" On average, each cash-using household pays $149 to card-using households and each card-using household receives $1,133 from cash users every year. Because credit card spending and rewards are positively correlated with household income, the payment instrument transfer also induces a regressive transfer from low-income to high-income households in general."
Cash has high costs that likely make electronic forms of payment competitive.
You have
- Employees skimming the till;
- Theft insurance for a safe, the nightly amount in the safe
- Managers balancing the cash registers with change/safe
- Armored trucks picking up the money (2-3 men guarding the transfer)
- Banks processing the money
- Employee time and frustration ensuring they didn't come up short
tldr; It takes one armed robbery or employee malfeasance before ~2% fees seem very much worth it to reduce cash on hand.
To add to this, back when I was a retail cashier in high school, there was also the threat of having too much money in the register. Either by negligence, due to miscounting a customer's change, or of outright malevolence (by doing the same). Before I even began training at the register, I was told by the store manager that if the cash in my drawer at the end of my shift was over the amount that the transaction history specified I should have (I believe this was > ~$5 lifetime? It's been a few years so I'm foggy as to the exact figure) that I would be let go.
Now, I don't mean to bring this up to debate the point one way or the other, just that it is yet another friction to managing cash as opposed to credit cards.
They would do it 10 times and pull $40.
Also just because cash has costs doesn't mean credit card fees aren't insane. They could be close to 0% if they implemented real security to reduce fraud, and there was actual competition (vendors were allowed to pass fees on to customers).
The big savings come when you have zero cash to deal with. Then you have no counting/change/armed transport/security issues at all.
I just spent 2 weeks in Spain and there were many places I tried to eat that were cash ø ly.
In Chinatown in London, as well, many places are cash only.
"outside the US" is a big place, be careful to be more specific.
I did not mean to say all places outside the US
Practical, still a bit weary though especially without EMV readers
For everything else, yes, mostly cards
I normally have a few may 100 to 200DKK in my vallet, because the credit/debit card system do still fail. I haven't run into anything in the last few years where I could pay with card or mobile payment.
Since 2015 Berlin taxis (note this doesn’t apply to the rest of Germany) are required by law to accept EC cards and at least 3 different credit card networks (which in practice means Visa, MasterCard and AmEx). If the reader is not operational they‘re comitting a misdemeanor. Best advice is to not pay and ask them call the police if disagree - usually the machines magically start working again.
Why are the drivers lying about it? The fee they‘re paying is relatively high (about 3%, but it‘s somewhat offset by a 1.50€ surcharge) but more commonly they‘re are either trying to avoid taxes and they‘re using someone’s taxi without holding a license themselves.
Where? Was in Barcelona recently, even the 1€ espresso in a random cafe was paid by card.
Tourist places usually take cards, but the "local" places I was visiting often didn't.
https://www.dmagazine.com/business-economy/2018/07/why-some-...
Didn't hesitate; called the area manager and told him the facts and nothing more. Never saw her again. Don't skim from your co-worker's till.
It needs to have real transaction authentication so I don’t have to deal with fraud and it needs to decline transactions when I actually don’t have enough money in the account (instead of charging $40 in fees.) That’s it, but no one seems to offer that so I use cash instead.
I have a Citicard that generates one time virtual card numbers for online payments. It's a really neat idea but with a painful interface that makes it impractical. I'd like to get a virtual number for each merchant that has a user configurable credit line and can be used multiple times. That way I'd have a unique card on file with each online merchant, with its own credit limit set by me.
50% of the country is broke, 80% live pay check to pay check.
Many working minimum wage, low income bracket do not have bank accounts.
The idea that cash is ‘hard to operate’ is a stretch, we’ve been exchanging currency for as long as commerce existed. If you handle enough cash to need an armored truck, you are far above most businesses in processing.
