Almost every comment is about politics, choice, privacy, rights,
markets and percentages.
There's a completely different take; Civic resilience
From an operational and strategic security POV, cash is a vastly
superior technology. It doesn't need electricity, a network of cables,
satellites and routers.
Therefore cash in circulation acts as a buffer that provides economic
stability and continuity of operations.
Also, take a look at a modern European bank note, like we have in the
UK. It's a sophisticated technology. It's not like we still have
Roman coins that any blacksmith can forge.
There are many good, but more subtle reasons for preserving the use of
cash, and regulating business practices if necessary to do so.
>From an operational and strategic security POV, cash is a vastly superior technology. It doesn't need electricity, a network of cables, satellites and routers.
If the power goes out, I can't get any cash. I don't keep any meaningful amount cash on hand and neither does anyone I know, including my elderly relatives. Most of the stores I shop at won't actually be able to sell me anything, because none of the products have price tags and I sincerely doubt that any of their staff are trained to revert to pen-and-paper accounting. Even if they did manage to keep things running, they'd likely run out of change by the end of the day. The grocery stores are JIT and have no more than a few days of stock of anything; again, I doubt there's a manual backup to their reordering system.
Maybe things are different in countries with less reliable infrastructure, but I just can't think of a scenario in which cash would gain you any appreciable amount of resilience without much wider systemic changes. So much other stuff beyond payments is wholly reliant on technology. I'm not sure that would be a wise investment versus improving the resilience of power distribution and network infrastructure.
>> If the power goes out, I can't get any cash. I don't keep any meaningful amount cash on hand and neither does anyone I know, including my elderly relatives.
Well, that is well on your single data point, here is mine: I live in a bad weather prone area of the united states. I do not know _anyone_ that does _not_ have a meaningful amount of cash in the house for bad weather. Yes, stores here operate with low/no power or communications and use cash. I agree with the poster who noted that it provides a localized resilience. It is your fault, not anyone else's, that you do not have some currency.
Truth be told, I have kept about a weeks worth of spending in cash for decades in the house, just in case, and I have indeed had to use it during long term power outages. Heck, in my area just last week, all of my banks ATMs were down for the entire week due to a software issue after an upgrade (I am not making this up). While I might not have needed cash, it shows the fragility of our systems we rely on.
I think you might be surprised by how many larger stores and grocery stores especially are prepared to operate in low power or no power conditions if necessary.
Another side effect of this DC rule will be to ensure that more are prepared too.
Have you never walked into a store and they said you can't use a CC because their reader is down? It is nice to have a few dollars in your pocket for times like that.
> I don't keep any meaningful amount cash on hand and neither does anyone I know.
That's your choice, not a problem with cash
> Most of the stores I shop at won't actually be able to sell me anything
But many other stores will
> ... by the end of the day
Often, it is all that is needed
Not all outages are apocalypse scenarios. Sometimes, it is just about finding something to eat for the night, the kind of small things that add up in an emergency situation.
Take the 2011 Sendai earthquake and tsunami for instance, it caused big problems like flooded cities and the Fukushima disaster, but it also caused small problems for millions of people, power outages, stopped trains, etc... These people had to eat, sleep,... while most of the infrastructure was down, it got better the next day, but in the meantime, it is good not to have to worry about millions of people being able to buy their meal when thousands are in need for immediate assistance.
In that case, it might be wise for you to withdraw some cash now (depending on your financial situation). I keep a couple hundred in crisp bills of varying denominations in a go bag.
It isn't just for infra failure. When your credit card provider cuts you off for "unusual activity" that they won't go into detail about, and you realise they are free to refuse you business as they feel like - you'll appreciate cash while rushing to find a new provider as existing debts still loom.
I live in the US. I keep a couple thousand dollars in cash at home for emergencies, and in my part of the US if the power went out there are a number of stores that could continue operating.
It's probably worth keeping some (few hundred dollars maybe) cash around for a variety of reasons. But pretty much no store is going to be able to (or at least try to) sell you anything if they don't have power--the most likely scenario. Maybe some emergency supplies in a natural disaster but I pretty much guarantee you my local Walmart is closing its doors if there's no power.
And, as others note, CC readers in an individual store do go down though I probably won't have much cash in my pocket even if I have some at home.
Regarding resilience, and no need for electricity, and network:
In Hungary currently it is mandatory to use networked cash registers for cash transactions and centralized digital reporting system for issuing invoices. There are some minor exemptions, for farmer's markets and some similar specific niche very low volume cash transactions.
I know about no disaster protocols. (though the Hungarian mindset wouldn't give a damn about law forbidding sales without digital invoice in case of a slightly sustained emergency situation, possibly an outage longer than a day.)
So basically even with cash you might need electricity. (until nobody starts to give a damn)
I support using cash, for the several reasons outlined in the comments and the article. Yet I think when the trust in government/public services starts to break down (as ignoring laws banning non digitally accounted transactions), the trust in cash might also start to break down (though it takes longer imo)
If it is like in Brazil, the tax-enabled receipt printers have onboard memory that stores the transactions to send them off-line if the tax agency's servers are down.
Something that I've learned when I worked with those devices in the past is that the tax authorities do have strong contingency plans.
The problem with cash being a thing that keeps working if the lights go out is that there isn't enough of it in circulation to meet the demand if all the lights go out. Having a bit of cash means that you can still pay for your purchases if one random shop has a technical glitch with their card reader, but if the card payment system for a whole country falls over then there just isn't enough lying around to cope with everything that we want to do. It's a failover system that isn't adequately scaled.
There's a broad space between "a single shop" and "an entire country". Entire cities or states being hit by a technical glitch or a natural desaster (flooding , storms, ...) happens on a moderatly regular basis. Backbone connnections failing and taking certain areas or chunks of the internet population offline is also moderately common. Banks having issues with payouts happens, too.
There are a lot of scenarios where having cash as a fallback is great.
The problem of space of physically securing cash is more stable over time and better understood by non experts than the problem space of securing electronic payments: For example, the costs and benefits of "There is a new innovation in theft, people yank ATMs out of walls with trucks, which you can mitigate by putting up bollards" are easier to understand than "there is a buffer overflow in your logging software that is used everywhere".
