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Comment by TheChaplain | Hacker News Reader

The transaction costs are unfortunately not negligible for small vendors, they don't have the power to negotiate like Walmart et al.

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Cash has transaction costs too, and those are already built into business pricing:

1. Time spent by staff counting and reconciling cash after close of business or at the end of a shift

2. Time spent on bank runs or on an armoured car service that picks up your cash and deposits it at the bank

3. Banks actually charge businesses cash-handling fees for both providing and receiving large quantities of coins

4. Safes and other security mechanisms for keeping cash on your premises

5. Higher insurance premiums when you have lots of cash on hand

Businesses that completely eliminate cash also eliminate these costs.

Re 3. our UK bank charges us to deposit any cash not just coinage.

The cash (notes) is deposited by putting it in a machine at the bank. I guess withdrawals of cash are so small now that they want to restrict inputs of cash to avoid their own handling costs.

I don't know why this is downvoted, anyone who has ever worked in retail knows it's true.

Blame reward cards and a lack of regulation on interchange fees. Stripe charge 1.4% for European cards, but 2.9% for non-European cards. In the UK, a brick-and-mortar retailer with fairly modest volumes can pay as little as 0.35% for debit card transactions; factoring in labour costs, it's often cheaper overall to accept cards than cash.

Stripe and Square are the not terribly expensive, we use both, and they're the cost of doing business past 1992.

2.9% plus 30 cents (in the case of Stripe) is pretty darn expensive, your effectively paying 9% in fees on a $5 transaction. Better processors have slightly lower percentages (~2% & $0.05 to $0.10) but they're often a pain to work with and have a variety of hidden booyah fees that drive up the cost (PCI compliance fees, statement fee, requiring a wired internet connection for a credit/debit terminal).

Large chunks of the US still operate primarily in cash to avoid these fees and presumably some taxes, SoCal is a good example of an area where using credit is often discouraged (even Kroger is not accepting Visa!).

Stripe is 2.9% plus 30 cents, which I assume is a bad deal for the vendor if I'm buying a $0.60 bar of chocolate.

IME vendors simply pass the charge along to consumers these days, esepcially for small purchases.

Specifically, they pass it on to all their customers, not to only those customers using cards (doing so is against the merchant-processor agreements). i.e. those using cards are in effect increasing the price for those not using cards.

in many places in europe there will be a surcharge added depending on the type of card you’re paying with.

And in some places in Europe that is illegal. At least here in Finland adding any hidden fees to a retail list price is illegal (meaning that VAT is already in the sticker price too)

I have never seen that happen anywhere in the EU.

It still happens in UK (some small businesses) but AFAIK [1] it's no longer legal.

It's a massive problem for businesses with lots of small transactions, if you're selling a £2 coffee and the CC processor charges 30p + 5% per transaction. Previously nearly no-one would pay the extra, now you have to cover it; so you make the coffee £2.40 ... but the large retailer with a blanket 3% transaction cost (or whatever) can undercut you by quite a lot.

https://www.theguardian.com/money/2018/jun/17/credit-debit-c...

This was banned across the EU in January (providing both the retailer's and purchaser's banks are in the EU). In the UK they extended it to all payment methods (PayPal etc)

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