In Canada, a Government-Backed Electronic Currency

An anonymous reader writes "Secure chips have already made it into our credit and debit cards. Next up, they could replace pocket change.The Royal Canadian Mint has been pushing forward with its "MintChip" prototype, a digital cash replacement aimed at transactions under $10, since it surfaced a year ago. The Crown corporation is factoring in developer feedback, hiring a product manager and consulting with the financial sector."

Comments

Do Canadian credit cards for sub $10?

[h4rr4r]

My credit card works fine on transactions below $10.

Where exactly is the need for this?

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

Not all merchants will accept credit cards for small transactions due to excessive fees. If more people used cc for these piddling transactions rather than paying out of pocket cash, many more might stop.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

They have too normally via their contracts. If they object and you can report them.

If you want cash, you have to give me a discount greater than my card gives me. I am not here to make your store profitable.

Re:Do Canadian credit cards for sub $10?

[gewalker]

Well, for one thing, it is anonymous by design. Secondly, it is not tied to a bank account, so you could afford to lose this and your bank account would still be safe. Sounds good to me.

Devil is in the details, i.e., not allowing unathorized mods to the balance contained within the card, making sure debits and credits against the card work every time.

Re:Do Canadian credit cards for sub $10?

[LordHatrus]

My credit card works fine on transactions below $10.

Where exactly is the need for this?

Credit cards companies take a cut out of what merchants later get, and it's normally a percentage, but it is not unusual for there to also be a minimum transaction fee. So, small credit card transactions aren't good for retailers, since the lose an unusually high amount of money to the credit card company. ... in fact, in the states, July 2010's Dodd-Frank Wall Street Reform and Consumer Protection Act recently legalized businesses setting a "minimum purchase with credit card" of up to $10.

Re:Do Canadian credit cards for sub $10?

[lart2150]

Credit card processing has fees attached to it. Many smaller shops tend to have a large flat transaction fee and some percent. if you charge $.50 on your credit card it might cost $.11 in fees meaning the merchant only gets $.39 for the $.50 worth of goods from a $.10 transaction fee + 3%. There are some processors out there that only charge a percent as far as I can tell like square.

Re:Do Canadian credit cards for sub $10?

[fustakrakich]

Where exactly is the need for this?

In theory it's more peer to peer than a bank card. But the costs will have to paid somehow. The minting of coins used to account for that.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

I am not here to keep a store running profitably. Before that law normal agreements forbade that practice. Now, I just will not shop there.

If you want cash give me a better discount than my card does.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

Ideally this would be a government function paid for by taxes the same way that minting coins was. Then this could replace the credit card system as it currently stands. While in the USA that would never happen because it would be called "Teh Socialisms", Canada might actually be able to get it done.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

There's a comment in TFA noting that part of the problem is "banking fees and age limits", and also states that instead of the chip adding or deducting money from a bank account the value is actually stored on-chip. This would make it helpful for people too young to have some sort of credit account and also means the merchant doesn't have to be connected to a network to carry out transactions. I don't know what Canada is like but in the UK it is also very common to see signs in shops saying that cards aren't accepted for sales under a certain amount because of the fee that the merchant is charged for card transactions, which rules out cards for exactly the sort of sub-$10 range they're aiming for here.

It'll be interesting to see how they try to prevent people illegitimately adding fake funds to their chips if there is no central management though.

Re:Do Canadian credit cards for sub $10?

[Samantha Wright]

Transaction fees. The policy for how this is handled varies from vendor to vendor, and some won't accept transactions below ten dollars at all. More obnoxiously, many put a 25 cent transaction fee on any direct bank debit (Interac) transaction under five dollars, and some will play with variations like 30 cents, or no limit, or something else. Supposedly this balances out the very small flat cost of all Interac transactions, but ultimately it means you're punished for using your card instead of coinage.

Otherwise, however, the debit system is quite successful, and some people can afford to not even have a credit card. If MintChip can genuinely avoid all transaction fees, it'll be the greatest thing since sliced bread for that alone.

Other goals of the system are account anonymity (a government building an anonymous financial system? say what?) and permitting arbitrary peer-to-peer transactions like PayPal... but with no intermediary. Unfortunately they have yet to figure out how to make people RTFA.

Re:Do Canadian credit cards for sub $10?

[0123456]

Well, for one thing, it is anonymous by design.

[citation needed]

According to Wikipedia it passes card IDs around in payment messages, which doesn't look very anonymous to me.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

Afford not to have a Credit Card?
A credit card is more advantageous as you have more money. I get 1% back on most purchases and 5% back on some. I always pay it off every payday, so twice a month. So I am taking a loan with a negative interest rate. Why would you not borrow money, if the payoff was less than the loan?

I see by your UID you are new here, but on slashdot it is traditional to not read the article. Advanced users don't even read the summary.

Re:Do Canadian credit cards for sub $10?

[cayenne8]

Where exactly is the need for this?

Well, the govt wants to finally close the tax hole on cash transactions.

No more will you be able to do casual transactions for cash and NOT be collecting taxes for it.

The electronic stuff is much more traceable, I imagine govt types have to reach for a tissue every time they think about getting rid of cash once and for all, and having every transaction fully traceable.

Re:Do Canadian credit cards for sub $10?

[romanr]

If, as a merchant, you're paying $0.10 + 3% per transaction, then you may want to look for a better deal. My wife's bakery doesn't do a huge volume (tho that would be nice), and only pays:
- $0.06 per transaction for debit/interact payments
- 1.6% per transaction for MC/Visa

She will also let someone use plastic to buy a cookie for $0.70 - yes, we loose a few cents on it, but the customer will be back and the next time they do buy more. (Kind of funny, watching someone buy a cookie for a quick snack / sugar rush, walk out the door, take a bite, turn around, come back in and buy a dozen).

Re:Do Canadian credit cards for sub $10?

[compro01]

Then this could replace the credit card system as it currently stands.

Probably not. We've already got a replacement for the credit card systems called Interac. It's a direct debit transfer system with way lower fees than the credit card companies.

This would likely go in the niche currently partially occupied by Interac's Flash and e-transfer services, but be even simpler for small transactions.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

If you can buy the card with cash, it seems pretty anonymous.
Same as burner phones.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

The article claims this to be an anonymous transfer method.

Also, you can always get foreign currency or gold, or silver, or some standard good. In some prisons canned fish became currency among prisoners because they were not allowed cash and no one wanted to eat the canteen's canned fish. So long as their are goods and services people want to buy without traceability they will find a way.

Re:Do Canadian credit cards for sub $10?

[CastrTroy]

Handling cash has a non-zero cost of doing business as well. There's all sorts of ways cash can go missing be it theft by employees or outsiders, or simply having it misplaced. There's bank deposit fees to actually get the money into the bank. There's the problems with ensuring you always have enough change on hand for a purchase. There's the risk of accepting counterfeit bills. There's employee time lost from counting the money to ensure the money in the till matches the amount on the receipts.

Re:Do Canadian credit cards for sub $10?

[ShanghaiBill]

My credit card works fine on transactions below $10.

Where exactly is the need for this?

1. Credit cards do not do peer-to-peer payments. If my neighbor's kid mows my lawn, I cannot transfer $5 from my CC to his. If my daughter sets up a lemonade stand, she cannot accept CC payments.

2. Credit cards do not do anonymous transactions. Plenty (most?) people want to occasionally conduct transactions where neither the buyer nor seller disclose their identity.

3. Transaction fees. Visa and Mastercard charge high fees, and operate a cartel that keeps out competitors.

4. No assurance of payment. Even if the transaction is approved, the seller can still be subjected to a chargeback, and has no assurance of actually receiving the money.

Re:Do Canadian credit cards for sub $10?

[SoldierII]

What kind of setup do you use? I am interested in that kind of low price setup...

Re:Do Canadian credit cards for sub $10?

[rjhubs]

The contracts also typically require you charge the same price for goods whether it be paid for by cash or credit. The cashback you get from your credit card at least partially comes from the fees the credit card provider charges. Most vendors already have their prices higher to cover the CC transaction costs A better argument might be is that it is a big economic inefficiency in the market to have a 3% transaction cost on purchases. The Canadian government is trying to remove this inefficiency.

Re:Do Canadian credit cards for sub $10?

[Meyaht]

Most people lack your discipline. Credit cards cost these people money. You are part of an incredibly small minority, so try to see the big picture here.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

1. There are lots of way to do exactly that. Paypal for one. There are even swipe attachments for smartphones.

2. It sounds like this card may not crack that nut. Since it sends cardID during the transaction you will have to replace cards frequently and never use them to pay something like a bill that shows who you are.

3. this will have to have some fees. Even if taxes pay them.

4. This is an advantage not a downside. If I get home and my widget is broken and you refuse to replace it I get my money back. Cash has no such property. If I falsely make a chargeback there are dispute resolution methods available.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

Their contracts probably forbid it. Credit card transaction fees are a race to the bottom (a sort of prisoner's dilemma). Because the cost of the fees are passed on to all the consumers (regardless of whether you pay cash or not), the only winning move as a consumer is to use your credit card (and get the "rewards"). The rewards, of course, are less than the fees, and the credit card companies bank the rest while you pay a hidden tax.

Because the market cannot correct this itself, this is exactly the thing that requires government intervention.

Re:Do Canadian credit cards for sub $10?

[Alex Pennace]

Ideally this would be a government function paid for by taxes the same way that minting coins was. Then this could replace the credit card system as it currently stands.