So yes, a bulletproof cage is security technology, it works sufficiently well most of the time, there aren't many low-effort innovations to break it (bombs and such have been around forever but aren't used to rob convenience stores often), and if it does get broken it's obvious. Whereas a software exploits can be harder to detect and can be much easier to replicate and scale
Edit - Innovations in physical theft: That Kia/Hyundai car trend, which is really software. The trick bums use to steal blue bikes from docks. Writing threatening notes to bank tellers without any way of making good on the threat because tellers are directed to not fight back. Any more examples?
That's too literal a view. In security thinking we have to consider
the safety of all stakeholders, and the whole
ecosystem/collective/society at large.
This is a good point worth considering, especially given we've already seen the consequences of people and businesses going cashless and a technical glitch throwing everything into disarray.
It was absolute chaos. Most shops and restaurants lost a ton of business due to customers not being able to pay for products (many people here don't have cash in their wallets at all), and many of them couldn't sell even if they wanted to, since the card reader (and other parts of their point of sale systems) also relied on said network.
Having cash as an option at least means things won't completely shut down whenever this sort of error occurs.
On the 2nd week at the beginning of the Khartoum war, the bus companies started to refuse electronic payments and only take cash because they didn't trust the banking system will remain working.
Cash is not resilient in some pretty important ways:
It is vulnerable to counterfeiting which mean citizens lose out regularly as they don't have the means to check all cash is valid as shops or banks do.
Physically it is vulnerable to destruction and cannot be replaced if burned for example, unlike a bank card or other token of identity linking you to your funds.
It is vulnerable to devaluation (in has this in common with electronic cash)
In the event of societal collapse or degradation it becomes worthless fairly quickly, which is the opposite of resilient.
Cash is not at all resilient compared to electronic money therefore, and people are voting with their feet to get rid of it, laws like this will just delay the inevitable for a decade or so.
Bank cards will also disappear pretty quickly IMO (next couple of decades), as they're just a physical token of ownership and not really required if you can rely on say a combination of biometrics to assert identity.
I think it is sensible to keep a few hundred dollars at home. Our infrastructure, while reliable, it is not absolutely impervious to failure. While very improbable, scenarios of a multi-day payments system outage due to ciber attacks or maybe planned downtime in preparation for a major solar flare are possible. And if you think about local outages they are a bit more probable.
But this precaution goes down the drain if no business is ready to accept cash anymore.
Also, having some spare cash with you is useful if you want to help someone who has been robbed or a homeless person.
Cash does need a network and constant checks and balances for foul play.
You need trusted cashiers, need to check every received note to see if it's genuine, then you need to safely deposit that somewhere, the boxes of cash have to be transported likely in an armored truck.
And you still need communications networks for all the checks and balances and automated systems to handle the cash.
It's a massive logistic effort to shuffle around little certificates of value.
> Also, take a look at a modern European bank note, like we have in the UK. It's a sophisticated technology. It's not like we still have Roman coins that any blacksmith can forge.
No but dollar bills are a lot less advanced. They're also all still the same size and color so it's very hard to differentiate them.
For me the privacy point is the most important though.
I haven't outlined any scenarios, but maybe you're considering a total
Internet shutdown. No such drama is needed to make the case.
Deloitte calculate the per day impact of a temporary shutdown would be
on average $23.6 million per 10 million population. Not that bad
actually. But that figure seems based on the immediate hourly
estimate from places like The Uptime Institute and LSE. Other
estimates puts it at between $11Bn per day for the whole USA [0] and
only $10Bn for the whole year [1]. In reality the impact quickly compounds,
making day 2 (24-48 hours) significant worse, and so on [2]. I am
quite sure the aggregate downtime of AWS, Azure, Google and other
cloud services in the past year has exceeded 24 hours per capita
civilian use.
Being able to take cash, as a "flywheel", makes or breaks businesses
in those times.
> It doesn't need electricity, a network of cables, satellites and routers.
But most businesses do. The main issue is there: why should a business be forced by law to accept cash if they absolutely need electricty and cables to work as a business ?
It's one step below forcing them to accept hand written checks. Those are also extremely resilient, you just need a pen and paper. But god no I wouldn't want to deal with them at a car rental desk.
Sure cash should be accepted in shops selling essential goods. But other shops should have the choice.
Let's think about who wouldn't be fine in a cashless economy:
* Elderly people who struggle with technology.
* People fleeing coercive situations like domestic abuse where their abuser controls their finances.
* People with mental disabilities, for whom cash might be the only thing they know how to use.
* Homeless people, who might literally rely on cash to survive.
* Poorer people who prefer cash because it helps them budget and limit their spending.
* People so poor or otherwise disadvantaged that they don't even have a bank account.
That last group is much bigger than you think: by one estimate, 6% of American adults don't have a bank account and another 13% are "underbanked".[0] That's tens of millions of people in the US alone who don't have access to the basic financial services that you and I take for granted.
I have no idea how they do it. I'm not sure how it's even possible to navigate modern life without a bank account, but then I'm an educated, affluent professional who has no idea what it's like to be poor. Just because I don't need cash doesn't mean that no-one else does.
So basically, I think that asking "why should a business be forced by law to accept cash?" is like asking "why should a business be forced by law to provide wheelchair ramps and elevators?" If you don't think the answer is obvious, then you need to check your privilege.
I have a handle on this because I set a resilience assignment to a
cohort of about 20 MBAs at a business school. Specifically I asked for
a representative range of businesses;
- fast food
- gymnasiums and sports
- nail bars and hairdressers
- auto-repair and mechanic/garages
- child and day-care
.... you get the picture, _loads_ of variety.
They did 1 hour, 12 hour, 24 hour and one week case models.
As tech people, we are probably biased to think too heavily about
digital and electronic systems. Many businesses can function in
"survival mode" during a tech outage, including electricity in some
cases.
As I recall, after "telephone", it was payment systems that were the
real killer. Interestingly many access control systems fail-safe simply
locking everyone out of the buildings!
I live in DC and support this law not just from an accessibility standpoint but also from a privacy standpoint. I am tired of every retail/restaurant establishment building a profile of me.
