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Comment by bigiain | Hacker News Reader

"I would assume that a majority of that revenue is through a card."

Really? I almost never use a card for café type purchases. Maybe if I were buying a meal, but for a coffee or two I'm 99% likely to use cash.

(Note: mine is an Australia-centric view, perhaps things really are very different in the USA?)

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Yes. The vast majority of payments I see in Starbucks in the US are via credit cards (or debit cards). With modern PoS systems, paying via card is faster and more convenient than cash, not to mention other benefits (rewards on cards, being able to better track spending)

I used to work at Starbucks (albeit going on 5 years ago) and although I don't have the exact statistics or a perfect memory, it was not a "vast majority". If I had to guess, I'd say probably something like 2/3. Maybe the ratio increases if you count Starbucks gift cards.

Either way you look at it, Square's transaction volume surges with this deal. Good on both parties.

2/3 is kind of a vast majority; it means twice as many people are paying with cards than not.

My wife actually thinks it is rude to pay with cash or check when people are waiting behind you in line. Cards are the fastest way to pay, you don't even have to sign for purchases under a certain amount.

You don't enter a PIN? That process easily makes it take longer than cash.

What? Perhaps if you have down syndrome, but otherwise takes around 5 seconds. Swipe card, enter 4 digit pin, press enter. Faster than it would take the cashier to type in the amount you just gave him, much less make change.

Down Syndrome? Really?

In any case, plenty of people do struggle with it- the old especially. But that's not the biggest factor. With a swipe everything is done by one person- the cashier. PIN entry requires a back and forth between customer and cashier, and I've seen plenty of cashiers not notice that the PIN entry has gone through, etc.

No PINs for credit cards in the US.

Not for coffee-sized amounts at major coffee chains, no.

Debit cards require a pin, but credit card transactions less than some amount(I think it is $10) don't require anything other than the swipe.

Many debit cards can be processed as credit cards and then don't require a pin. My bank actually encourages using the debit card as a credit card by offering more points per purchase when you do it.

We don't need to enter the PIN for most of the credit cards or debit cards in India, but we do have to sign it. Although it's just a formality. Usually when we split the bill, one of us signs all the receipts. :)

Now that being said, we get an SMS on every transaction, and for online transfers, we have two factor authentication using the mobile phone. We can call the bank any time to report a stolen card and would be covered for a fair amount of money depending on the account, as long as you report it within 24 hours as I remember.

To add to this, often cafes enforce a minimum transaction size, such as $10, to use card. This means usually you only use card it you are grabbing lunch as well.

Starbucks don't.

I've read before[0] that it is actually a violation of a stores terms with Visa to enforce minimum transaction sizes. Those stores could potentially be reported to Visa and have sanctions placed on them (like an increased transaction rate). Interestingly, a merchant is allowed to offer a discount to people who pay by cash but they can't charge more for people paying by credit card.

[0] - http://www.msnbc.msn.com/id/11697094/ns/business-consumer_ne...

After the credit card reform act went through in 2010, the card companies now allow for a $10 minimum.

http://consumerist.com/2010/09/amex-visa-mastercard-all-give...

Yeah it is annoying really. Especially for anywhere where it is common to buy things under $10. I think in the end most businesses would be better off just taking the fee hit as they would likely see increased business.

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