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Comment by woobar | Hacker News Reader

> ends up costing 2-3% more than it would otherwise

This is a very simplified view. Cash handling is not free. Fraud levels with cash are different. Overall attractiveness of a small but cash-only business is different.

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The alternative to credit cards that charge 2-3% fees shouldn't be cash, but rather debit cards with close to zero fees.

Cash handling isn't free, but a digital transfer that doesn't have rewards is obviously cheaper than a credit card.

if the credit card merchant was able to extract 2-3% for using their network, what makes you think that a free debit card with low/zero cost wouldn't also be owned by the same credit card merchants and force the same fees to maintain their monopoly?

Because right now debit card purchases don’t have a transaction fee while credit cards do. I just had two recent purchases where the vendor charged a 3% surcharge for credit cards but would do the transaction by debit card free.

It is an example that greed is everywhere. Not only among card issuers but also among merchants. The moment merchant find a socially accepted way to extract extra they will do it. Similar to tip screens on square terminals in all takeout places. Costs nothing to ask, generates some additional revenue.

Because in the US we already have laws that cap the fees on most debit cards: https://www.ftc.gov/system/files/documents/plain-language/bu...

There's even a proposal to drop these fees even lower: https://www.reuters.com/markets/us/us-fed-set-revise-debit-c...

Europe has similar laws capping the fees on both credit cards and debit cards. We could do the same and it would work better for everyone except the credit card companies.

Debit txs are not free. For big ($10B in assets) regulated issuers they are pretty low, but for everyone else they are close to 1.9%

[1] https://usa.visa.com/content/dam/VCOM/download/merchants/vis...

Debit cards get arbitrarily rejected. Some gas stations won't process them. The IRS ID verification for Covid stimulus wouldn't work with debit.

There is a reason every concert and sports venue near me has gone cashless. It's not because they enjoy giving away 2-3% of their revenues but rather those places aren't active every evening and tend to turn over employees quickly. Handling cash is expensive and risky in that environment.

In a concert and sports venue concessions environment you're also prioritizing throughput much more than most businesses. Being cashless helps with throughput a lot - the employees don't have to wait for people to count their money, then recount it, and spend time making change.

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