The new "meta" seems to be charging you a tax for not using their loyalty card. Items at Tesco are now significantly more expensive if you don't scan a Clubcard. I suppose it is easier to rotate those than bank cards though
> I suppose it is easier to rotate those than bank cards though
When I asked for a Clubcard a few months ago they said they're not giving out any and you have to use the app.
Funny enough just after I asked I found one on the floor; I'm using that one.
I wouldn't go to Tesco if it wasn't for that, because the price differences are just insane. Before you had the points and whatnot but not the strong discounts (IIRC), then I didn't go to Tesco for a few years on account of being in a different country, and now it's a €3 "regular price" and "€1.50 club card price" for half the stuff I buy. wtf?!
Can you just type in a phone number? In the US, you can always type in the rickroll phone number as a reward card. If it doesn't work, it's incumbent upon you to set up the profile for that store to keep the system going.
I've got three 'cards' for Waitrose as you can get one coffee per card per day and I wanted a few one time. I put the cards in quotes as they are actually images of bar codes on the phone.
Imagine you entering a non-crowded venue and prices on wireless e-Ink tags are changing according to your profile got by face-recognition camera at the front door.
But like serious question, are you tired enough that you'll actually stop using payment cards? Is it worth the inconvenience and losing 2%ish off the top of everything you buy?
If there are any laws we need to pass is that credit card fees should be disclosed on all receipts and optional. Cash buyers should not get penalized for not using a credit card.
I am pragmatic about it, in DC, you will be penalized for not using a credit card as most people do use them and therefore businesses have baked in the fees.
However having the option not to is a very important privilege I feel we should protect.
Believe it or not we do have cash first businesses and I make it a point to use cash with them as they will only charge a fee if you use a credit card.
Without State intervention there's nothing stopping businesses colluding to all go cashless. Or... all together do something else that's bad for us. Or monopolizing.
The strong enough reason is "it's better for the people."
It's easy how we decide whose preferences we mandate - we mandate people's preferences, and businesses find ways to make money within those constraints. There's no issue making profit like this, so I'm not sure where the concern is. Profits slightly dented for a second? Oh well.
I specifically do avoid any business that is cashless. I appreciate any business that puts a sign up claiming to be cashless so that I can specifically avoid doing business with them.
I have no dog in this fight as I rarely deal with cash and do not run a retail business. However from a conceptual point of view I really have a viscerally negative reaction to not accepting cash. It is a societal acceptance of the rent seeking behavior of the credit processing networks. I already have to pay a sales tax to ${TAX_ENTITIES.length} different government entities, I don't love that I also have a 3% tax going to VISA/Mastercard/Amex/...
> I don't love that I also have a 3% tax going to VISA/Mastercard/Amex/...
You don’t. The merchant you are buying from is choosing to pay 3% for credit card payments because they believe incentivizing people to pay with credit cards will result in them earning more (via higher prices or higher margin goods) than incentivizing them to pay with debit/cash.
If a merchant wanted to, it would be trivial for them to give you a 3% discount for paying with debit. In fact, Target gives you 5% off for paying with debit via their Redcard, but I suspect they do not advertise it because they still want their non savvy buyers to use credit cards. And they want to funnel their rewards seeking savvy buyers to the 5% discount since they bet the cost benefit for those people does not work out.
> > I don't love that I also have a 3% tax going to VISA/Mastercard/Amex/...
> You don’t. The merchant you are buying from is choosing to pay 3% for credit card payments because they believe incentivizing people to pay with credit cards will result in them earning more (via higher prices or higher margin goods) than incentivizing them to pay with debit/cash.
Today I picked up flooring from a place that gave a 5% discount for paying with cash or check. Many gas stations around here are around 3% less when paying with cash. At such places you pay extra for the convenience of the card.
> If a merchant wanted to, it would be trivial for them to give you a 3% discount for paying with debit.
I don't believe that a merchant is allowed to do this? Probably very dependent on your deal with credit card processors but my understanding is that the default contract between a merchant and a credit card processor stipulates that you are not allowed to offer discounts to not use credit cards differently.
Of course if you are Target-sized, you get special treatment. My understanding is stuff like Redcard is basically just Target "giving back" their cut of processing fees...
Assuming that's correct, that effectively boils down to the same thing? Prices would be somewhat lower if merchants didn't need to consider the ~3% disappearing in the payment processor.
Target also gives you a 5% discount for using their RedCard. It's your typical store-branded loyalty card. Except, instead of giving you "points" on your purchase you get an upfront discount. Target is unique in that they make this option available through a branded debit card for those that don't want or don't qualify for a credit card. But, it's not a discount specifically for paying with cash.
> If a merchant wanted to, it would be trivial for them to give you a 3% discount for paying with debit.
It makes more sense to me for it to be a surcharge for using a credit card, but the last I knew the credit card companies disallow that in their agreements. Discounts get confusing and bump up against weird cases like minimum advertised pricing and potential taxation on the discount.
Debit cards can get a bit weird when they function as credit cards. A customer may use a debit card but swipe it as Visa or Mastercard and the fees the merchant pay will be different, setting up a constant source of frustration at the register.
> You don’t. The merchant you are buying from is choosing to pay 3% for credit card payments because they believe incentivizing people to pay with credit cards will result in them earning more (via higher prices or higher margin goods) than incentivizing them to pay with debit/cash.
Why are you putting the onus on the retailer? Don't assume malice or intent from them.
I operate online businesses; so 99% of my sales are credit card. I get the occasional wire/ACH or a check in the mail. I'd love to not pay 3% of all my revenue to credit card processors, but most people want to use credit card / PayPal / etc. because it's more convenient for them.
I'm happy to offer a discount if someone wants to pay via a non-credit card, but I don't raise my prices because of it. I just have to suck it up and eat that cost. My margins are not high and I would've made about 27% more last year had I not had to do that. You're welcome.
You're dreaming if you think the merchant is abandoning margins to finance card companies because they bring business he's convinced he wouldn't have had otherwise: he's making everyone, cash payers included, pay the 3% premium, keeps his margin, fattens the credit providers, the credit consumers get their 3% back, the cash payers do not, the merchant doesn't give a damn and is paid his margin as before, plus a bit more for cash payers.