As near as I can tell, minting coins and printing currency is at least self-supporting: http://en.wikipedia.org/w/index.php?title=Seigniorage&oldid=539786565#Seigniorage_today

In some cases, national mints report the amount of seigniorage provided to their respective governments; for example, the Royal Canadian Mint reported that in 2006 it generated $C93 million in seigniorage for the Government of Canada.[6] The U.S. government, the largest beneficiary of seignorage, earned approximately $25 billion annually as of 2000.[7] For coinage only, seigniorage accruing to the U.S. Treasury per dollar issued for the fiscal year 2011 was 45 cents.[8]

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

A 3% charge is likely less than the cost of dealing with cash. It must be counted, moved to the bank, change must be brought back to the store and so on. It is also easy lost or stolen.

Lets not pretend CCs offer no value to the store.

Actually most places have made those clauses illegal or such that while they cannot have a free for CC use they can offer a rebate to cash customers.

Re:Do Canadian credit cards for sub $10?

[Striek]

MintChip emulates the positives of cash — payments are anonymous and don’t require a bank — but work electronically.

RTFM'ed that for you.

Re:Do Canadian credit cards for sub $10?

[ShanghaiBill]

If you want cash give me a better discount than my card does.

The CC companies specifically forbid this practice in the merchant agreement. Merchants cannot charge an additional fee for credit cards, and they cannot offer a discount for cash. Gas stations are normally exempted, and a few other low margin businesses may also be able to negotiate an exemption, but most shops are required to charge the same for cash and CCs, and just absorb the transaction fees as a cost of doing business.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

So issue limited edition MintChips, and let the nuts collect those.

Re:Do Canadian credit cards for sub $10?

[Zemran]

I see by your UID that you are new here but on /. no one reads the article although we always criticise others for not doing so :-)

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

Most people should learn discipline. They should teach their children early. If you learn young it is easier.

A credit card cannot cost you money, it is not going out buying things while you are at work. It is not failing to make full payments each month. No matter if you are spending cash, debit, using checks or credit cards, you have to know how much you are spending.

This is very simple, watch close!
1. On payday move all money into interest bearing account.
2. Figure out amount you are willing to spend this pay period.
3. spend amount from #2 during the pay period
4. Following payday: Pay off credit card.
5. rinse and repeat
6. at some point, spend all those points

Sure you could end up having to carry a blanace and pay interest if you have low income and high costs some month. Shit happens, but that would happen with the credit card use or not.

TLDR: Spend less money than you make.

Re:Do Canadian credit cards for sub $10?

[alexander_686]

If a store can’t run profitability, then there will be no store, so you won’t be able to shop there.

Or, here is a different way to look at it. CC processors are an oligopoly with interests in keeping CC high, which hurt both the consumer and the shop owner. I tend to be on the free market / liberation side of things, but here is a case where the market is being distorted, and this seems to be a good experiment as breaking this oligopoly. It looks like it has some of the benefits of Bitcoins (being able to circumnavigate the CC processors) without the downside. For myself, Bitcoins lack of – errr - monetary policy (for lack of a better word) is a big downside. (I know that for Bitcoins advocates this is a plus)

Re:Do Canadian credit cards for sub $10?

[Pope]

We (Canadians) don't need this at all. All the major banks are rolling out tap-to-pay for their debit cards, which generally have a $50 limit by default. There is literally no point for the Mint to go anywhere near this.

Re:Do Canadian credit cards for sub $10?

[barc0001]

Actually ALL of those card benefits you receive come straight out of the merchant's pocket. Airmiles, purchase points and cash back are all being extracted from the merchants in addition to the CC fees which can be as high as 5% or more. There's a reason businesses prefer cash and why Interac is so popular in Canada with merchants as their fees are considerably lower.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

Then as I cannot avoid the increased markup, my way is still the best.

I am not here to make someone else money.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

Why do I care about the merchant again?
I am not here to make him money. If I can give him $100 and take $1 back vs giving him $100 and $0 back I know which I will select.

Re:Do Canadian credit cards for sub $10?

[romanr]

The provider is Elavon, but we signed up via Costco.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

Oh noes, I shall have to find another store!
Perhaps order something online and have it shipped right to my home or office!

Unless this leads to reduced costs I would not give a damn. If this does not reduce the prices in the store, then it makes no difference to me.

I would be fine with even a tax paid for system to replace credit cards, but I will still use the credit card if I make out the best that way. That the merchant can't instead of won't give a discount for none credit card users does not matter to me.

So you would still need to make those kinds of contracts illegal.

Re:Do Canadian credit cards for sub $10?

[Trepidity]

I don't think the stores actually want the business of the kinds of people who would raise a stink over not being able to pay for a $2 purchase with a credit card. If those kinds of customers are scared off, so much the better.

Re:Do Canadian credit cards for sub $10?

[bluefoxlucid]

But when they screw it up, I can jack up the chip and buy a ton of shit in Canada for fake money! Easier than counterfeit.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

Cool, then I won't make a $200 purchase either.
No problem.

Stores for exactly the reason I listed do want $2 credit card users. They are the same people who make bigger purchases. Short of some rare occasions I don't carry cash. So I am not raising a stink, just walking out since I can't pay.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

So how do you buy something larger than $50?
You have to change payment methods?

I get charged $0.50 when I use my debit card. So I never use it as debit.

Re:Do Canadian credit cards for sub $10?

[Hentes]

How exactly can a P2P digital currency be anonymous?

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

For your point 4, the oposite is also true. There are dispute resolution methods if the widget is sold broken and they don't replace it.

Re:Do Canadian credit cards for sub $10?

[sinij]

Because costs are passed down to you.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

Not you maybe, but most customers would want their merchants to stay in business. Businesses don't want people like you as a customer.

Re:Do Canadian credit cards for sub $10?

[barc0001]

" If I can give him $100 and take $1 back vs giving him $100 and $0 back I know which I will select."

Then don't be surprised that the next time you go to the store you're paying $102 for the same amount of goods.... Merchants are there to make money, not run a charity. If the credit card fees and service fees gouge their margin, they'll get it back by passing it all along to us.

Re:Do Canadian credit cards for sub $10?

[Jane Q. Public]

"Sounds good to me. Devil is in the details, i.e., not allowing unathorized mods to the balance contained within the card, making sure debits and credits against the card work every time."

The devil is right there. The question is why you don't see him.

If cash is replaced with an "all electronic" economy, you can take that moment and kiss your freedom goodbye. You have just given government and corporations control of ALL your money.

When was the last time they proved they can be trusted? Eh? It has been so long, I don't remember.

Re:Do Canadian credit cards for sub $10?

[Galestar]

It not about what a single individual (you) thinks he can get away with by passing the costs onto another. Its about what removes inefficiencies from the system in general, and avoids the tragedy of the commons that we have now - which is that individuals acting under rational self interest reduce the general welfare of society as a whole.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

You are in that store to make the merchant money. As far they are concerned, you making them money is the sole purpose for you being there in the first place.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

s/credit/debit/

As a Canadian who ran a small business for a long time, we refused debit cards for small transactions as they have a fixed fee (We started at 50 cents but managed to negotiate it down to 15 cents over a few years). Credit cards have no fixed fee, but rather take a percentage (In our case, we started at a horrible 5% and negotiated it down to 1.9% for all but AmEx, which, like many Canadian businesses, we just stopped accepting). I had no problems running a credit card for a $1 purchase, after all, I'm only losing 2 cents. But running a debit card for a $1 purchase hurt terribly.

On the flipside, I would encourage customers to pay cash or debit for large purchases ($1000+) because then my savings would be almost $19.

Re:Do Canadian credit cards for sub $10?

[Jane Q. Public]

" Merchants cannot charge an additional fee for credit cards, and they cannot offer a discount for cash."

They may not be able to charge a "fee", but they can and do raise their prices to compensate, so it amounts to the same thing.

The only difference is that cash customers end up helping to pay for the credit card transactions.

Re:Do Canadian credit cards for sub $10?

[Ravaldy]

Actually you should care more than you want to. These bonuses and rewards are paid for by the merchant BUT guess who is paying the merchant for the rewards? You are! Nothing is free. Most Merchants inflate their prices to cover for these expenses. In the end all you are doing is keeping a marketing infrastructure alive by paying for it. Sure you get air miles or reward dollars but I assure you that you paid more than if you actually used your own money. It's a GIMICK and we are all fooled by it.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

Sure and I support that move.

This does not seem to fix that problem at all. Credit cards will still be in use doing their evil.

Re:Do Canadian credit cards for sub $10?

[quacking duck]

I get charged $0.50 when I use my debit card. So I never use it as debit.

I get 10 or 20 "free" debits a month, but never use debit except in emergencies. With debit, your cash is transferred out almost immediately. With credit, it's moved later. In theory, you'd get disputes resolved much easier if the merchant doesn't already have your cash.

Re:Do Canadian credit cards for sub $10?

[Minwee]

So how do you buy something larger than $50?

Then you have to insert the same card into a card reader, authenticate with a PIN and then approve the transaction. For smaller payments you can skip all that.

I get charged $0.50 when I use my debit card. So I never use it as debit.

The problem isn't with the concept of debit payments, the problem is that your bank sucks.

Re:Do Canadian credit cards for sub $10?

