say that access to a card-based payment method doesn't seem insurmountable. But an actual checking account could still be out of the reach of some people.

I also opened an account at a credit union less than a year ago. $5 was enough for a checking and saving account, though I had to wait a few days for my debit card to be mailed. I needed proof of residence and ID, but no proof of income.

Sounds like an https://www.reddit.com/r/shittychurning/ opportunity, to me.

Can't you buy a prepaid debit card at a Walmart?

I think it's probably fine to let the business decide whatever means of payment they want to accept.

Compare cash to the walmart card:

1) walmart charges 3% for all purchases outside of walmart

2) walmart charges 1$ for all purchses

3) walmart charges 5$ monthly maintenance fee

4) walmart charges 3$ to 5$ per deposit

5) even to check account status costs 50cents

Holding cash has none of these costs. I am not surprised that there is a large contingent of society that doesn't trust cards and banks.

In European Union

1) Bank account is a right https://europa.eu/youreurope/citizens/consumers/financial-pr...

2) debit and credit card fees are capped very low http://www.thetravelmagazine.net/no-credit-debit-card-fees-e...

This does not remedy privacy issues, but in general is more democratic way of doing things. Card payment cap also effectively killed cashback cards and premium credit cards that largerly favour rich.

2) debit and credit card fees are capped very low

True, they try to compensate by pulling some other shitties. Like the old "Do you want to pay in your home currency?" crap.

Worst are ATMs, which offer you to "conveniently guarantee a fixed exchange rate", which can be over 10% of the amount retrieved and - needless to say - which you should never accept.

They do the same for US cards. EU regulation states that you need to at least give this choice for a consumer, and they cannot force you to take bad exchange rate. If I recall correctly EU might have given a slap on the wrist for AirBnB, as an US company, for not complying with this and forcing to pick bad USD rate. (I do not have source now, on mobile). So overall I think we can agree EU system with regulation is vastly better and less crooked for anybody else expect card issuers and payment processors.

I was talking about prepaid debit cards which are basically gift cards.

You also have proper debit cards without fees and anonymous: https://www.nerdwallet.com/blog/banking/nerdwallets-best-pre...

Why should you have to?

Once upon a time the customer was always right. A business was supposed to serve the customer's needs and did what was necessary to achieve that. Now the business can insert multiple middlemen with commissions and transaction fees and the damn customers can just fall into line. Sharpish please, and no complaints or we'll close your account.

Do we not see a problem travelling down this road? Or do we have to return to barter and hacksilver to decide perhaps cash was useful?

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

Like the bit says, even when the phrase was becoming popularized, people saw the inherent flaw in it.

The customer is right, within reason.

You are complaining about a cashless business, one that won't accept the minted currency of the nation.

Which could be a fair complaint.

But if we are to hold to the maxim that the customer is always right, then if I insist on paying in bits of string, then I'm right. If I insist that the value of what I'm taking is far less than you think, then I'm right. At some point, you have to admit that there is a line.

And businesses don't want to insert middlemen, they're dealing with them just like we are. But they're getting to the point where the cost of dealing with those middlemen are less than or equal to dealing with hard cash.

Like most adages and slogans it's the core idea that matters, not to take it so literally as to ignore fraud or allow payment in string. The idea being the business should try and meet the customer's needs.

Businesses do want to insert middlemen where they can externalise something else. Either to move another cost or process to the customer or to reduce staff. We've seen the near abolition of customer service by adopting customer service departments that move the activity onto dedicated, and lowly paid staff or outsourced entirely.

For most of the fifty years since Visa started businesses have been expected to take credit cards, even though they cost more to process for all that time. In the UK business could not charge extra for taking cards. The second cash costs more it's OK to abandon it and go Visa/MC only?

Yes, it seems they do want to insert middlemen. Visa of course are encouraging this.

> The idea being the business should try and meet the customer's needs.

But they're choosing their customers with this action. If you can't buy stuff from them, you are not a customer.

> For most of the fifty years since Visa started businesses have been expected to take credit cards, even though they cost more to process for all that time.

Because those were the customers who were spending the money. They didn't have to, they chose to. I mean, it wasn't that long ago that fast food establishments refused to take them. That is a recent change.

What's the benefit of inserting the middlemen?

There are plenty of legitimate reasons for a business to not want to take cash (employee time in cash handling likely adds at least 5% in payroll overhead, theft can also be an issue in retail at least).

You may want to pay in bitcoin, nickels, or with bushels of corn, but that doesn't mean any of them are practical or desirable for the business owner on the other end.

Having to deal with the elderly or disabled adds overhead from employee time or premises adaptations. All that changes is the disenfranchised group. All should be considered discrimination. Maybe it's the European perspective but I welcomed it when the UK required all premises to be wheelchair accessible, even though I am able bodied. I'd equally welcome making accepting the country's currency mandatory as I don't believe society should be excluding any significant groups.

Another reductio ad absurdum? Like I replied to bena before you, with well known adages and slogans it's the core idea that matters, not to take it so literally as to permit payment in corn. Corn is not the currency in general use, cash is. Do you take every slogan and adage entirely literally?

>Corn is not the currency in general use, cash is.

No, it isn't. That's the point.

When you don’t deal in cash, you don’t have to worry about robbery either at the store or during the transport of the momey to the bank.

>Why should you have to?

This is going to sound glib, but I assure you that it's offered genuinely: you don't have to do anything.

Until such point as all businesses have achieved cashless and there is no choice in the matter left, for anyone. That's the stated endpoint of this game. Why do you think Visa are offering $10k prizes for businesses that can go fully cashless? It's not for the customers.

I would make a point of not supporting such a business but if I'm in a minority and cashless catches on...

It's fashionable to regard de jure and de facto outcomes identically, but I don't find such arguments compelling. It's a distinction that matters.

Further, I'm in the minority on a whole bunch of topics, but that's not evidence that a harm or an injury has taken place.

Which is why we need legislation to prevent exclusion of significant minorities be they the disabled or poorer people. I'm more than comfortable for businesses that wish to trade on the high street to be required to fit a ramp to their doorway, inductive coils for hearing aids, and required to take cash.

If we end up cashless it will be the poor and elderly who will have the most difficulty. Even now, well over 10 years after the switch, it's reasonably common to see elderly folks in supermarket or bank struggling with chip and PIN.

Visa has a vested interest in that though.

The thing we're dealing with here isn't Visa, it's the businesses themselves. They've reached a point where dealing with Visa is cheaper than dealing with cash.

Including eat or breathe.

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