You thought... prices were dynamically changing per acquisition channel, or that credit borrowers were "privileged" because they took a credit risk and got a "reward" coming from... the merchant ??? Man, what a beautiful world that would have been :(
And this practice is super common but it's usually worded in the reverse and more when dealing with business where being able to accept cards isn't a selling point, like your rent or government services. They'll just the 3% direct to you. One of the weirder examples was when paying a fee for a permit I needed. They charged me $x for the service, then $y separately to cover the fee for $x.
> I don't love that I also have a 3% tax going to VISA/Mastercard/Amex/...
People seem to forget processing cash isn't free. If you're small, it's a trip to the bank. If you're large, it's an armored truck. Employee theft is a problem. Counterfeit money is a problem. If we pretend it's 1% instead of 3% (since you can get 2% cash back), 1% for not dealing with the downsides of cash sounds ok.
The EU limits the processing fee to 0.2% of transactions, which solves a lot of the problems with taking cards as a store. Why can't the US? The only downside is less benefits on your credit card because you didn't indirectly pay that 2.8% extra on everything you buy
It'd be nice to see what an actually competitive payment processing market would look like. Merchants seem to have no power in this system and I don't see much effort between banks to compete for business, either. These offerings are stagnant and reflect an effort to keep profits artificially high rather than reduce costs and expand on volume.
I've noticed recently more of the food truck or farmers' market type businesses aren't officially cashless, which is illegal in California AFAIU. They just don't have change for a $20.
It's a real problem that some people cannot afford the fees on a bank account, but I would prefer that we find some way to provide everyone with minimum banking services. Like a no-fee government-provided debit card.
I know, the government doing things is bad, but Wells Fargo, Citibank, etc are so heavily regulated, they are essentially a wing of the government now anyway. Maybe in exchange for being "too big to fail" they could be required to provide all American citizens with a standard, transferrable, no-fee debit accounts.
>> It's a real problem that some people cannot afford the fees on a bank account, but I would prefer that we find some way to provide everyone with minimum banking services. Like a no-fee government-provided debit card.
The government shouldn’t even need to get involved here. In the UK accounts have no standard charge and come with free debit card. There’s no reason banks in the US can’t offer this other than the fact people think paying for an account is normal so they can get away with it. Do the “app” banks like Revolut and Monzo offer free accounts in the US? Curious if they’re bringing some competition that could force change.
> The government shouldn’t even need to get involved here. In the UK accounts have no standard charge and come with free debit card.
Well, in the UK, fee-free basic bank accounts are the result of government regulation(1).
It was part of the UK's implementation of Directive 2014/92/EU (2), which mandated access to basic bank accounts across the EU (of which the UK was then a part).
There are thousands of such establishments in the US. They are called credit unions. And many banks too. Yes, I have a US Revolut account, but not for that reason, but because US banks generally don't know how to send money internationally. For them, civilization ends at the US border :)
There are plenty of free bank accounts that come with free debit cards in the US. People who have paid bank accounts didn't shop around at all. I have no idea how or why these banks continue to do business when there's free alternatives that are usually better in basically every other way as well.
Besides, having to have change is the really big cost of cash handling. Almost all your customers come in with big notes from an ATM and leave with smaller notes or coins, so you have to keep getting change from the bank. Just rebrand "not giving change" as "mandatory tipping" and it's even a pro-worker move!
Big problem is AML and KYC related legislation - this is expensive to do for people who are statistical outliers. I.e. people with low income. So it'd have to be government subsidised banking.
I find it hard to believe it is expensive to do AML and KYC for customers whose balances never cross 5 figures. It seems they would almost never go over any thresholds that require reporting.
Perhaps the free government accounts could be exempted from that red tape, and be capped to a maximum turnover amount such that it isn't attractive to money launderers. Once your turnover exceeds that cap, you have to "upgrade" to a regular account with all the KYC stuff.
I would love to see analysis on the trade offs with KYC and AML. How much does it actually help in fighting crime? Vs. all of the lost opportunities due to all of the red tape and regulatory blockers for legitimate business models.
> It's a real problem that some people cannot afford the fees on a bank account
Plenty of banks offer no minimum checking accounts. Whenever this gets dug into, the fees they supposedly can’t afford are when their balances go negative, which is harder to justify being free.
And those fees are usually egregious and do the most harm to low income people. Why can't these account refuse to go negative during withdraw or spend via debit? It seems simple to me, but then banks could collect fewer fees. I weep for their profits.
Can someone explain to me fees on American banks? And the % card surcharges other comments are talking about? As someone from the UK I've never heard of banking fees except on debt facilities and the only surcharges I've seen are minimum spends or 50p charges on cards in small shops, which almost never happens anymore.
The card fees are on the merchant side and are priced into the overall price in the same way that VAT (usually) is. The customer never sees them.
The fees exist in the UK but the UK never had the cash culture that the US does so very few consumers made a fuss about it. Plus the UK has a much longer history of debit card use than the US.
The US banking sector is less regulated than the UK sector so can get away with adding fees. The UK banks would love to move to the same model but would get strung up by the public and regulators.
I understand those are more expensive than normal accounts on commercial basis, bad value for the money. It's only that the bank cannot refuse to open a basic account because they don't like the customer's business. I doubt a debit card is included. Those accounts are needed because all wages and even social benefits are only paid by bank transfer in most EU countries.
Interesting. I get why you'd want to ban cashless business, but many business in a nearby town with a high crime rate are going cashless because you can't rob a Square reader quite as easily as a cash register.
I know a business that went cash-only for the same reason in reverse: the thieves were doing it via chargebacks saying they never heard of the place. Couldn't win disputes even with video evidence.
You can accept debit cards and not accept credit cards. That is actually really common in Europe. Chargebacks for most CC providers are around $50-$100 now, so you can do it for small items, I wonder who uses cash to buy something that would make a chargeback worthwhile for a thieve? They would have to rotate cards around to get that.
More likely, thieves were using stolen cards, and the chargebacks were probably legitimate (a thief trying to make money on a chargeback would be pretty dumb anyways, since it would be tracked back to their identity regardless, and the bank would shut them down quickly they made an unusual habit of it).