[barc0001]

"while they cannot have a free for CC use they can offer a rebate to cash customers"

I assume you mean a fee, not a free. In any case, that violates the terms and conditions that the merchant agrees to with their CC processor and they can face sanctions, higher fees or even just be dropped by the processor altogether if caught giving cash rebates. Some of the smaller merchants do it anyway and rely on the goodwill of their clientèle not to rat them out. Then some sanctimonious prick who objects to a .04c difference paying by CC on a pack of gum comes along and pitches a fit to the processor and ruins it for everyone. And this is why we can't have nice things.

Re:Do Canadian credit cards for sub $10?

[witherstaff]

I don't think a kid on a lemonade stand can officially accept paypal, isn't it 18 and older? Same with any merchant account which would let a kid mow a lawn or do all the normal things that kids can do for cash.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

I can't get the money back any other way.
No matter what I do it costs the same so I might as well use the CC.

Classic tragedy of the commons. Only regulation can solve that. The regulation needs to allow different prices for different payment methods.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

A certain amount is paid by the interest you pay. Most cards are between 7 and 14% APR. SO it' not just the merchant being screwed.

The problem I have with digital cash/electronic money is that banks charge me to get cash from my own account when I use an ATM. If the government pushes digital cash, it better not cost me anything to refill my wallet. I refuse to pay a fee to use cash.

Re:Do Canadian credit cards for sub $10?

[Tough Love]

If you want cash, you have to give me a discount greater than my card gives me. I am not here to make your store profitable.

What an ass. Did you ever think for a moment that cutting out the retail bank as middleman could make life better for you, the merchant and society in general?

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

When was the last time they proved they can be trusted? Eh? It has been so long, I don't remember.

Back in the days of Samuel, maybe? That was over 3000 years ago.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

I agree on that one.
I also shy away from it since you can't chargeback and no rewards. If they offered a discount I would use it.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

I thought the 2010 credit card reform stopped that.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

My credit card works fine on transactions below $10.

Where exactly is the need for this?

1. Credit cards do not do peer-to-peer payments. If my neighbor's kid mows my lawn, I cannot transfer $5 from my CC to his. If my daughter sets up a lemonade stand, she cannot accept CC payments.

2. Credit cards do not do anonymous transactions. Plenty (most?) people want to occasionally conduct transactions where neither the buyer nor seller disclose their identity.

3. Transaction fees. Visa and Mastercard charge high fees, and operate a cartel that keeps out competitors.

4. No assurance of payment. Even if the transaction is approved, the seller can still be subjected to a chargeback, and has no assurance of actually receiving the money.

You really think none this will happen with a MintChip? You might be able to transfer money for free, but it will likely cost you to deposit it in your bank account.

It's likely that the government will have a way to track your transactions, so anonymous transactions will be a thing of the past. Up until recently, I thought that they might need a warrant to look at a MintChip, but they're slowly removing those obstacles.

Most of this will happen at the insistence of users. You'll have more than a few who don't believe the MintChip should be anonymous because if they lose it, they want everything on it (in it?) to be recovered.

In any case, I will avoid this as long as possible.

Re:Do Canadian credit cards for sub $10?

[fahrbot-bot]

A 3% charge is likely less than the cost of dealing with cash. It must be counted, moved to the bank, change must be brought back to the store and so on. It is also easy lost or stolen.

Lets not pretend CCs offer no value to the store.

All true. I think the benefit of cash for the merchant is that it's easier to under report.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

This is an awesome feature at Tim Hortons. /Not joking, Nova Scotian here. Speeds things up every morning getting on the ferry to Hfx.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

They have too normally via their contracts. If they object and you can report them.

If you want cash, you have to give me a discount greater than my card gives me. I am not here to make your store profitable.

Actually you (as a customer) are there to make the store profitable. That's how capitalism works.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

The contracts typically allow a discount for cash, but disallow extra charges for using CC.

Re:Do Canadian credit cards for sub $10?

[gbjbaanb]

1. doubt many people have a paypal card, and many people don;t trust them.

2. anonymous transactions are overrated, but as long as its not an online transaction that is subject to all sorts of vetting, I'm ok with it.

3. just like cash, no fees, except what you pay in taxes in order to run the treasury and the mint.

4. Try going to a market stall and buy something really cheaply, if you get home and find its bust, you have yourself to blame. No big deal, you entered into the transaction knowing the risk. I'm sure you wouldn't pay cash for a new car, for example, but how about a bag of sweets or some fruit?

Cash works, just in a different way to credit, and I think we're good to have the option. Making cash electronic sounds sensible too, as long as its under the control of the government and not a private for-profit company that will have a different agenda to your transactions.

Re:Do Canadian credit cards for sub $10?

[smooth wombat]

The regulation needs to allow different prices for different payment methods.

It already does. A gas station I frequent gives a 3-4 cent discount for paying by cash than by credit. In reality it's not a discount but the actual cost of the gas to me whereas their credit prices are higher to reflect the added cost of the transaction.

Oddly, almost everyone I see pays by credit which leads me to believe either people aren't aware of the price difference, don't care about the price difference or are too stupid to realize how much money they're throwing away by using credit to buy their gas.

Regardless, I'm happy because I'm the one getting the lowest price.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

Then why do I not see the same behavior in stores?

Gas stations I believe are generally allowed to do that only on gas by contract. Go check what they do for candy bars.

I imagine many people like me spend $40 total per month on gasoline. Which means even at $2/gallon prices only saving $7.20 yearly, which seems to not be worth bothering with cash.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

I pay no interest as I pay off the balance in the grace period. I have 28 days before interest begins to accrue.

Re:Do Canadian credit cards for sub $10?

[h4rr4r]

I would be more likely to pay cash for a car than fruit.
For the car I likely have to go to the bank anyway for a bankcheck, so I might as well use cash.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

Since the merchant charges the same whether you pay by cash or card, it's the suckers who pay by cash who end up paying for this stuff.

Re:Do Canadian credit cards for sub $10?

[j-beda]

A 3% charge is likely less than the cost of dealing with cash. It must be counted, moved to the bank, change must be brought back to the store and so on. It is also easy lost or stolen.

Lets not pretend CCs offer no value to the store.

All true. I think the benefit of cash for the merchant is that it's easier to under report.

One of the reasons I like using my CC (in addition to making it easier for me to track my spending) is that it makes it more difficult for the vendor to avoid reporting. I want my vendor to pay all those taxes and I want my wait-staff to report their tip earnings, and pay the taxes due thereby. Gotta keep that national deficit under control, eh?

One thing I find slightly funny is when someone says to me - "Hey - do you want to commit a crime with me? If you can pay me in cash, I won't charge you the sales tax. That way I can not report it as income, and thus avoid paying at least 30% while still being able to deduct all of my business expenses from the income that I do report. Oh yeah, and that will remove your ability to sue me for bad service or not actually doing the work, or any complaint really."

Actually they usually just say: "No tax if you pay in cash" and leave the rest "understood".

I usually respond with "How often do you think the average person informs on tax cheats via http://www.cra-arc.gc.ca/gncy/nvstgtns/lds/menu-eng.html ? I have used it a few times, it is oddly satisfying."

Actually I usually just say "No, I don't think so." and leave the rest "understood".

Re:Do Canadian credit cards for sub $10?

[Ravaldy]

You are correct. We are stuck with it unless we shop at stores that don't offer the rewards. When it comes to computer gear or car parts, I have places I can buy stuff for 5-10% less but they won't take the CC. They remove the discount if I do. I know they aren't suppose to but I don't care and I won't report them for saving me money.

Most people don't realize that they pay 4% to get the 3% cash back reward. Makes me giggle inside :)

Re:Do Canadian credit cards for sub $10?

[Ravaldy]

Your lucky. I spend $430 on gas per month to travel to work. That's $258 yearly. Worth it for me.

Re:Do Canadian credit cards for sub $10?

[bws111]

If all else were equal more people would probably pay cash. But things are not equal. If you pay with a card there is no need to go into the store. If you pay with cash, you MUST go into the store. And once they have you in the shop, they can tempt you with all kinds of things you may not otherwise buy, or would buy somewhere much cheaper. Hmm, maybe I should get buy a coffee, soda, or water. Maybe a little snack would be good, etc. Furthermore, at least where I am, if you pay with cash you must pay BEFORE you pump the gas. Which means, unless you are very lucky, you will either have a not full tank when you leave (thereby requiring more stops at the gas station), or you will have to go back into the store AGAIN to get your change. All to save a measly 50-60 cents on a $50-60 fillup. No thanks.

Re:Do Canadian credit cards for sub $10?

[Darinbob]

Because they're charging you $3 extra. Sure, you get $1 of that back but you still lose out.

In the US there are a lot of gas stations that will give you a cash discount for this reason, and I often see places that have a minimum purchase requirement before accepting credit cards.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

$40 a month? I'm jealous. I spend $50 a week. It does add up, even if it comes out to being a free lunch once in a while.

Re:Do Canadian credit cards for sub $10?

[rjhubs]

Because the market cannot correct this itself, this is exactly the thing that requires government intervention.

If I hadn't already commented, I'd mod this up. Not only is this a good spot for government intervention but it is an acceptable place. Providing electronic ways to transfer value is no different than creating physical dollars for transactions.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

The PCN actually wants it the other way around. Most payment processors make you sign an agreement saying that you WON'T offer lower prices (or at least you won't ADVERTISE) for paying cash over using a card of some sort.

In effect, allowing better tracking of payments made.

The Canadian Govt. (like most governments) want to collect their taxes. low dollar value transactions likely should be conducted in cash (due to the insufficiencies of payment card networks with low value high volume transactions) but that would allow black markets to thrive
If someone in, say, the full time drug trade accepted only cash for services rendered, it would be pretty obvious to Canada Revenue Agency that someone who does not work, is making huge cash deposits to a bank account / paying a balance on a visa.

