This report from a Florida television station:
A 2022 Pew Research study shows 41% of adults in the U.S. don’t use cash for any of their purchases in a typical week.Now more and more businesses are requiring people to pay using only their phones, debit or credit cards. It’s a trend that gained momentum during the COVID-19 pandemic.But state Rep. Joel Rudman, (R) Navarre, wants to make sure cash is still king. He is sponsoring a bill in 2024 that would require Florida businesses to accept cash.“If someone owes you $10 and they come in with a $10 bill, by God you should take it,” Rudman said...Tropicana Field and AMALIE Arena in Tampa are both cashless facilities, something Rudman said he was surprised to see.“If I have the cash in my wallet to cover the cost of that meal, to cover the cost of that purchase, I expect that business to accept legal tender for all debts public and private,” he said.The Federal Reserve said a private business can refuse to accept cash since there isn’t a federal law requiring it. It said states are allowed to pass laws to do so. Miami-Dade County has an ordinance requiring businesses to take cash.
Interesting.
Last year I was out sofa-shopping and popped into one of the "Five Guys" in Belfast for lunch and was mildly amused that they don't take cash.
ReplyDeleteAs ever there are two sides to this. A society going cashless (since there's no point to cash if you can't spend it anywhere) will make it harder to launder money (but by no means impossible) and be a boon for tax collection, but even in the affluent West there are homeless people who don't have bank accounts. So going cashless will be detrimental to the homeless. Right?
Should we make policy based on a fraction of a per cent of people who'll be disadvantaged, i.e. the homeless, political grifters and gangsters? Or do you make sure the homeless have access to bank accounts or, ya know, fix the homeless problem?
At least in the UK, homeless people can get bank accounts, collect government benefits etc.
There's a reason GOP politicians don't want to see a cashless society and it's not because they're worried about the homeless.
There is a reason Democrat politicians want to see a cashless society and it has nothing to do with lack of concern for the homeless.
DeletePlease continue. "The reason is..."
DeleteIf you a required to have a phone and associated apps to function in society, then you are much easier to track and control. See what has happened in China over the last 10 years, and how it was used by their government during the pandemic.
ReplyDeleteAbsolutely true.
DeleteNot to mention the cost of buying the phone, then paying to keep it active and working.
DeleteAmerican business owners will basically have to pay their staff a wage if all the tips are electronically received.
ReplyDeleteMost western countries do not do tipping, they are clever enough to factor the staff' wages in their pricing.
I remember back in the early 80s, I was driving taxis to help pay our mortgage when the interest rates went sky high,
picked up some American tourists from the airport into Auckland central and ... lol ... the look on their faces when I said 'We don't take tips here'.
One of my doctors offices has stopped taking cash.
ReplyDeleteThere's another side of this that isn't being talked about. If I pay with cash, there's no 4-7% 'tax' from Visa/MasterCard/AmEx/Discover. It strange how virtually no one seems to care about these leeches that attach themselves to every cashless transaction. Plus, I know most people don't seem to care, but I'd like the ability to purchase any legal product and not have to worry about who's watching my transaction. We already have a problem with Visa declaring themselves the moral police of the internet by refusing to do business with legal adult industries. I don't know about anyone else, but I don't want a single corporation to have the power to deny me doing business with an entire legal sector of the economy because their executives find it morally objectionable.
ReplyDelete1. "4-7%": Average interchange fee is 1.19% for debit cards. Closer to cash than to credit cards. https://www.federalreserve.gov/paymentsystems/regii-average-interchange-fee.htm
Delete2. Financial institutions incur significant costs to provide this service. It's made worse by fraud. Even for debit card transactions, where theoretically the money is there, the malefactors know how to game the authorizations to get more money out of an account than is there. Lastly, Regulation E is very preferential to consumers. Even if you write your PIN on your debit card and leave it on a bench somewhere, and someone takes it and cleans you out, you will only lose $50 if you report it in a timely manner (within 60 days), and the bank is left holding the bag for the rest.