Card in the machine transactions can't be charged back like that. Try explaining that you lost your card and someone with your PIN paid with it, or you got mugged but never declared the theft and want your $10 back. That won't happen.
It looks like many stores cut down on robbery opportunities by not having a cash register. They don't give change back, they only give store credit if you don't pay in exact change. That way, they can just put each cash payment in an envelope and drop it into a time-locked safe. (I imagine that they would do that, I don't know for sure.)
What state/country is this in? I think it's an interesting approach but I have never seen any store in the US (or anywhere else for that matter) that takes cash but doesn't give change.
Tell that to the guy who charged $4k of jewelry on my credit card. I've never been robbed of a penny of cash and now I'm having to sue my bank to get that money back.
If it was a credit card, it was $4k of the bank's money. I presume either you didn't notice the charge or you had a serious miscommunication with the bank, because the normal result under US regulations is that the bank would be the ones trying to get their money back.
Thankfully DC has very low crime so they can instead tackle headline issues like this /s
A congressman was just carjacked in SW DC. The city was really great in the aughts and teens and has gone to shit post-2020. I wish they'd focus on cracking down on crime, which is working really well in NYC.
The answer to that is to help your citizens so they don't need to rob a Shake Shack, not to exclude even more people from enjoying Shake Shack while going surveillance mode on everyone's calorie intake
Not to mention that it's immoral to punish people for have no bank credit, and even leaving aside the ethical implications it creates a split-level society that pushes part of the population further toward desperation and crime.
Banning cash to allegedly keep workers safe is the ultimate whitewashing of corporate greed at the expense of workers and the public. This is a good law.
Instead of banning cashless businesses because it's discriminatory to the unbanked perhaps they should focus on reducing discrimination in the banking sector and providing a publicly run electronic payment system.
In that position, the government would inevitably try to meddle. Look up Operation Choke Point back in the Obama years, when the government pressured banks to cut off a variety of "undesirable" businesses, such as payday lenders, gun dealers, and so on.
Cash serves an important purpose. It is a safety valve in case of such extrajudicial overreach. Yeah, because it's private, it also enables some bad stuff (tax dodging, drug trade), but the same can be said about not requiring ID verification to use the internet.
Operation Choke Point was run by the government within the framework of the existing banking sector. It was enacted by DoJ (one part of the government) then:
"In August 2014, U.S. Representative Blaine Luetkemeyer introduced a bill that would limit law enforcement's ability to restrict access to the banking system as a response against Operation Choke Point.[12]"
So it was stopped by Congress, another part of government.
The existence or non-existence of cash wouldn't have made a difference to the ability of pay day lenders or firearms dealers to continue operating because I'm pretty sure they wouldn't be able to get access to cash to conduct their business unless they had bank accounts!
My point is that a government supplied electronic payment system would make no difference to the ability of a government to engage in anything more or less nefarious than they can already do, and the legislative process is capable of dealing with that (and if it's not, cash won't save you either).
Wandering a bit astray now, but Operation Choke Point 2.0 is currently underway, with the goal of debanking the cryptocurrency industry. Same playbook, different set of undesirable businesses.
Nearly every democracy on the world manages to put on their constitution that the government won't meddle with private business without due process. And almost all of those manage to follow that rule.
I'm pretty sure the US can do the same if the system is run by the government. That kind of thing only happens there because it's run by private companies.
The answer to unfairness is not let the government take it over. That is unless you want to raise costs for everyone, eliminate all competition, and end up with the same institutional problems.
Note that I'm not suggesting we eliminate private credit creation or that the government issue loans, what I'm advocating is a government supplied and run electronic payment system.
They already supply a payment system (cash), it's just not electronic. Last time I checked we're not hurting for lack of competition in the "minting currency" industry, and in fact when this was competitive (ie. before the Federal Reserve was formed) the US was a total shit show and it couldn't get anything done.
Why not both? I would hope the government could do two things at once. There's no reason the post office couldn't also function as a basic bank, the same way it does in many other countries, while eliminating a discriminatory business practice.
Yes a postal savings system would be a way to provide a government run electronic payments system.
The point is that there are many benefits for businesses to not accepting cash payments, especially if they're maintaining the service for a decreasing portion of their customers.
Also, if customers had access to a government run cashless payment system (the same privilege that private banks enjoy) then they might find themselves less interested in carrying cash in the first place.
I agree that the state should do more to alleviate the situation of being unbanked, but this is a major win for the unbanked that will offer immediate relief and comes with a number of other benefits for all different kinds of stakeholders. It's a non-brainer starting point even if your only goal was helping the unbanked
The first step to helping the unbanked is removing banks from the picture altogether.
They are technically wholly unnecessary in the 21st century for the purposes of sending/receiving/keeping a running total of funds in an electronic database entry ascribed to an entity.
Make access to a bank account a right. Take all of the unbanked/unprofitable customers and assign them to banks weighted by each bank’s market share. No matter their Chexsystems report status.
Access to cash is a right. You can buy gift type credit cards and periodically "recharge" them for use. It seems to work fine for those who have to use it, but I have no idea what regulations, if any, are protecting those customers.
Anyways, extending this idea to also include an ECH account attached to the payment account is probably not difficult to accomplish and is probably where federal reserve efforts could improve outcomes without forcing banks to take on customers.
Instead of pretending that you get to establish the rules for how your business receives transactions VS the defined systems, standards and legal accommodations that you're already implicitly and explicitly agreeing to when establishing your corporate entity, they should follow the established standards and look to engage in legal activism that aligns with their interests instead of blatantly violating the law.
Actually, paying with cash is a great way to avoid tipflation. Tip if you like, whatever amount you feel is an appropriate employment subsidy for the service rendered, but you won’t be awkwardly forced into it by an iPad.
For me it makes it harder to read. I think it's because my skimming muscles are so tuned to both bold and first-sentence text that when presented such a stark opportunity, I naturally try to jump from one bold title to the next. But the bolded "titles" contain no substantive information, so I have to fight that urge, which means I can't skim at all, even though my attention reeeeally wants to jump.
Readit News
There's a completely different take; Civic resilience
From an operational and strategic security POV, cash is a vastly superior technology. It doesn't need electricity, a network of cables, satellites and routers.