Paying cash at small shops all over the country for things as needed, they likely will never come up on the radar. (especially if they have ANY idea what they're doing, and pretend they are a "day trader" and actually PAY taxes on a decent portion of capital gains every year)

Re:Do Canadian credit cards for sub $10?

[smooth wombat]

hey can tempt you with all kinds of things you may not otherwise buy,

So you're saying our ADHD-adled society lacks self control and so to perpetuate the stereotype of those in the IT world shunning human contact, you'd rather keep spending more money. Got it.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

Hate to break it to you, but currency and "money" is by definition controlled by "issuing institutions".

If the bank of Canada wanted to, they could revoke all issued currency RIGHT NOW and begin issuing new currency "to the deserving few". If that happened, would you still accept a dollar from someone for services?

I unfortunately suspect not.

Re:Do Canadian credit cards for sub $10?

[Farmer Pete]

Even if I have cash, I'd rather pay my small amount with a credit card so I don't get change back. I don't like change, and I don't want to have it in my pockets. I've used a debit and credit card on $0.20 transactions before. Stores don't mind. That gas station I just spent $0.20 at is also the place I spend over $100 a month at. I can promise you, they are not the only station in town. If they anger their customers, they will go elsewhere.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

That's actually the exact same reason I only tip in cash. The government had nothing to do with the waiter's excellent service (like they did with food safety), so I'd rather just tip the waiter for a job well done than tip the government for no job done. IMHO tip taxes are among the most regressive and unfair.

Re:Do Canadian credit cards for sub $10?

[Randle_Revar]

I don't have cash back on my card, but you would have to give me a hell of big discount to keep me from using my card. I don't care about the money, it about cash being a pain in the ass. (not literally, I carry my wallet in my front pocket, like a sane person)

Re:Do Canadian credit cards for sub $10?

[Farmer Pete]

Please replace step 5 with ????? and step 6 with profit. Thanks. Seriously though, I am shocked by how many people don't pay off their credit cards every month. I mean, what part of, "I can't live on my income, so lets see if I can live on my income if my costs go up 20% (interest)" makes sense. I know saving money is hard, but while most people blame greedy bankers for the financial collapse, it was more due to individuals who borrowed more than they could afford to repay. People who should have saved money and not bought things. I blame individuals more than banks or Wall Street.

Re:Do Canadian credit cards for sub $10?

[j-beda]

Credit card processing has fees attached to it. Many smaller shops tend to have a large flat transaction fee and some percent. if you charge $.50 on your credit card it might cost $.11 in fees meaning the merchant only gets $.39 for the $.50 worth of goods from a $.10 transaction fee + 3%.

And if the majority of your money (or a significant fraction) comes from sales under a dollar, then you should probably not make those types of transactions. However if you think about the day's commerce as a whole, eating a few $0.11 fees over the course of a day would probably be much better than pissing off people trying to buy stuff by refusing their business or asking them for a minimum purchase. Probably even better would be a sign that says "We prefer cash, but we will take Debit (which costs us XXX) or credit cards (which costs us YYY) for your convenience." Let your customers feel generous when they pay you - build up that good will by not seeming to nickle and dime them. I suspect that such signage would be prohibited by the CC agreements however. The CC people don't want the customers to be reminded that the CC payment is costing the merchant anything.

Re:Do Canadian credit cards for sub $10?

[CanadianMacFan]

And if everyone suddenly shifted to paying with cash do you really think that prices would suddenly drop? Maybe a few small stores with good owners would do it. But I doubt the rest would. I know that when Loblaws started charging for plastic shopping bags due to the city of Toronto's fee they didn't drop their prices. For example the 4 litre bags of milk would take up one plastic shopping bag and it didn't get reduced.

Re:Do Canadian credit cards for sub $10?

[Farmer Pete]

Isn't all Canadian money fake money?

Re:Do Canadian credit cards for sub $10?

[Randle_Revar]

I see that at a few places around Seattle lately... I could use more money, sure, but I am not broke, and there is no way I am going to go find an ATM before filling up, nor am I going to start routinely carrying around cash. It is too annoying.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

One benefit is to bring currency back under the control of the government.

Currently, for credit, you are paying a tax to private corporations for no real benefit.
It makes sense to for governments to get out of the paper currency and get into electronic currency.

Re:Do Canadian credit cards for sub $10?

[Penguinisto]

I can agree with the concept, but seriously, the wait-staff?

I usually try to not be a dick to the waiters/waitresses, especially in this economy.

Re:Do Canadian credit cards for sub $10?

[Darinbob]

Many places give cash discounts.

Re:Do Canadian credit cards for sub $10?

[Darinbob]

It would be more convenient in the store as you have both cash and credit handy when you're standing in front of the clerk. But a self service gas station requires you to come into the store and pay in cash in person instead of just paying at the pump, so there's a larger convenience factor in using the credit card. Debit card is probably a good alternative.

Re:Do Canadian credit cards for sub $10?

[Penguinisto]

Then as I cannot avoid the increased markup, my way is still the best.

...until the town experiences a black/brown-out and during that outage you *really* need to buy diapers, formula, {insert critical item here}...

Re:Do Canadian credit cards for sub $10?

[mrbcs]

Next step to implement the mark of the beast.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

Except it's not. It's getting passed down to everyone, whether one uses a credit card or not. Unless there's discount for paying cash, one should always use credit card with rewards.

Re:Do Canadian credit cards for sub $10?

[nairnr]

So how do you buy something larger than $50? You have to change payment methods?

I get charged $0.50 when I use my debit card. So I never use it as debit.

I get unlimited free transactions with my debit card, so I use mine almost exclusively. The limit was strictly for the contactless tap to pay method. Anything more than your limit is required to use chip/PIN method of payment. Same card, different verification.

Re:Do Canadian credit cards for sub $10?

[Khashishi]

The presence of a viable alternative could change the market considerably. No longer will the vendor feel the need to accept credit cards. This would help break the stranglehold that the credit card companies have, and perhaps they will start competing by lowering their rates.

Re:Do Canadian credit cards for sub $10?

[Khashishi]

The contracts also typically require you charge the same price for goods whether it be paid for by cash or credit.

Is this still true? I thought that the antitrust settlement was supposed to change that. http://money.cnn.com/2012/07/13/news/companies/visa-mastercard-settlement/index.htm

Re:Do Canadian credit cards for sub $10?

[Khashishi]

But, is 3% less than the cost of dealing with MintChip? Because that is the question.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

This.

As a Canadian, I use my BMO issued Credit card for absolutely everything that I can use it. I use the Paypass feature at places that have the reader, and the Chip+pin at those that do not. The only places that do neither are the kiosk/ATM type of machines that are all still swipe-cards (Translink fare machines for one)

Every place that can take a debit card, can usually take a credit card. The few places that do not, can still take a debit card. But understand that the DEBIT card (Interac) in canada costs the USER of the card a fee, not the merchant.

Re:Do Canadian credit cards for sub $10?

[bws111]

No, you don't "got it". Thanks for putting words in my mouth though.

There are two reasons why gas stations use the 'discount for cash' gimmick, and neither of them really has to do with credit card fees.

First, is the 'get you in the store' discount. Second is 'trick people into thinking our gas is cheaper'.

Where I live the rules for gas station price advertising are set by the county, and I live on the border of two counties. One county just says that 'a' price must be displayed on the large sign visible from the rule. In this county, almost all of the gas stations have a 'cash discount', and THAT is the price that is displayed. Of course, most people do not pay that price. The other county says 'if you have multiple prices, they must ALL be displayed'. Not surprisingly the only stations that offer a 'cash discount' are in areas where people are most likely to make poor decisions once they are in the store (namely near colleges).

As for 'human contact', well, if that is your idea of human contact I feel sorry for you. I prefer the human contact of the family, friends, and coworkers that a stop at the gas station is amost always delaying. You go ahead and enjoy your human contact in the gas station (maybe the cashier will even touch your hand when giving you change!). In the meantime, I will be several miles closer to the place I really want to be (which is NEVER the gas station).

Re:Do Canadian credit cards for sub $10?

[IWannaBeAnAC]

Merchants can charge additional for using a CC in Australia, since a few years ago. I think it cannot be more than the fees associated with the CC purchase. Its quite common now to pay a "credit card fee" with purchases, both online and in stores.

Re:Do Canadian credit cards for sub $10?

[icebraining]

The keyword is Canada. Not everything revolves around the US.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

I get 1% back on most purchases and 5% back on some.

I often see this mentioned as a big reason to use credit cards even when otherwise cash might do. Point was raised by many previous commenters, too. And I'm finally moved to a reply.

Does no one see this as the classic prisoner's dilemma that it is?

Any individual acting in self-interest will reach the conclusion to always use a credit card. But, collectively, is this smart? The banks aren't in the business of giving away free money. That 1% comes from the fact that the payment processors are charging the merchants a heck a lot more than that for the privilege of handling the payment. All those transaction fees ultimately show up as higher prices paid by you, the consumer.

So in reality, the customer is paying 3-5% more, but they feel good because the are getting "back" 1%, while the payment processors make out with several times that. And oftentimes these 1% "rewards" will have conditions on them making it harder to spend, too.

Think about it: suppose the town wanted to increase the sales tax by 3 to 5%. How would you feel about that? At least in the case of local taxes, the money stays in your community. With payment fees, it goes elsewhere.

And it adds much needless complexity to life.