I'm all for interchange fee reform, it's a race to the bottom as it stands now. But we can't get carried away and ignore some of the underlying reasons why the fee exists in the first place.
Source: work for a financial institution.
Thank you Kyle for providing some concrete information. Appreciate your informed opinion.
DeleteWhile I agree in general that [at least retail and customer service] businesses should accept cash, I think nobody in comments has mentioned that cash as well is not without it's costs and risks.
ReplyDeleteThis is fairly good article from a more respectable source than myself:
https://hbr.org/2014/06/the-hidden-costs-of-cash
Main thing is - cash handling itself costs money for a business. You need to have safes, guards, counting procedures. Operating high volumes of cash means you have to have essentially your own private army to protect it.
And bank or money management company will charge you for cash handling.
Quoting article:
For businesses, paper money has to be managed: it must be stored, guarded, and accounted for. It can be difficult to transport and is inherently insecure. U.S. retail businesses lose about $40 billion annually because of the theft of cash alone. This cost is also disproportionately borne by mom-and-pops, many of which operate in poor neighborhoods and rural areas. These cash-dependent small businesses cannot afford sophisticated security and cash transportation services.
Also - if you need to withdraw/deposit cash from/to ATM you might have to pay a fee. If you need to cash a paycheck then again you may be stuck with a fee. Article mentions that too:
For individuals, cash usage imposes a regressive tax with the highest impact on the unbanked. By FDIC estimates, 8.2% of U.S. households are unbanked and 20.1% of U.S. households are underbanked. The unbanked pay four times more in fees to access their money than those with bank accounts, and they pay $4 higher fees per month for cash access on average than those with formal financial services.
Also the risk of armed robberies increases dramatically if your cash register tends to have lots of cash.
P.S. Depending on the way how cash is handled at register - it my be more traceable than you think. If cash register before accepting your banknote first runs it through counterfeit detector, the newer fancier models may even track serial numbers of bills, same goes for ATMs... Yes it is not a common database [yet], but it might become if some bill/law/mandate/regulation is passed.
P.P.S. I am from Latvia and here statistics are like this:
For a physical person (meaning - a person walking into store/filling gas/etc):
23% of payment amount is in cash
67% cashless
Oh no need to worry about any /single/ corporation. There are already /multiple/ corporations willing and able to do that. And already doing it to the extent they can get away with. Google, Amazon, banks, credit card companies, Paypal and friends, social media, gaming platforms...
ReplyDeleteAll not just willing but eager to meddle. Visa is only unusual in having a 'moral' objection. Profit alone is a good enough reason for almost everyone else.
I think you /have/ to assume an adversarial relationship with almost every large corporation you have dealings with. By default, you owe them less than nothing.
I see a somewhat opposite thing going on here(NY). Businesses who take both will give a 'discount' to those paying cash. Basically punishing those who use card.
ReplyDeleteWhen I get takeout from restaurants that offer 5-10% discounts for cash, I usually assume they are hiding income from the taxman.
DeleteThere's a quasi-legitimate explanation for this behavior. Card network agreements disallow surcharges for using a card, but they do not disallow discounts for alternate payment methods. The fact that the card companies can dictate something like this, combined with their oligopoly power, allows the continued inflation of interchange fees and rewards programs, and is one of the areas for potential reforms I alluded to in my earlier comment.
DeleteThat said, I'm sure plenty of businesses also have less legitimate reasons for this preference, and may be willing to split the proceeds...
Cash discounts used to be solely tied to tax evasion. Back then, credit card agreements required equal pricing. That eventually fell by the wayside, as noted above by Kyle. Today, cash discounts reflect passing on savings to the customer and a smidge of tax evasion.
DeleteDeciding *not* to take cash as a business is mostly, IMHO, about avoiding the costs of handling cash - having to have cash on hand for change; moving cash; protecting cash from your employees and from third parties. Those expenses are big enough for many large organizations to justify the switch, no conspiracies required. (Of course, that doesn't mean they're not out to get you.)