FYI, handling cash has fees to "third parties" too.
In a lot of cases it's a lot higher than just taking card.
In a lot of cases it's a lot higher than just taking card.
But Visa and Mastercard effectively set the rates, and the higher they are, the more issuer business they get; meanwhile merchants are essentially never in a position to reject either Visa or Mastercard (notable exception Costco confirming the general rule), so market forces are pretty one-sided.
I think if Visa and Mastercard were three-party networks like Amex or Discover (now Capital One), their interchange would have long been regulated down by >90%.
French companies pay social contributions (~45% of the full salary) via Visa and MasterCard, and the French authorities are making it nearly impossible to pay these by wire transfer.
It's also worth noting there are also huge fixed costs for credit card transactions. We're currently upgrading our pinpads and it's been an absolute nightmare to get the right parts in just for physically connecting the damn things to our counters, we lost almost a whole day of backend POS access for our vendor to push a required update, and I'm looking at more fees to be able to support other types of cards which require POS certification.
We strongly prefer our customers use cash.
Couple that with inertia. We couldn't go cash-only even if we wanted to without pissing off a lot of our customers and losing sales. We only recently decided the cost of check fraud outweighed the push back we knew we'd get if we discontinued accepting personal checks.
We're a community-owned business with a fiercely loyal customer base. When we tell folks what payment method is cheapest for us, many will actually choose to use that payment method just to help us save money.
The costs to handle cash are fairly low. He bought one of those fancy cash counters like they have at the bank for a few hundred. He also bought one of those cheap little ATMs for perhaps $500 and charges $1 to take out cash. He keeps $2,000 on hand at all times between the safe and the ATM itself. Otherwise, he just stops by the bank two blocks down the street to deposit profits. As for security, well, they just carry concealed weapons.
The ATM paid for itself in the first month, presumably also the cash counter machine. Notably they did have one counterfeit $100 come through that they forgot to scan. I suppose that’s novel to cash although chargebacks on cards also do occur.
But this is just my anecdotal experience, do you have actual numbers/statistics on this?
The only people who think it's cheaper are those that value their time at 0.
Cash is actually faster in many cases, the 'slowness' is the matter of perception and the need to make a cognitive operation of 1st grader counting, which is apparently a daunting prospect for many people.
And even if it were slower by 20-30 secs, the advantage it gives in control and privacy is such enormous that I don't understand people who use banks at all.
The last thing other people should know is how, where, and when a person spends their money. And due to the AML surveillance from the discussed article the banking privacy is practically dead.
I never spoke about speed.
> the need to make a cognitive operation of 1st grader counting, which is apparently a daunting prospect for many people.
Don't be a condescending prick. The fact that counting exists at all is a cost that people don't measure.
> due to the AML surveillance from the discussed article the banking privacy is practically dead.
Or if you read the fine article you would realise that AML rules generate so much noise that there isn't any analysis.
Which is even worse, since the only practical use of that data is now selective enforcement and/or parallel construction.
Not to mention the constant hassle such laws have for regular folks trying to transact in cash while barely being a speed bump for those engaging in actual money laundering at scale.
> The fact that counting exists at all is a cost that people don't measure.
When cash skills were common and regularly utilized, the average cashier could count out most change in about the time a card swipe or dip happened. Tap makes it considerably faster though.
Today I agree - the average cash handling skills are effectively nonexistent to the point I comment on it when a cashier understands how to count back change correctly, much less do it from muscle memory.