Therefore cash in circulation acts as a buffer that provides economic stability and continuity of operations.
Also, take a look at a modern European bank note, like we have in the UK. It's a sophisticated technology. It's not like we still have Roman coins that any blacksmith can forge.
There are many good, but more subtle reasons for preserving the use of cash, and regulating business practices if necessary to do so.
If the power goes out, I can't get any cash. I don't keep any meaningful amount cash on hand and neither does anyone I know, including my elderly relatives. Most of the stores I shop at won't actually be able to sell me anything, because none of the products have price tags and I sincerely doubt that any of their staff are trained to revert to pen-and-paper accounting. Even if they did manage to keep things running, they'd likely run out of change by the end of the day. The grocery stores are JIT and have no more than a few days of stock of anything; again, I doubt there's a manual backup to their reordering system.
Maybe things are different in countries with less reliable infrastructure, but I just can't think of a scenario in which cash would gain you any appreciable amount of resilience without much wider systemic changes. So much other stuff beyond payments is wholly reliant on technology. I'm not sure that would be a wise investment versus improving the resilience of power distribution and network infrastructure.
Well, that is well on your single data point, here is mine: I live in a bad weather prone area of the united states. I do not know _anyone_ that does _not_ have a meaningful amount of cash in the house for bad weather. Yes, stores here operate with low/no power or communications and use cash. I agree with the poster who noted that it provides a localized resilience. It is your fault, not anyone else's, that you do not have some currency.
Truth be told, I have kept about a weeks worth of spending in cash for decades in the house, just in case, and I have indeed had to use it during long term power outages. Heck, in my area just last week, all of my banks ATMs were down for the entire week due to a software issue after an upgrade (I am not making this up). While I might not have needed cash, it shows the fragility of our systems we rely on.
Another side effect of this DC rule will be to ensure that more are prepared too.
That's your choice, not a problem with cash
> Most of the stores I shop at won't actually be able to sell me anything
But many other stores will
> ... by the end of the day
Often, it is all that is needed
Not all outages are apocalypse scenarios. Sometimes, it is just about finding something to eat for the night, the kind of small things that add up in an emergency situation.
Take the 2011 Sendai earthquake and tsunami for instance, it caused big problems like flooded cities and the Fukushima disaster, but it also caused small problems for millions of people, power outages, stopped trains, etc... These people had to eat, sleep,... while most of the infrastructure was down, it got better the next day, but in the meantime, it is good not to have to worry about millions of people being able to buy their meal when thousands are in need for immediate assistance.
And, as others note, CC readers in an individual store do go down though I probably won't have much cash in my pocket even if I have some at home.
I think South Africa has had power problems in recent years, might be good to look at how they've dealt with it?
In Hungary currently it is mandatory to use networked cash registers for cash transactions and centralized digital reporting system for issuing invoices. There are some minor exemptions, for farmer's markets and some similar specific niche very low volume cash transactions.
I know about no disaster protocols. (though the Hungarian mindset wouldn't give a damn about law forbidding sales without digital invoice in case of a slightly sustained emergency situation, possibly an outage longer than a day.)
So basically even with cash you might need electricity. (until nobody starts to give a damn)
I support using cash, for the several reasons outlined in the comments and the article. Yet I think when the trust in government/public services starts to break down (as ignoring laws banning non digitally accounted transactions), the trust in cash might also start to break down (though it takes longer imo)
Something that I've learned when I worked with those devices in the past is that the tax authorities do have strong contingency plans.
There are a lot of scenarios where having cash as a fallback is great.
So yes, a bulletproof cage is security technology, it works sufficiently well most of the time, there aren't many low-effort innovations to break it (bombs and such have been around forever but aren't used to rob convenience stores often), and if it does get broken it's obvious. Whereas a software exploits can be harder to detect and can be much easier to replicate and scale
Edit - Innovations in physical theft: That Kia/Hyundai car trend, which is really software. The trick bums use to steal blue bikes from docks. Writing threatening notes to bank tellers without any way of making good on the threat because tellers are directed to not fight back. Any more examples?
This is about money being able to function with crippled infrastructure, not about someone stealing dollars stashed inside a mattress.
and it's superior because it usually cannot be circumvented with math or will accumulate known insecurities over time.
Back in 2018, Visa's network crashed:
https://www.theguardian.com/world/live/2018/jun/01/visa-outa...
It was absolute chaos. Most shops and restaurants lost a ton of business due to customers not being able to pay for products (many people here don't have cash in their wallets at all), and many of them couldn't sell even if they wanted to, since the card reader (and other parts of their point of sale systems) also relied on said network.
Having cash as an option at least means things won't completely shut down whenever this sort of error occurs.
It is vulnerable to counterfeiting which mean citizens lose out regularly as they don't have the means to check all cash is valid as shops or banks do.
Physically it is vulnerable to destruction and cannot be replaced if burned for example, unlike a bank card or other token of identity linking you to your funds.
It is vulnerable to devaluation (in has this in common with electronic cash)
In the event of societal collapse or degradation it becomes worthless fairly quickly, which is the opposite of resilient.
Cash is not at all resilient compared to electronic money therefore, and people are voting with their feet to get rid of it, laws like this will just delay the inevitable for a decade or so.
Bank cards will also disappear pretty quickly IMO (next couple of decades), as they're just a physical token of ownership and not really required if you can rely on say a combination of biometrics to assert identity.
But nowadays cash is hard currency, while electronic payments are fiat currency, or like NFTs.
I think of this after all the stories about paypal/square/etc withholding payments and destroying an individual or a business.
To be fair, credit cards also don't. At least didn't need to, up until very recently, when most issuers stopped embossing their credit cards.
Imprinters exist. https://en.wikipedia.org/wiki/Credit_card_imprinter
Sure, the risk here is that the charge would get declined later on, but you get the same risk if you accept personal checks.
So in some scenario where electricity is unavailable, credit cards will be just as worthless in most cases as apps and gift cards.
You need trusted cashiers, need to check every received note to see if it's genuine, then you need to safely deposit that somewhere, the boxes of cash have to be transported likely in an armored truck.