Before, you'd buy what you need, count out the cash, receive the change, glance that it is what it should be, and - Done! Finished. You never ever have to think about that transaction ever again.

Nowadays, there's the transaction at the store, like before. But now the receipt is saved rather than tossed, because it'll be needed to cross-check the card statement. Then the statement arrives and it's time to again re-visit all those purchases of meals, soap, batteries, and other day to day miscellaniaa. Then write a check or sign on to the bank's site to pay it off. And then remember *that*, for *next* month, to be sure the correct amount was debited / the check cleared, and that the payment was applied properly. And finally, there's the 1% "rewards" to keep track of and think about.

And that's when things all work correctly. Add countless hours on the phone straightening things out when they don't. Which, in my experience, reliably happens at least twice a year.

Do you really like that much accounting bullshit in your life?

It's a nifty game they're playing. The "rewards" are psychologically addicting. Get people hooked on the convenience, and on the "rewards" cleverly disguised to hide the fact it's money coming out of your own pockets to "give back" to you. And put up these obnoxious contracts preventing the merchant from giving preferential treatment to anyone who doesn't use their payment "services". All in all, it's a prime target for gov't intervention and the introduction of workable alternatives. IMHO.

(Aside: I had composed this in libreoffice (on linux, if that matters). Why's slashdot insisting on turning all the quotes and apostrophes into "Ã(TM)"? What a PITA! Had to preview this a dozen times finding and correcting them all.)

Re:Do Canadian credit cards for sub $10?

[j-beda]

I can agree with the concept, but seriously, the wait-staff?

I usually try to not be a dick to the waiters/waitresses, especially in this economy.

Sorry? You don't think the wait staff should have to report all their income? Why should the wait staff be treated any different than the janitorial staff? It's not like I'm advocating cutting their pay, just making it harder for them to cheat. I don't know how the typical business treats CC tips - to the waitstaff just take cash out of the till or is in included in their paycheque? With the CC tip, it is also probably more difficult for the wait-staff to cheat their colleagues out of their share for places that distribute the tips between the waiters and the dishwashers or whatever. On the other hand, I would not be surprised to find that some owners don't give all the CC tips to the servers, or who charge the CC fees to the tip income.

Now if you want to argue that the tax rates at the low end are too high, or that minimum wage should be higher I probably would agree - (in Canada Minimum wage seems to be about $10/hour depending on the province, with only a few exceptions of 10-20% - http://en.wikipedia.org/wiki/List_of_minimum_wages_in_Canada )

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

People who should have saved money and not bought things. I blame individuals more than banks or Wall Street.

And who's responsibility is it to not give free money to people you already know at the time of the loan will not be able to repay it? This is what "subprime mortgages" are, loans that are not likely to be repaid.

In capitalism, self-interest is king, and not accepting free money with no real consequences when you can't repay is antithetical to the core principals.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

I have an idea why the GoC would want an electronic currency: I bet every month your electronic currency sits unspent, another 15% will automagically find its way back to Government coffers like hell's own homing pigeon.

Re:Do Canadian credit cards for sub $10?

[Richard Dick Head]

Here's why...

Let's give a generous 5 cent discount, and let's say we drove in on fumes in a mammoth F-350 Super Duty with a 35 gallon gas tank.

Credit
35 * $3.55 = $124.25

Cash
35 * $3.50 = $122.50

Yield: $2.25

Meh...to make matters worse, my local bank branch is about 8 miles away round trip. If I were to drive there first to get cash..(1/20MPG) * 8 miles * 3.50 dollars/gal = $1.40

Adjusted Yield: $2.25 - $1.40 = $0.85

That adds up to about how much change I lose a week when I do carry cash.

That being said, I go out of my way to pay cash at local small businesses, and when I tip. Its just a courteous thing to do. And if you're a hard nosed bastard, those people probably own homes near yours, and if they go under they foreclose on their home, home values go down, and then the urban gentlemen start moving in. Before you know it, babies of a most peculiar character start coming out of your now drug-addled daughters...

You can't really argue the economics of using cash vs charge, since the banks have really done their math here and have made parity for the way most people live their lives. Using cash isn't practical, but it is the "right" thing to do.

Re:Do Canadian credit cards for sub $10?

[Prune]

Uh, cash _is_ government money, since there's no private currency in any developed country. Without loss of generality by ignoring coins, paper cash = promissory notes issued by the central bank. Making it electronic, as long as it's anonymous (which it is, as addressed in posts made by others in this discussion), doesn't do shit as far as giving government any more control than it already has. Government control over money comes from the fact that you can only pay your taxes in the government/central bank-issued currency, and your transactions are subject to taxes even if they're pure barter, or based on bitcoin or gold or whateverthefuck else libertardians will latch onto next.

Re:Do Canadian credit cards for sub $10?

[Prune]

Are you really that dense? When the small-margin convenience store seller isn't allowed to raise the price for a credit card transaction in order to make up for the processing fee, he raises the overall price instead so that the cost is subsidized by cash transactions. If the payment option discussed in the article gathers critical mass, said seller can, instead of raising his prices, set a minimum purchase amount for those few remaining, like yourself, who are stubborn enough to insist on using their credit card instead of the new, transaction-fee-free payment method (or cash).

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

Government already has control of all your money. What difference does this make? If the government wants to have a 50% tax on wealth, they can just declare that their bank accounts are so much bigger than yours.

Sure, I'd be reluctant to use this, but that's because I wouldn't trust the security and I don't get the advantage it has over real cash or logged and identified bank accounts.

Re:Do Canadian credit cards for sub $10?

[Jane Q. Public]

"Uh, cash _is_ government money, since there's no private currency in any developed country."

It's not the same thing, and if you think it is, you're deluded. Money is only money if other people accept it as money. The government may issue it (at this time, that is; it was not always that way). But the government doesn't CONTROL the money you have under your mattress. As long as other people accept it, it's still money.

Would you give the government the keys to your house? Why or why not? Would you give them carte blanche to mess with your bank account? Why or why not?

So why would you want to give them CONTROL over every penny you have? Just why?

Re:Do Canadian credit cards for sub $10?

[Jane Q. Public]

"And if everyone suddenly shifted to paying with cash do you really think that prices would suddenly drop? Maybe a few small stores with good owners would do it. But I doubt the rest would."

That may be so, but I don't see what it has to do with my point.

I was just making the observation that the costs are passed along. They're not "absorbed" by the business.

Re:Do Canadian credit cards for sub $10?

[dryeo]

How much time do you waste using your credit card for a 99 cent purchase? How much time is wasted in lineups due to people like you who don't mind wasting many hours a year? I love it when a store has their card reader down, suddenly one lineup is moving as cash is almost always faster. You might have someone slow due to counting out coins but it is still faster then some people trying all their credit cards to find one that still works.
On a 99 cents purchase it is always faster to flip a coin (or two if there is tax on the item) then read a credit card. Especially now that pennies are history and the smart stores always round down.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

What an ass. Did you ever think for a moment that cutting out the retail bank as middleman could make life better for you, the merchant and society in general?

And you are an idiot. I would not pay cash if I do not get a cash discount or can't use a CC. Or I just happen to not pay something on CC. Period.

Charge extra for CC and I'll pay cash.

Or give a cash discount like some places do (eg. 2%, or even 3%) and you get cash.

But no, stores want higher prices to cover CC fees but want cash anyway. Sounds like greed, greed, greed..

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

The banks and Wall St were spending (lending) more money than they made (got back), and that's why there was a financial collapse. They are to blame for the collapse. We are to blame for setting it up to happen again, mind you, by making incentives for this sort of behavior.

Re:Do Canadian credit cards for sub $10?

[mjwx]

My credit card works fine on transactions below $10.

Where exactly is the need for this?

You see, when you pay in cash the bank does not get to charge the merchant for accepting it. Thereby lowing their profit on transactions you make.

This, as I'm sure you understand cannot be allowed to continue.

Re:Do Canadian credit cards for sub $10?

[mjwx]

I am not here to keep a store running profitably.

Then the store is not here to help you.

If you insist on paying on your card for items that cost $3, dont be at all surprised when they cost $5 next week. This is what happened in Australia.

I'm a big believer in credit card surcharges because it makes the entire process transparent. Banks dont like it as they like people like you, who dont want to know how much of you purchases are profiting the banks.

Re:Do Canadian credit cards for sub $10?

[mjwx]

Most people lack your discipline. Credit cards cost these people money. You are part of an incredibly small minority, so try to see the big picture here.

But they dont lack his ignorance. Since when to banks give away money for free?

A credit card is more advantageous as you have more money. I get 1% back on most purchases

To the OP, he spends $10 and gets $0.10 back. So in the OP's mind he gets $0.10 for free from the bank.

But he never thought about how the bank gets the money. As we all know, banks dont do anything for free.

In reality, he's paid $10 to the merchant, the merchant pays $1 of that to the bank and the bank has given him $0.10 of that. As a result of this, the merchants profit has been cut so he has to raise the price of that good to $11. So now the OP spends $11 on a $10 item to get $0.10, causing a net loss of $0.90.

So that 10 cents came out of the OP's pocket out of the extra money he paid the merchant, he just never saw the other 90 cents which went straight to the bank. Banks love being able to use tricks like this, entice the credit addled to use the card by offering paltry rewards and charge the merchant for accepting the credit. Cash has a cost to it, but credit has a much larger one that can be measured as a percentage of that transaction (cost of cash cant be measured that finely, it's measured as a cost of doing business as a whole).

