Should businesses be allowed to be cashless?

[D_Anconia]

@kenobi_65

My mother-in-law lives here in suburban Chicago. She’s not lower-income, but she is frugal as hell, and she has T-Mobile for her cell service, specifically because it’s substantially cheaper than Verizon or AT&T. Here’s T-Mobile’s coverage map; they make it look like the Chicago area is completely covered. Actual experience is that that’s BS. My mother-in-law suffers dropped calls, or no signal at all, continually, including in her home. Who knows if it’s a matter of tower placement or what, but the map doesn’t tell you that.

Similarly, I have AT&T (and they’re one of the “good ones,” coverage-wise). Again, if the coverage map alone was to be believed, I should have coverage everywhere here in Chicago. Yes, but…there are areas (including at my house) where my signal drops to one or two bars, trying to use data is spotty at best, and calls regularly drop. It’s not like Chicago is a hilly area, either. If AT&T hadn’t given me a microcell for the house a decade ago, my cell service would be next to unusable in my home. The microcell is tied into my cable modem for its connection; if the cable is out, the odds of a cell call dropping are very high, and the data aspect of the phone is close to unusable. And this is all in a highly urbanized area, too.

I don’t believe that personal anecdotes* make very good cites, but since I can’t find a contrary factual cite, I will drop the issue.

*From anyone, this is not directed at you.

[Corry_El]

@kenobi_65

Let’s just say that maps like this are nice, but don’t tell the whole story.

First of all, that’s Verizon, which is one of the more expensive providers. I suspect that many lower-income Americans may be opting for one of the lower-cost providers, whose coverage may not be as good or reliable.

There are four cell national phone networks in the US: AT&T, Verizon, T-Mobile and Sprint, and two regional ones. The other familiar names are so called MVNO’s which lease the use of one or more of those networks. Some are subsidiaries of the network owning companies. I use Cricket, which is a subsidiary of AT&T and is cheaper than AT&T or T-mobile. I used to have AT&T and I can see no difference at all in the phone service itself paying 36% less with Cricket, which it stands to reason there wouldn’t be because it’s the same network (you can even switch to them with a phone ‘locked’ to AT&T). T-Mobile doesn’t have a great reputation around here (NJ right across from NY) on reception and call dropping, maybe that’s true everywhere, or maybe they are good in some areas. Anyway mom-in-law may just have the wrong service as opposed to there being a consistent trade off between price and basic phone connectivity.

If there’s a coverage issue it’s probably mainly a rural one, affecting a quite small % of the population, not an income one. And everyday experience in this area is that older people often don’t have smartphones. Young people seem to have them at a very high rate in every type of neighborhood.

But again I don’t see any reasonable argument to make people use electronic means to pay, as in the governmental ‘we’…but not to prohibit private businesses from only accepting electronic means either. Catering to consumer demand to use a variety of means of payment makes basic storefront businesses more money, therefore the overwhelming majority of them offer it. A basic change to that situation is a hypothetical future thing and even if it happens could affect a small subset of the people who don’t access electronic means now. It will probably change, in storefront businesses in lower income areas, largely because the clientele there has also switched away from cash. Again the idea that electronic payment systems are prohibited by poverty doesn’t seem to be true if you look at the big growth of mobile phone based payment systems in some African countries.

[DrDeth]

@Riemann

I believe that in most jurisdictions the concept of “legal tender” applies (if at all) only to existing debts. I.

If you buy something that is indeed a debt for this purpose. Honestly, in the uS, the concept of Legal Tender is very vague. The purpose of it is so you can’t demand Gold or Euros instead of US dollars. There are no actual laws prohibiting that, however, but deep in banking regs that are some regs that cover it , but which are rarely used.

So as long as the merchant accepts your card* payable in dollars*, they are Ok. Even so, right now they wouldn’t be breaking any criminal laws and they would not be in fear of arrest.

The dollar is so strong and so universally accepted, that there is no call for enabling laws on “legal tender”.

[RTFirefly]

@UDS

Legal tender can’t be refused in settlement of a debt. But businesses that don’t extend credit aren’t affected by this. If you want to buy coffee or a newspaper or whatever from me and I indicate that I don’t accept cash but am happy to take plastic, that’s fine, legally speaking. There is no debt involved there.