And you still need communications networks for all the checks and balances and automated systems to handle the cash.
It's a massive logistic effort to shuffle around little certificates of value.
No but dollar bills are a lot less advanced. They're also all still the same size and color so it's very hard to differentiate them.
For me the privacy point is the most important though.
Dead Comment
Deloitte calculate the per day impact of a temporary shutdown would be on average $23.6 million per 10 million population. Not that bad actually. But that figure seems based on the immediate hourly estimate from places like The Uptime Institute and LSE. Other estimates puts it at between $11Bn per day for the whole USA [0] and only $10Bn for the whole year [1]. In reality the impact quickly compounds, making day 2 (24-48 hours) significant worse, and so on [2]. I am quite sure the aggregate downtime of AWS, Azure, Google and other cloud services in the past year has exceeded 24 hours per capita civilian use.
Being able to take cash, as a "flywheel", makes or breaks businesses in those times.
[0] https://bnn.network/finance-nav/unraveling-the-impact-of-glo...
[1] https://arstechnica.com/tech-policy/2022/07/internet-shutdow...
[2] According to studies I got masters students at York Business School to undertake.
edit: formatting
But most businesses do. The main issue is there: why should a business be forced by law to accept cash if they absolutely need electricty and cables to work as a business ?
It's one step below forcing them to accept hand written checks. Those are also extremely resilient, you just need a pen and paper. But god no I wouldn't want to deal with them at a car rental desk.
Sure cash should be accepted in shops selling essential goods. But other shops should have the choice.
* Elderly people who struggle with technology.
* People fleeing coercive situations like domestic abuse where their abuser controls their finances.
* People with mental disabilities, for whom cash might be the only thing they know how to use.
* Homeless people, who might literally rely on cash to survive.
* Poorer people who prefer cash because it helps them budget and limit their spending.
* People so poor or otherwise disadvantaged that they don't even have a bank account.
That last group is much bigger than you think: by one estimate, 6% of American adults don't have a bank account and another 13% are "underbanked".[0] That's tens of millions of people in the US alone who don't have access to the basic financial services that you and I take for granted.
I have no idea how they do it. I'm not sure how it's even possible to navigate modern life without a bank account, but then I'm an educated, affluent professional who has no idea what it's like to be poor. Just because I don't need cash doesn't mean that no-one else does.
So basically, I think that asking "why should a business be forced by law to accept cash?" is like asking "why should a business be forced by law to provide wheelchair ramps and elevators?" If you don't think the answer is obvious, then you need to check your privilege.
[0] Source: https://usafacts.org/articles/who-is-the-least-likely-to-hav...
Ummm, for quite small values of "most" :)
I have a handle on this because I set a resilience assignment to a cohort of about 20 MBAs at a business school. Specifically I asked for a representative range of businesses;
- fast food - gymnasiums and sports - nail bars and hairdressers - auto-repair and mechanic/garages - child and day-care
.... you get the picture, _loads_ of variety.
They did 1 hour, 12 hour, 24 hour and one week case models.
As tech people, we are probably biased to think too heavily about digital and electronic systems. Many businesses can function in "survival mode" during a tech outage, including electricity in some cases.
As I recall, after "telephone", it was payment systems that were the real killer. Interestingly many access control systems fail-safe simply locking everyone out of the buildings!
Deleted Comment
That said, I can also understand businesses wanting to do away with it - no need to dealt with it; secure it, count it, deposit it, … etc.
When I asked for a Clubcard a few months ago they said they're not giving out any and you have to use the app.
Funny enough just after I asked I found one on the floor; I'm using that one.
I wouldn't go to Tesco if it wasn't for that, because the price differences are just insane. Before you had the points and whatnot but not the strong discounts (IIRC), then I didn't go to Tesco for a few years on account of being in a different country, and now it's a €3 "regular price" and "€1.50 club card price" for half the stuff I buy. wtf?!
212-867-5309. Replace area code with one near your location.
However having the option not to is a very important privilege I feel we should protect.
Believe it or not we do have cash first businesses and I make it a point to use cash with them as they will only charge a fee if you use a credit card.
We need a stronger reason than "I want that" to force businesses to give us things — otherwise how do we decide whose preferences we should mandate?
The strong enough reason is "it's better for the people."
It's easy how we decide whose preferences we mandate - we mandate people's preferences, and businesses find ways to make money within those constraints. There's no issue making profit like this, so I'm not sure where the concern is. Profits slightly dented for a second? Oh well.
You don’t. The merchant you are buying from is choosing to pay 3% for credit card payments because they believe incentivizing people to pay with credit cards will result in them earning more (via higher prices or higher margin goods) than incentivizing them to pay with debit/cash.
If a merchant wanted to, it would be trivial for them to give you a 3% discount for paying with debit. In fact, Target gives you 5% off for paying with debit via their Redcard, but I suspect they do not advertise it because they still want their non savvy buyers to use credit cards. And they want to funnel their rewards seeking savvy buyers to the 5% discount since they bet the cost benefit for those people does not work out.
> You don’t. The merchant you are buying from is choosing to pay 3% for credit card payments because they believe incentivizing people to pay with credit cards will result in them earning more (via higher prices or higher margin goods) than incentivizing them to pay with debit/cash.
Today I picked up flooring from a place that gave a 5% discount for paying with cash or check. Many gas stations around here are around 3% less when paying with cash. At such places you pay extra for the convenience of the card.
I don't believe that a merchant is allowed to do this? Probably very dependent on your deal with credit card processors but my understanding is that the default contract between a merchant and a credit card processor stipulates that you are not allowed to offer discounts to not use credit cards differently.
Of course if you are Target-sized, you get special treatment. My understanding is stuff like Redcard is basically just Target "giving back" their cut of processing fees...
> If a merchant wanted to, it would be trivial for them to give you a 3% discount for paying with debit.
It makes more sense to me for it to be a surcharge for using a credit card, but the last I knew the credit card companies disallow that in their agreements. Discounts get confusing and bump up against weird cases like minimum advertised pricing and potential taxation on the discount.
Debit cards can get a bit weird when they function as credit cards. A customer may use a debit card but swipe it as Visa or Mastercard and the fees the merchant pay will be different, setting up a constant source of frustration at the register.