I used to run a business, cash was definitely cheaper. I'd reconcile handling fees and account for losses on a monthly basis, I'd reconcile EFTPOS fees nightly. What it cost me for cash for a month EFTPOS did in less than a week. In Oz, if a till (cash register) does not reconcile (match the outgoing and incoming docket with the cash in the drawer), we can legally dock the cashiers wages to recoup that, so a cashier had a serious disincentive to slip a fiver under the till.

If you run an online only business, the cost of electronic transfers is something you have take into account. This is why a lot of them accept PayPal, fees are a lot less than banks.

Re:Do Canadian credit cards for sub $10?

[Prune]

> But the government doesn't CONTROL the money you have under your mattress.

Sure it does: it controls its value by adjusting how much money it prints.

Re:Do Canadian credit cards for sub $10?

[girlinatrainingbra]

re: (Aside: I had composed this in libreoffice (on linux, if that matters). Why's slashdot insisting on turning all the quotes and apostrophes into "Ãf(TM)"? What a PITA! Had to preview this a dozen times finding and correcting them all.)

:>(
Slashdot does not have clean unicode support. Your linux installation probably has the locale set such that the fonts are set for unicode support, thus the fancy double quotes ' " ' are actually unicode fancy curly quotes instead of the simpler straight-line-ASCII code quotes.
.
If you hunt around on slashdot, you'll find quite a few comments about how the Thorn character is not supported, thus pissing off the Icelandic contingent, and various other and sundry characters also cause problems. /. should clean up its act and allow unicode and UTF font support.

Re:Do Canadian credit cards for sub $10?

[Xest]

Same in the UK, problem is some companies took the piss and charged more than the fee - i.e. rather than 3% they charged as much as 20% and pocketed the rest.

That practice has just been stamped out thankfully, though it didn't stop an airline doing it to me the other day, which reminds me, I have a complaint to write and a refund to demand.

Re:Do Canadian credit cards for sub $10?

[Stormthirst]

I get the same discount if I'm using a debit card - 3.5%. And my bank doesn't charge me for using my debit card - win/win. The annoying thing is about it is that you have to pay in the store. You can't pay at the pump and get the same discount. Which is retarded.

I'm spending closer to $40 per week, but I'm on the road a LOT. The $2 here, $2.50 there makes a difference in the end when I'm filling up every week.

Re:Do Canadian credit cards for sub $10?

[Stormthirst]

I can get the same discount if I use my debit card, so I do get the $2.25 discount.

I don't quite understand why the Canadian government need to do this. There are banks which offer free personal banking - including Debit Card use.

Re:Do Canadian credit cards for sub $10?

[Stormthirst]

Then you are unusual in that - as am I. Most people, particularly poor/poorly educated don't realize they get charged a huge interest rate. 7%-14% is way lower than anything I've seen round here (in Canada). More like 19% - 30%. And the UK was no different when I was living there.

Re:Do Canadian credit cards for sub $10?

[bluefoxlucid]

Oddly, almost everyone I see pays by credit which leads me to believe either people aren't aware of the price difference, don't care about the price difference or are too stupid to realize how much money they're throwing away by using credit to buy their gas.

My tank is 12 gallons and I'll put high-octane gas in even though I have a non-performance car. At $3.89/gal instead of $3.49, it costs me about $5 more out of some $42. The upshot is that Shell V-Power gasoline has better detergents that keep my engine in better shape, reducing long-term maintenance costs. BP Invigorate is just a fancy trade-name for "we put all that stuff in all our gas," so I get regular gas at BP.

At 4 cents per gallon savings, you're saving about 50 cents a tank. Maybe $2/mo. Mind you, all my purchases go to Mint, and I get to see my expenses and optimize them out; that's how I reduced my expenses to near-nothing and became rich. It's worth the $2.

Re:Do Canadian credit cards for sub $10?

[bluefoxlucid]

No I spend $180/mo. I've decided I'd rather spend $2000 on a really nice bicycle and upgraded wheels (REV22) and bike to work. Last time I did this, I saved more money in 5 months than the bike cost ($400 plus gear... I saved some $1800 outright between insurance and gasoline, plus wear-and-tear which was like... 95% of my car's wear-and-tear). This time, I don't have the insurance drop, so I expect the payoff to be in terms of physical and mental health--an unpredicted benefit last time, but this time it's well-known.

Soon I'll spend $40/mo on fuel.

Re:Do Canadian credit cards for sub $10?

[S.O.B.]

If merchants added the CC service fee then you could pay $100 cash or $103 with a CC. That's why there should be a law that CC fees have to be added on just like sales tax.

After all, for the consumer, a fee is no different than a tax except that it goes to different bloodsucker.

Re:Do Canadian credit cards for sub $10?

[bluefoxlucid]

High interest rates on credit cards are a red herring.

Let's say I have a card with a $3000 balance and I pay 10% interest. Let's say I also have a car loan with a $30,000 balance (hey I bought a new Audi) at 2.5%. I have $3000, which loan do I pay down?

Every person I ask this question says pay off the credit card because holy shit 10% interest. 10% of $3000 is much more than 2.5% of $3000.

In 1 month, I'll pay $25 of interest on $3000 at 10%. On the other hand, I'll pay $62 of interest on the car loan at 2.5% in that one month. For a 5 year car loan, the first payments' principle is about $470, with $62 interest accrued per month, so a total payment of $532 just about. If I put that extra $3000 straight on my car payment, I instantly save $390; whereas if I make $263 payments on my credit card to pay the $3000 balance off in 1 year, I wind up spending $165 in interest.

Shit-tastically high interest rates are less evil than shit-tastically high balances.

Re:Do Canadian credit cards for sub $10?

[bluefoxlucid]

Back pocket, but I spent $109 for a wallet that's ultra-thin and stays ultra-thin when loaded with cash and 6 cards. I had Wal-Mart $10 wallets that were thicker than this empty, and sizable bricks when loaded.

Re:Do Canadian credit cards for sub $10?

[Anonymous Coward]

Here in the netherlands, we had such a system. It was called 'chipknip' and it's being dumped in 2015, here the original article: http://nos.nl/artikel/489108-chipknip-definitief-weg-in-2015.html (google translate link doesn't work due to cookie wall).

The reason is that nobody uses it and PIN has taken over to replace it. For those not in the knowhow, PIN is what we call direct ATM payment. Here we use our ATM card to pay just like a debit card does. You do enter your personal PIN code to approve the transaction.

I know that in the US one can use a debit card or ATM card to make such purchaches in certain places, and I do think there's an overhead, but how large it is in the US at the least, I don't know, so if its even worth while to use, I don't know.

Re:Do Canadian credit cards for sub $10?

[Stormthirst]

My debit card is a perfect example of this. Neither I (I have 'free' personal banking), nor the store gets charged for the use of the card. I suspect they have a charge for keeping the terminal active but as I understand it there's no transaction fee. Which is a win win. The store gets their money direct into their account which reduces their liability and their accounting. I don't have to carry cash - especially loose change.

Re:Do Canadian credit cards for sub $10?

[fulldecent]

Post from Visa showing minimums are allowed. Based on Frank-Dodd act.

http://blog.visa.com/2010/09/02/minimizing-confusion-over-minimums/

Re:Do Canadian credit cards for sub $10?

[fulldecent]

99 purchase, after tax is really 10x. That's two bills out of your pocket and useless change put back in. And where are you shopping that they round down?

Re:Do Canadian credit cards for sub $10?

[Penguinisto]

Sorry? You don't think the wait staff should have to report all their income?

It's likely because of the minimum wage thing. I'll explain:

In the US, tips are the reason why minimum wage can be (and usually is) ignored for those working that particular job. Wages of $2.50/hr are not uncommon for a typical waitress, and sometimes the establishment forces them to pool the tips and/or share them with the bussing and dishwashing staff, etc. Some even require that a percentage of the tips go to the house (never understood that one...) Unless you're at some posh and busy restaurant, this really doesn't amount to an awful lot of income once it's all said and done. It's not like we're forcing Bill Gates to pay his 'fair share' or suchlike... quite the opposite for most folks who work it.

I guess my objection is this - the money isn't usually enough to be worth quibbling over, even on the scale of annual accumulation. The good ones work hard to make sure you're treated with respect and kindness, and do their best to give you a good experience. In this economy, folks aren't given to going out to eat as often, leaving less income for an already tough job. Finally, if zillionaires regularly avoid paying their 'fair share' of taxes by way of various loopholes (either here or in Canada), then what's so harmful about occasionally letting the little guy (or gal) get a break?

Re:Do Canadian credit cards for sub $10?

[dryeo]

Canada, no dollar bill or 2 dollar bill and pennies are now dis-continued so cash purchases are rounded. There are a few stores that have realized it's worth a couple of cents to always round down.

Re:Do Canadian credit cards for sub $10?

[Jane Q. Public]

"Sure it does: it controls its value by adjusting how much money it prints."

It controls that indirectly by influencing the market. But that's not what I was talking about. Apples and oranges.

Corporations and government don't currently have the kind of "control" necessary to come into your house and physically take your money, or to influence its value directly.

But if "money" is made all electronic, then they would have that control.

Re:Do Canadian credit cards for sub $10?

[Stormthirst]

I've never had, nor intend to have a car loan.

Re:Do Canadian credit cards for sub $10?

[Khashishi]

Which bank offers this? As far as I know, there's always an interchange fee for the merchant.

Re:Do Canadian credit cards for sub $10?

[HornWumpus]

That is fucked up math. What are you doing on /.?