There are a few places in NYC that do not take cash, and they exist in their own micro economy revolving around serving lunch.
what is meant by this? is this the often cited "50% of Americans don't have any savings" number?
in savings accounts only
[1] https://www.unitedwayalice.org/methodology [2] https://www.unitedwayalice.org/in-the-us
It’s pretty simple these days. I’m pushing a household income of close to 200k and I haven’t been on vacation in 3 years.
I could make a shitload sure, drop the wife, move into a studio and eat ramen.
All I was saying above is that I am not surprised that a large fraction of households _are_ in that bucket as defined in the United Way report, because child care is expensive. And I expect the fraction of households in that bucket would likely be a lot smaller if "child care" were not being included in basic life necessities.
I am not going to comment on your personal financial situation; you are obviously a better judge of that than I am! I certainly know people with 200k household incomes who also have significant fixed expenses (student loans, medical expenses, whatever) that lead to them not having as much disposable income as one might think. But that's not really related to the United Way study.
When I eat with a group of people, it's very common that I'm the only one who pays cash. It's also very common that taking care of my bill is the fastest of them all. It's easiest on the wait-persons time. But since the owners generally fuck over the wait staff anyway, it's no surprise that they don't care about their time.
More restaurants need to start adopting handheld terminals for waitstaff, which reduces the whole process to 1 step and makes it faster than cash since they do not need to go fetch change.
In addition, with cash, there is another abstract (collective) benefit. It is anonymous. An entity can neither trail a single dollar bill as it moves through individuals, nor arbitrarily prevent certain individuals from spending. Electronic forms of payment are less free and less secure from a very broad social standpoint.
My MasterCard is 2% cashback (through points, but that just means I batch it), but has an annual fee of $150 for two cards, and a minimum household income. I need to spend $7500 on the card just to break even, but if I funnel nearly all my expenses through the card I can net $1000 or more a year.
These "rewards" come from the merchant, in the form of higher fees, and because the merchant can't discriminate prices between credit/cash (probably in the CC t&c somewhere) then if the merchant wants x% profit from me, they're earning >x% from someone paying cash.
(I think they used to exist, just not any more)
It looks like there are still a few: https://www.moneysavingexpert.com/credit-cards/cashback-cred...
The most you can get these days seems to be Avios or Amex rewards points.
Heck, when MBNA recently lost all it's airline business, the card they switched you to is actually quite decent. A bit of cashback and free Mastercard rate foreign transactions.
I'm not really, but I did do this earlier. Looks like there are about half a dozen available in the UK, only two appeared to be fee-less, the best one being the ASDA Visa which gave 1%.
They seem to be a rarity these days.
I am not aware that fees are caped. In fact last time I checked the fees from payment processors (like barclaycard) for a transaction online was in the region of 5%.
Not many AFAICT, and of those that do it's not a lot (Amex platinum have a 5% intro offer, but it falls back to 1% after three months).
Plus most of them seem to have annual fees. Weirdly enough the best one appears to be an ASDA credit card which gives 1% and has no fee.
Actually, everyone uses Dutch debit cards with Chip+PIN. Colleagues and I had trouble using debit cards from other EU countries on our last visit.
I spend significant amounts of time in Europe each year (multiple months) and some of my US credit cards don't charge foreign transaction fees and also earn cashback on transactions done in Europe. I'm wondering who is losing money here - the merchant or the card issuer?
Based on this, I believe it‘she merchant who‘s picking up the tab here.
If you’ve got a card that pays more than 2%, sure, it can make sense to pay fees.
https://www.greedyrates.ca/blog/best-cash-back-credit-card-c...
[1] Citi Double Cash
[2] Fidelity Rewards Visa
The AX card rebates 6% on groceries, 3% on gas, and 1% on everything else. The Visa pays 2% on everything else. No silly quarterly schedules on changing categories of spending.
Therefore, groceries and gas go on the AX Blue, and everything else goes on the Visa (which used to be an AX card, oops, AXP!). And, of course, both cards get paid off in full every month.
If you travel for business a lot, there are a dizzying assortment of deals. But I no longer do, so the above seems optimal for me.