Why are you putting the onus on the retailer? Don't assume malice or intent from them.
I operate online businesses; so 99% of my sales are credit card. I get the occasional wire/ACH or a check in the mail. I'd love to not pay 3% of all my revenue to credit card processors, but most people want to use credit card / PayPal / etc. because it's more convenient for them.
I'm happy to offer a discount if someone wants to pay via a non-credit card, but I don't raise my prices because of it. I just have to suck it up and eat that cost. My margins are not high and I would've made about 27% more last year had I not had to do that. You're welcome.
You thought... prices were dynamically changing per acquisition channel, or that credit borrowers were "privileged" because they took a credit risk and got a "reward" coming from... the merchant ??? Man, what a beautiful world that would have been :(
People seem to forget processing cash isn't free. If you're small, it's a trip to the bank. If you're large, it's an armored truck. Employee theft is a problem. Counterfeit money is a problem. If we pretend it's 1% instead of 3% (since you can get 2% cash back), 1% for not dealing with the downsides of cash sounds ok.
Which they use to fund cash back programs...
It's a real problem that some people cannot afford the fees on a bank account, but I would prefer that we find some way to provide everyone with minimum banking services. Like a no-fee government-provided debit card.
I know, the government doing things is bad, but Wells Fargo, Citibank, etc are so heavily regulated, they are essentially a wing of the government now anyway. Maybe in exchange for being "too big to fail" they could be required to provide all American citizens with a standard, transferrable, no-fee debit accounts.
The government shouldn’t even need to get involved here. In the UK accounts have no standard charge and come with free debit card. There’s no reason banks in the US can’t offer this other than the fact people think paying for an account is normal so they can get away with it. Do the “app” banks like Revolut and Monzo offer free accounts in the US? Curious if they’re bringing some competition that could force change.
Well, in the UK, fee-free basic bank accounts are the result of government regulation(1).
It was part of the UK's implementation of Directive 2014/92/EU (2), which mandated access to basic bank accounts across the EU (of which the UK was then a part).
(1) https://www.gov.uk/government/news/fee-free-bank-accounts-la... (2) https://europa.eu/youreurope/citizens/consumers/financial-pr...
Malicious compliance is fun.
Besides, having to have change is the really big cost of cash handling. Almost all your customers come in with big notes from an ATM and leave with smaller notes or coins, so you have to keep getting change from the bank. Just rebrand "not giving change" as "mandatory tipping" and it's even a pro-worker move!
rounding-up to avoid handling change is the norm when paying cash in "tippable" situations like at restaurants or farmer's markets.
Plenty of banks offer no minimum checking accounts. Whenever this gets dug into, the fees they supposedly can’t afford are when their balances go negative, which is harder to justify being free.
Ally Bank offers no minimum, but they're online only and reimburse for (some) ATM fees rather than it being free upfront.
Many ordinary people who try to get an ordinary bank account at an ordinary bank they take the bus and the walk to end up paying fees.
[1]: https://www.wellsfargo.com/checking/everyday/monthly-service...
The fees exist in the UK but the UK never had the cash culture that the US does so very few consumers made a fuss about it. Plus the UK has a much longer history of debit card use than the US.
The US banking sector is less regulated than the UK sector so can get away with adding fees. The UK banks would love to move to the same model but would get strung up by the public and regulators.
Disclaimer: Haven't checked the details now.
They put in an ATM, can't charge that back.
More likely, thieves were using stolen cards, and the chargebacks were probably legitimate (a thief trying to make money on a chargeback would be pretty dumb anyways, since it would be tracked back to their identity regardless, and the bank would shut them down quickly they made an unusual habit of it).
A congressman was just carjacked in SW DC. The city was really great in the aughts and teens and has gone to shit post-2020. I wish they'd focus on cracking down on crime, which is working really well in NYC.
It is up to the gov't to enact policies (carrot or stick) to prevent robberies.
Banning cash to allegedly keep workers safe is the ultimate whitewashing of corporate greed at the expense of workers and the public. This is a good law.
Cash serves an important purpose. It is a safety valve in case of such extrajudicial overreach. Yeah, because it's private, it also enables some bad stuff (tax dodging, drug trade), but the same can be said about not requiring ID verification to use the internet.
"In August 2014, U.S. Representative Blaine Luetkemeyer introduced a bill that would limit law enforcement's ability to restrict access to the banking system as a response against Operation Choke Point.[12]"
So it was stopped by Congress, another part of government.
The existence or non-existence of cash wouldn't have made a difference to the ability of pay day lenders or firearms dealers to continue operating because I'm pretty sure they wouldn't be able to get access to cash to conduct their business unless they had bank accounts!
My point is that a government supplied electronic payment system would make no difference to the ability of a government to engage in anything more or less nefarious than they can already do, and the legislative process is capable of dealing with that (and if it's not, cash won't save you either).
I'm pretty sure the US can do the same if the system is run by the government. That kind of thing only happens there because it's run by private companies.
They already supply a payment system (cash), it's just not electronic. Last time I checked we're not hurting for lack of competition in the "minting currency" industry, and in fact when this was competitive (ie. before the Federal Reserve was formed) the US was a total shit show and it couldn't get anything done.
The point is that there are many benefits for businesses to not accepting cash payments, especially if they're maintaining the service for a decreasing portion of their customers.
Also, if customers had access to a government run cashless payment system (the same privilege that private banks enjoy) then they might find themselves less interested in carrying cash in the first place.
They are technically wholly unnecessary in the 21st century for the purposes of sending/receiving/keeping a running total of funds in an electronic database entry ascribed to an entity.
Mandate the USPS (federal government) to offer electronic money accounts to everyone.
Anyways, extending this idea to also include an ECH account attached to the payment account is probably not difficult to accomplish and is probably where federal reserve efforts could improve outcomes without forcing banks to take on customers.
These people often don't have a bank in their neighborhood.
https://www.nbcwashington.com/news/local/new-laws-on-guns-ca...
At first I thought they were banning cash-only businesses, but it is in fact the opposite. Businesses must now accept cash in Washington D.C.
'Driving the news', 'Zoom in' and 'zoom out' seem just like spurious titles.