Ah. So when they set the cup of coffee on the counter and it’s time for me to pay, I take the cup of coffee first.

Now I owe them the price of the cup of coffee, plus tax. And they are obligated to let me pay in cash.

[DrDeth]

@Corry_El

Also I think the cost of cashless is being exaggerated, by not taking into account that people without bank accounts also have to pay fees in a cash/check economy. They have to pay check cashing fees to cash a paycheck,…

Not if you cash that check at the issuing bank.

[Broomstick]

@Corry_El

In Africa average people are much poorer than people considered poor in the US, but in many countries there payment by smartphone is more common than in the US. A lot of people in the US who don’t have smartphones are technophobes. It’s not as correlated with low income as more traditional financial means like having a bank account. It’s entirely possible that by the time there’s actually a shortage of basic small businesses taking cash, poor people will also predominantly not use cash. Right now they often do…but right now there’s no real trouble using cash, two things which are not a coincidence.

There is a weird bubble where people are likely to be both low income AND not have a smartphone these days in the US.

There was (and maybe still is) a problem where people who received government benefits like WIC, food stamps, etc. were eligible for a really basic smart phone. This resulted in a lot of genuinely poor people acquiring smartphones and indeed some of those folks use them for purchases. However, if you were making a little bit more than allowed to qualify for those programs getting a smartphone might still be either prohibitively expensive or a big bite out of the budget, so while the poorest these days often have smartphones the next tier up - the working poor through lower middle class - are LESS likely to have smartphones than those on the bottom. That is also the slice of people most likely to NOT have a bank account, checking account, easy access to credit, and so forth. It’s not that they’re technophobes, it’s that they’re low income and have to be very careful how they spend their money. Or if they aren’t, they wind up with horrible credit and problems paying with plastic.

[bump]

@PastTense

Those maps are completely inaccurate. Try crowd-sourced data like:
https://www.sensorly.com/

That’s misleading as well- it shows what I’m guessing is either where someone with the app actually had service, which means that it tends to track main roads and places, and leave huge “dead zones” which in reality have perfectly fine cell service- just nobody running the app has driven through there.

[RTFirefly]

@Broomstick

There is a weird bubble where people are likely to be both low income AND not have a smartphone these days in the US.

There was (and maybe still is) a problem where people who received government benefits like WIC, food stamps, etc. were eligible for a really basic smart phone. This resulted in a lot of genuinely poor people acquiring smartphones and indeed some of those folks use them for purchases. However, if you were making a little bit more than allowed to qualify for those programs getting a smartphone might still be either prohibitively expensive or a big bite out of the budget, so while the poorest these days often have smartphones the next tier up - the working poor through lower middle class - are LESS likely to have smartphones than those on the bottom. That is also the slice of people most likely to NOT have a bank account, checking account, easy access to credit, and so forth. It’s not that they’re technophobes, it’s that they’re low income and have to be very careful how they spend their money. Or if they aren’t, they wind up with horrible credit and problems paying with plastic.

Also, according to the FDIC, 6.5% of households in the U.S. are unbanked.

I don’t know how paying by smartphone works, because I’ve never owned a smartphone. But presumably it’s got to be linked to either an account with money in it, or a source of credit, somewhere. The people who are unbanked are largely the poorest Americans, and having one of those free smartphones still won’t help them engage in cashless commerce.

So you’ve got poor people with smartphones but no way to use them to pay for stuff, and (as you pointed out) you’ve got the people slightly better off than them who don’t get a free smartphone and can’t afford one they have to pay for.

[pohjonen]

@Littleman

Don’t all of those take ridiculous amounts for withdrawals?

No. The Direct Express debit card for SS can be used to get cash from any bank that is a MasterCard participant without any charge. No ATM use required.

[Corry_El]

@Broomstick

There is a weird bubble where people are likely to be both low income AND not have a smartphone these days in the US.