You pay off the expensive money first then make the CC payment to the car principle in later months.

When I see convoluted comparisons like yours I know someone is rationalizing. If you could, you would go interest only on the cheap money until the expensive money is paid off.

Re:Do Canadian credit cards for sub $10?

[HornWumpus]

Which set of receipts? The ones we use or the ones we report to the IRS?

It costs far less to count/secure money then the marginal tax rate. Taking cash is like getting a big tip from some government leach that won't get his ivory butt scratcher this year.

Re:Do Canadian credit cards for sub $10?

[sinij]

It is variation of prisoner's dilemma.

Re:Do Canadian credit cards for sub $10?

[HornWumpus]

They accept PayPal because they are chumps. That's in the definition.

Re:Do Canadian credit cards for sub $10?

[Meyaht]

I suppose I should've said credit cards enable these people to piss their money away faster. I personally never learned much self discipline. My only recourse at this time is to avoid the things that I'm not strict enough to stay out of trouble with.

Re:Do Canadian credit cards for sub $10?

[RockDoctor]

It must be counted, moved to the bank, change must be brought back to the store and so on. It is also easy lost or stolen.

For most cash businesses that I've had dealings with, it doesn't work like that. One trusted employee does the cashing up of tills (for family-owned or franchised businesses, that's normally a member of the family), and puts the large majority of the small change and small notes beck into the tills as their "float" (so they can make change for the first hundred customers of the shift). Only the large notes go to the bank. The hardest part of managing this is keeping sufficient stock of little coin bags so that the cash cabinet can have dozens of little bags labelled "20x£1" for £20 in £1 coins, etc. The bags tend to disintegrate.

And if there's an accumulation of tuppenny bits ... well that's what you give to one of the minions when they need to go and get a couple of pints of milk for the canteen.

A coin-counting machine costs the equivalent of about 20 hours of a minimum-wage peon ; so if you want to do the sums on what your bank charges for handling cash, versus what it's worth while doing yourself, it's easy. (More rugged machines are probably more ; do your homework if your machine beaks down.

At some point you've got to trust someone in cash handling. Or stock handling. You've also got to trust your staff to not slip an advert for the opposition into the pocket of every customer.

Re:Do Canadian credit cards for sub $10?

[FreedomFirstThenPeac]

Your not there to make their store profitable? How naive. They can't exist if they are not profitable. You aren't there just to rip them off, so the symbiosis of consumer and merchant requires that (1) you be willing to give them enough profit to make their investment worthwhile and (2) they not be trying to make so much money that you decide to not give them anything.

Re:Do Canadian credit cards for sub $10?

[bluefoxlucid]

What do you mean "expensive money"? As I've pointed out, when you look at the amortization you see that paying X upfront on loan A saves you $1000, paying X upfront on loan B saves you $100. You would pay upfront on loan A, of course, because you're $900 richer that way. It has to do with how much solid interest you're accruing per month and how much of that interest you can make go away necessarily.

The way to figure out what loan you're most benefiting from paying down is to take the amount of additional payment you want to make and compare it to your payment schedule. Figure out how much interest you'd pay if you paid that down on the given payment schedule, and how much principle balance is paid down on that schedule.

For example, $1000/mo loan, $800 goes to interest (think 15 year mortgage at 4.25% on some $1000), $4000 extra payment, you're talking about 4 months at $3200 interest vs $800 principle, or a P:I ratio of 0.2. If you pay that $4000 upfront, what winds up happening is you skip roughly (($4000 - $1000) / $200) = 15 payments, at roughly $800 in interest per payment, you save about $12,000.

Compare that with a credit card with a $3800 balance and a high interest rate such that you pay $80 on that balance in a month (that's roughly 25% interest rate). If you pay in $1000/mo payments and take this down over the same 4 months, you'll pay roughly $80 + $60 + $40 + $20 = $200 in interest. $3800 / $200 gives you a P:I of 19, much higher than 0.2. What winds up happening is you skip roughly 3 payments, so you wind up paying $80 in interest and then knocking the loan out and skipping $120. You save yourself $120.

Assuming you had $4000 up-front and would have paid the other loan down with an extra $1000 per month, 4 months later your 4.25% mortgage really only costs you $3200, since you're hitting it hard up-front still--just slower. It'll take you 4 more higher-tier payments to dig down into the lower-tier payments, i.e. you hold high amounts of debt longer. Which is still more than the $200 that 4 month period. You're $3000 less rich.

Pay your extra money into the loan that the bank is taking a bigger chunk of money out of. If you give the bank $1000 and they keep $800 of it and take down your balance by $200, you want to take the option to drive your balance down further RIGHT NOW before you accrue more interest. What's happening here is, for all intents and purposes, you're paying interest on $1000 you borrowed; then you pay that down, but you continue to pay interest on $800 more dollars you borrowed in the process (your interest accrued, which is the cost of the loan, and which you need to pay back).

Of course I bought a house and a car and I'll be out of debt in 3 years and I make $65k, so what do I know? Those folks who make $85k and are in their 60s and finally finishing off their mortgages are probably better at this than me right?

Re:Do Canadian credit cards for sub $10?

[j-beda]

That's actually the exact same reason I only tip in cash. The government had nothing to do with the waiter's excellent service (like they did with food safety), so I'd rather just tip the waiter for a job well done than tip the government for no job done. IMHO tip taxes are among the most regressive and unfair.

No more regressive than any of the income taxes paid to other low wage earners. Whether or not the government had anything to do with the service, income taxes are still due. The wider the tax base, the better off we all are (well, except those who were not paying the taxes they were owing I guess).

Re:http://www.linuxadvocates.com/p/support.html

[fekmist]

Wait do you guys have anything to do with the Mintchip or something? Or does it have something to do with Linux? I'm a bit confused as to what you're asking of us.

Re:http://www.linuxadvocates.com/p/support.html

[flayzernax]

It looks like a linuxgerian scam...

Re:http://www.linuxadvocates.com/p/support.html

[h4rr4r]

This is a copypasta troll.
He spams this shit in many stories everyday.

Not sure why.

mint shit

[slashmydots]

Let me fast forward this a bit because MintChip was discussed on the bitcoin forums months ago. It's bullshit. It's set up completely wrong. It's horribly insecure. It's like a spy-on-you version of bitcoin. Even the encryption style was massively flawed from what I heard. It's absolute, utter crap.

Re:mint shit

[h4rr4r]

I am so sure the BitCoin folks have no incentive or ideological basis that might taint their view of a workable solution other than their own.

Re:mint shit

[Anonymous Coward]

To be fair, the implementation looks fairly dodgy:

A MintChip is a secure smart card chip, which may be integrated with a SD card for easier connection to computers and mobile devices. The card contains a private key signed by the mint, which is itself then used to sign transactions. When making a payment, the sender gets the ID of the receiver. The chip decrements the balance stored within it and signs a message stating it has done so and that the recipients ID should increment its balance accordingly, this message is then presented to the recipient's chip which verifies the signatures and adjusts its own balance.

http://en.wikipedia.org/wiki/MintChip

Re:mint shit

[Anonymous Coward]

I don't trust anything bitcoin activist have to say.

Re:mint shit

[CastrTroy]

I really don't see how a currency can be digital, decentralized, and anonymous. If that's the case, then whatever amount the card says it has, it has. Sure you can put in all kinds of encryption and digital signatures, but at the end of the day, you're trusting the card. It's like those photocopier or transit pass cards. If they aren't centrally managed, eventually they all get cracked. And the incentive to crack these things will be very high. Even if you have to make 10,000, $10 transactions to make it worth your while, people will still do it.

Re:mint shit

[Anonymous Coward]

Clearly you've never been to a 'modern' society such as Japan. Anonymously purchased and recharged digital cash cards are the norm.
 

Re:mint shit

[bluefoxlucid]

Dude, I can totally hack that and make it output infinite cash.

Re:mint shit

[coinreturn]

Dude, I can totally hack that and make it output infinite cash.

Great. You are now a millionaire, nay a billionaire. Congrats.

Re:mint shit

[wronkiew]

You really need to familiarize yourself with how crypto-currencies work. To a certain extent, it is the burden of the issuer to prove that their system is secure, so you can rail on how insecure digital, decentralized, and anonymous currency is all you want. However, consider this. Bitcoins are being used in everyday trade right now. The market cap is > $1B last I checked. The FIRST TIME the core algorithm is hacked to give someone free money, the total value of the system drops to $0. That $1B represents the discounted future value of the currency plus a certain level of speculation (and minus a large chunk of investors who don't understand what they are looking at). It includes our collective best guess as to how secure the system is. That is a lot of confidence in the system. MintChip sounds pretty lame, but it shouldn't taint the efforts of better cryptocurrencies.

Re:mint shit

[Anonymous Coward]

Actually some of us are in favor of MintChip (or something like it) because irreversible anonymous online payments make it much easier to buy/sell Bitcoin; right now most people go through pain-in-the-ass online exchanges or trust some dude to snail mail the cash. Our main concern is that it should be more secure against... well... people like us. :-P

Re:mint shit

[Anonymous Coward]

You really need to familiarize yourself with how crypto-currencies work ... The FIRST TIME the core algorithm is hacked to give someone free money, the total value of the system drops to $0.

Did you know that Bitcoin was already hacked once to give the attacker a bazillion Bitcoins? They patched the bug and restored to the last checkpoint. Keep in mind that everyone has a full record of all transactions, so hacks like these are easy to detect and repair.

