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I think you are missing something somewhere, because by that logic there should be far far far more businesses that do not take credit cards, and the vast vast vast majority of consumer facing (versus business-to-business companies) that I deal with do take credit cards.

No, that's crazy. Nobody today can afford not to take cards. Cards are 80% of our sales. But, that 20% of cash doesn't cost us the 3% in fees, so you'd have to be dump or crazy not to accept cash.

Are you sure? First off "typical" credit card fees seem to be more like 2% according to https://www.cardfellow.com/ave...

Just pulling numbers out of my ass, but if a business needs to pay someone for two hours per week (which seems like a huge under estimate, it is only 20 minutes per day for a six-day week) to deal with cash (count, sort, bring to the bank to deposit, etc) than that would be easily $30 in labour per week. $30 is 3% of $1000. If that is 20% of sales, then total sales are $5000/week. Probably very few businesses are successful on $5000/week in gross sales, so that isn't very persuasive, but it is suggestive. I imagine that $50,000/week in gross sales is more typical, which is $10,000/week in cash for those 20% of transactions. 3% of that is $300, or somewhere around ten hours of labour (seven hours if looking at 2%). That does seem a bit high, but it doesn't take long to use up that "budget" if the drive to the bank takes up much time, or there are any thefts or losses or errors at the till.

So, three percent might be high, but anyone who thinks it is significantly lower than 1% is probably wrong too. A one person operation might not be "paying" themselves for the time it takes to collect, count, and deposit their cash, but the time is being spent non-the-less, and the risk of loss or theft is probably a bit higher for cash vs plastic.

At some point, if a business does most of their transactions with plastic, it might be less expensive to eliminate the whole cash-processing infrastructure. Not having to purchase the hardware (cash register, safe, etc.) might tilt the calculation away from cash.

Apple Pay charges merchants 0.15% which is right in line with MasterCard, Visa, American Express and Discover. https://www.cardfellow.com/cre...

You believe that paying with a credit card does not cost more than cash? You may not see the cost as it may be charged to the store instead of you, but you pay in higher prices for all goods and services.

For a long time, I used to think like you did - that the merchant was getting ripped off to the tune of 1-2% when I paid by credit card.

However, that was before taking into account the costs of handling cash - paying staff to count the cash twice a day, infrastructure/security to store cash safely overnight, paying staff to transfer cash safely to the bank regularly, potential costs of staff theft, arranging/maintaining sufficient float to give change to customers, sufficient security for float cash during the work day, etc.

These are real costs on a business, which are not relevant for card transactions, and also get factored into the costs of goods and services.

Depends on the business. Small value transactions cost a lot more relative to large value transactions.

"For example, let's pretend that two businesses each process $1,000 in transactions. Business A has an average ticket of $10, and Business B has an average ticket of $100. This means that Business A will have 100 transactions, and Business B will have 10 transactions.

Let's assume that both businesses have the exact same rates, including a $0.18 transaction fee. Business A would pay $18 in transaction fees, while Business B would only pay $1.80. Business A pays 1,000% more!"
https://www.cardfellow.com/ave...

There is no such law. The credit card companies tried to limit this behavior contractually and lost in court not so long ago.

I was wrong. There are no FEDERAL laws. There are, however, STATE laws. I was remembering (the gist of) California's, since I live here.

From https://usa.visa.com/support/c...

âoeNo retailerâ¦may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar meansâ¦â
Statute: Cal. Civ. Code  1748.1(a) (West)

(It then goes on to discuss the discount for cash payment idea.)

That page also lists other state laws.

More general info is at
https://www.cardfellow.com/cha...

Moreover, in many states it may be illegal to offer a discount, since there are laws forcing prices to remain the same

It's not a law requirement so much as it is one of the terms of Visa/MasterCard/AmEx/etc. They don't permit merchants to give discounts for other forms of payment, or place surcharges.

Or they didn't, to be more precise. Case law in 2013 invalidated those clauses, and now in at least 40 states, merchants may surcharge transactions, provide discounts, and/or discriminate in any other way they choose against a given payment method.

Most merchants will choose the discount approach though (often with a general price increase on everything they sell) as a lot of customers will get annoyed with "hidden" charges, but love discounts.

http://www.cardfellow.com/blog...

Though I could see a day where walmart et al would offer discounts for using CurrentC, and if/when widespread adoption ensues, stop offering said discount and simply surcharge credit cards instead.

Why would I use it?

Because merchants are probably going to start charging you a fee to use your credit card. They may hide it by jacking up prices then offer a "CurrentC discount" or something (sort of like the so-called "cash discount" at the gas station), since it's still tricky to charge a CC fee, but merchants are getting reamed and are trying hard to find a way to stop it. Where do you think that cash back on your Visa card comes from?

I would rather pay an extra 3-5% on every transaction at one of these retailers (with the option of simply never shopping there, which, at present, I pretty much don't anyway) than expose myself to the possibility of having my entire checking account drained when just one of them manages to get hacked and lose my account information to thieves.

I don't care if they overhaul and rebrand this piece of crap so it's less pathetically insecure and inconvenient—even if they make it as simple to use as Apple Pay is now. As long as they a) demand my bank account number, b) demand my Social Security number, or c) demand to be able to track vast amounts of information about me, there isn't a way in Hell I'm signing up for CurrentC or any service like it.

As it stands, it's just a total no-brainer. I can't understand why anyone would rather use CurrentC than cash or a credit card, let alone Apple Pay.

Dan Aris

Why would I use it?

Because merchants are probably going to start charging you a fee to use your credit card. They may hide it by jacking up prices then offer a "CurrentC discount" or something (sort of like the so-called "cash discount" at the gas station), since it's still tricky to charge a CC fee, but merchants are getting reamed and are trying hard to find a way to stop it. Where do you think that cash back on your Visa card comes from?

first Visa and MC both require merchants not to charge extra fro using their card. Thus there's no reason for consumers not to use the most widely accepted cards.

Nope. Not anymore.

Briefly (if you don't want to read the link), as a result of a major 2012 settlement with Visa and Mastercard, merchants ARE now allowed to charge fees for credit cards. (There are still restrictions on how exactly this is done; a good summary is here.)

Some states have restricted this practice significantly, most commonly requiring that POSTED prices for goods be the higher price, and thus only allowing a "cash discount" rather than an extra "fee" for using credit cards.

I've bought items at two places just in the past couple days that have dual pricing: a gas station and a liquor store. In one case, the advantage of cash pricing far outweighs any credit card bonus point advantage I could get.