There was (and maybe still is) a problem where people who received government benefits like WIC, food stamps, etc. were eligible for a really basic smart phone. This resulted in a lot of genuinely poor people acquiring smartphones and indeed some of those folks use them for purchases. However, if you were making a little bit more than allowed to qualify for those programs getting a smartphone might still be either prohibitively expensive or a big bite out of the budget, so while the poorest these days often have smartphones the next tier up - the working poor through lower middle class - are LESS likely to have smartphones than those on the bottom. That is also the slice of people most likely to NOT have a bank account, checking account, easy access to credit, and so forth. It’s not that they’re technophobes, it’s that they’re low income and have to be very careful how they spend their money. Or if they aren’t, they wind up with horrible credit and problems paying with plastic.

There are people who don’t have smartphones because they judge they can’t afford it, but I don’t think it’s pervasive among younger people in any income category. I doubt there are specific enough stats though by age and income to prove or disprove that.

It’s also true that some studies have found the $ consumption of the bottom quintile of US households by income is only barely lower that of the next quintile up by income. So the general impression that poor and lower middle class people in the US don’t have a very different consumption level has a basis in reality, and some particular things the lowest level gets for free that are harder to afford at the next tier up.

Still, I think the idea of a big barrier to people paying by phone or otherwise electronically due to income is largely imaginary. People who perceive it’s cheaper and better (from a self control POV) to deal in cash absolutely exist, but that’s not just about income. It’s about comfort with tech and other beliefs and attitudes, as illustrated in this thread with people saying ‘well I’ve never paid anything with my phone, but…’:).

Younger people at any income level are less likely to view smartphones as a luxury. At lower income you stick to what you absolutely need, but for more and more people as time goes on a reasonably capable mobile phone is one of those things. All around the world. Again, 93% of people in Kenya have access to mobile payments, about the % of households in the US with bank accounts.

But as long as lots of people want to use cash, and no reason to think that will be limited to poorer people, merchants will be screwing themselves not to accept it. The situation where that attitude hasn’t changed among consumers but merchants stop accepting cash on a widespread basis is hypothetical, and unlikely. It’s certainly not a pressing problem demanding government intervention.

[Kent_Clark]

This interests me because today I went to the barber (yes, I use an actual, old-style barber, not a stylisty.) The barber shop only accepts cash. No checks, no credit cards, no running a tab for preferred customers. And no, they don’t have an ATM on site - you have to go down the street to Walgreen’s.

Should businesses be allowed to be “cash only?”

[Voyager]

@Uzi

How can I purchase a brick of cocaine or sell ‘my’ stuff to the pawnbroker without cash?

Eventually people who deal in cash will be considered dodgy. In Hong Kong I primarily use my Octopus card which gets topped up from my credit card automatically when I deplete the amount stored on it. The top us about ~$125 USD, although I can manually add up to about $250 on the card itself. If the Octopus isn’t accepted, then I’ll use paywave or google pay, etc. Last choice is cash. The Octopus card is a stored value card that costs about $8USD one time fee. I can get the functionality on a SIM card from my mobile provider as well. I avoid vendors who don’t take Octopus or Visa as I hate getting coins in change.

The US has nothing like an Octopus card, and thinks like Apple Pay are nowhere as widely accepted as Octopus cards seemed to be when I was in Hong Kong. My daughter lent me one of hers when I visited, and it was an excellent way of paying.
It started from the Metro, right? San Francisco for example has a Clipper card for BART and MUNI, but no stores accept it. Having something like that, free or as inexpensive as Octopus and available to all would be one way of solving the problem. But it is a lot harder to make it universal here than in Hong Kong.

[Littleman]

In any case, i don’t really see a need to regulate whether a business is allowed or not.

Unless the nature of it denies some basic service or impedes certain areas or activities.
The parking garage at the state building for instance, toll roads, maybe grocery stores, gas stations that sort of thing, but for now it seems to basically take care of itself.

You don’t want my cash, I’ll go somewhere else, even if I do have a prepaid card in pocket. Mainly because I usually only load enough for the purchase i want to make , I might round to the next $20 but I rarely have much more than somewhere in the teens in a card that isn’t alloted for a purpose.

No more bank thefts, no identity theft , no problems

[Broomstick]

What makes you think cashless societies can’t have identify theft? Maybe it won’t have bank thefts in the sense of bad guys running away with bills and coins in their pockets, but computer hacking certainly could be a problem.

“Cashless” doesn’t inherently mean “less crime”.