Re:mint shit

[Anonymous Coward]

True, but their they are honest, unlike the rest of the world.

Re:mint shit

[aristotle-dude]

Clearly you've never been to a 'modern' society such as Japan. Anonymously purchased and recharged digital cash cards are the norm.

Clearly, neither have you. Many cabs there only accept cash while some accept only cash or JCB credit cards and Japanese Debit cards. The trains/subways have a system called Pasmo/Suica which is either an RFID card that is reloadable through a machine with cash or incorporated into some Japanese specific cellphones. You can also use that Pasmo card as a Tap and pay card at some convenience stores such as AM/PM to pay for small purchases and some vending machines.

Some department stores do accept Visa/Mastercard and Amex but the majority of places accept only cash.

How do I know this? I spent a couple of weeks in Tokyo the year before the big earthquake.

Re:mint shit

[complete loony]

[citation needed]

Many bitcoin services have been hacked and lost the keys to their coins. But the bitcoin network has not been hacked, nor has any hack resulting in theft been reversed.

Re:mint shit

[NewYork]

Bitcoin is NOT immune to https://en.m.wikipedia.org/wiki/Pump_and_dump

Re:mint shit

[wronkiew]

Yes, you're right. I forgot about that incident.

Sounds like the Dutch "ChipKnip"

[Anonymous Coward]

Sounds a lot like the now pretty much dead "ChipKnip" scheme we had in the Netherlands. It wasn't practical; it died.

Re:Sounds like the Dutch "ChipKnip"

[Anonymous Coward]

Not dead yet; I still use it every weekday for cafeteria meals...

Also, the ChipKnip is derived from the Belgian proton card, started a year earlier (1995).

However, this MintChip thing is different, more like the PingPing (https://en.wikipedia.org/wiki/Pingping_%28payment%29) already in limited use, again, in Belgium.

Re:http://www.linuxadvocates.com/p/support.html

[Anonymous Coward]

I don't know... However I would like to know if this MintChip will also flash her underage boobs for some space-billions.

How does the security work?

[Anonymous Coward]

How does the MintChip prevent double-spending? If the Royal Canadian Mint is signing my private key, does that mean a Mint employee could spend my cash anonymously?

Re:How does the security work?

[Luckyo]

In a same way that a bank employee can spend your cash anonymously I imagine.

lets stop beating around the bush

[nimbius]

credit cards have been digital currency for decades, wallstreet doesnt trade in physical bonds or stocks anymore, theives steal credit cards more than cash, and the concept of a 'processing fee' in an era of such ubiquitous computing is absurd. the easiest way to digital currency is to use the system in place and be gone with visa and mastercard endorsed 'debit' cards.

It's called a debit card

[Anonymous Coward]

We already have electronic money, it's called a debit card

Re:It's called a debit card

[0123456]

We already have electronic money, it's called a debit card

And they require a bank account, require the receiver to have a merchant account of some kind, and often have high transaction fees for small payments.

Free Code For Canada

[cheatch]

Function PrintMoney(Currency money) As Currency
          SendMoneyToCheatch(money)
          PrintMoney = money
End Function

Could this be used to pay off the national debt?

[Anonymous Coward]

Since there's no physical cost involved to creating virtual currency, and, in particular, purely virtual currency is far easier to remove from circulation as needed (no more than a flick of a switch), to keep excess from flowing back into the Canadian economy, and therefore devaluing our dollar, couldn't this be used as a mechanism to start getting Canada back to where we were, financially, 40 years ago or so, when Canada did not have a national debt at all?

like the mafia, they want their cut and control

[iggymanz]

the end game will be cashless society so banks and the government in their pockets get a piece of any action. If government labels you a "terrorist", your ability to buy, hold money and sell gets instantly revoked. convenient way to make everyone in an area come in for "questioning" just to get their "privileges" back

Re:like the mafia, they want their cut and control

[h4rr4r]

Can't happen.
Prisons prove this. They find some good to use as currency.

Re:like the mafia, they want their cut and control

[iggymanz]

you mean goods that soon will all have embedded rfid in them?

Re:like the mafia, they want their cut and control

[h4rr4r]

So then people will place the item in the microwave for a couple seconds, or use gold, or silver, or shiny rocks or bottle caps.

Re:like the mafia, they want their cut and control

[Anonymous Coward]

Since when are all goods going to have embedded RFID chips? Don't tell me you take Info Wars and Prison Planet seriously...

Re:like the mafia, they want their cut and control

[iggymanz]

anything without functional rfid will be considered counterfeit and violation of IP.

Re:like the mafia, they want their cut and control

[iggymanz]

because putting them in livestock and produce and good from early manufacturing process onward is the stuff found only on wingnuts websites?

Re:like the mafia, they want their cut and control

[Anonymous Coward]

So that's why you've provided zero citations?

Re:like the mafia, they want their cut and control

[Anonymous Coward]

Can't happen.
Prisons prove this. They find some good to use as currency.

Wrong. We already live in that world.

I guess you've never had your bank account seized. I have. It's not fun. There ARE other ways to survive, (necessity forces you to find them), but it's a huge pain in the ass and the fear of being booted from the system is great enough to keep most people in line.

Re:like the mafia, they want their cut and control

[moeinvt]

Check out the video "Money as Debt".

The bankers and government already get their piece. It's the nature of the whole debt-based money system.
The vast majority of the money supply is created by private banks in the form of loans. The money itself is a debt instrument which has been borrowed from the bankers and has an interest obligation. Thus, the game is already rigged in their favor.

It's the greatest scam in the history of the world. Bankers have usurped the monetary power from almost every sovereign government on the planet. That's why they get fabulously wealthy while the vast majority of people struggle under a burden of debt.

Re:like the mafia, they want their cut and control

[moeinvt]

Would you take Dr. Katherine Albrecht as a more authoritative source?

http://www.katherinealbrecht.com/index.php?option=com_content&id=102%3Afirst-chapter-of-qspychips-how-major-corporations-and-government-plan-to-track-your-every-move-with-rfidq&Itemid=94

Just because it's on infowars, doesn't mean it's wrong.

Re:like the mafia, they want their cut and control

[iggymanz]

don't need citations for mainstream news and facts; the use of embedded rfid in produce, livestock and components in manufacturing is increasing. search engines can be your friend

A New Currency?

[Anonymous Coward]

A technique for delivering an already established currency is what I'm reading. Still pretty cool nonetheless.
Commence the subcutaneous microchipping!

agreed - cahs is very costly

[peter303]

You have to have a cash register, clerk, physical visit to bank, tabulation, possibly armoured service.

Re:agreed - cahs is very costly

[CastrTroy]

Exactly. All you need to process credit cards is an iPhone/Android phone and and adapter from Square. Flat percentage on all purchases, so you don't have to worry about small purchases getting consumed by transaction charges.

MintChips?

[TechieRefugee]

Would the servers that handle transactions run Linux Mint? Okay, I'm sorry; it had to be done sooner or later.

I want "BitCoin" backed by gold or "hard" currency

[davidwr]

I want a version of BitCoin that is fully-pre-mined and backed by something I trust, like Au or USD.

Think of 21 million "USD-bitcoins" backed by $21B held by an entity as trustworthy as the US Government. The convenience of e-commerce with the anonymity of cash.

Or, 21 million "Au-bitcoins" backed by 21M troy oz. of gold held by an entity MORE trustworthy than any government.

Or, on a smaller scale for less-weathy "backers," $21M or even $21,000 or 21 thousand or 21 troy ounces of gold. The "$21,000" version might be done by a local chamber of commerce or local bank as the modern-day version of the "wooden nickle" as a "local currency."

just copy Hong Kong or Japan

[moxfactor]

we have the Octopus card in Hong Kong which works for convenience stores, subway and other transportation fees, and some retailers like Starbucks or our local supermarkets. it can only be topped up to 500HKD($64.43USD) at any convenience store or subway station and is anonymous. it uses an RFID chip, so it doesn't need swiping, just place close to the machine will charge the card. same goes for Japan's Suica card, which was only for Tokyo before but has just gone national. having an electronic currency card is wonderful, instead of having to pocket so much change for those times u need to use the payphone or pay for a one time bus ticket or buy something from a vending machine. and it's not attached to my credit or debit card, so i can hand it to a relative or friend when they visit me in Hong Kong, or i can buy a Suica card in Japan and use it just for the duration of the trip without worrying about daily exchange rates.

Re:just copy Hong Kong or Japan

[quacking duck]

we have the Octopus card in Hong Kong which works for convenience stores, subway and other transportation fees, and some retailers like Starbucks or our local supermarkets. it can only be topped up to 500HKD($64.43USD) at any convenience store or subway station and is anonymous.

While the card itself isn't linked to you by name and so can be passed around, wouldn't paying for the top-up require credit card or some other electronic funds transfer which could be linked to you (or someone close to you if they're topping it up)?

I suppose you could withdraw $500HKD in actual cash, then use that to pay for the top-up, but that kind of defeats the purpose of these cards...

Re:just copy Hong Kong or Japan

[Anonymous Coward]

You can top up the cards with a big bill at machines in every MTR station. Paying smaller amounts with the card until it is empty is really convenient, especially when you consider HK was a former British colony and as such has huge freaking coins.

Re:just copy Hong Kong or Japan

[Microlith]

While the card itself isn't linked to you by name and so can be passed around, wouldn't paying for the top-up require credit card or some other electronic funds transfer which could be linked to you (or someone close to you if they're topping it up)?

The Japanese, for instance, love cash. And when you top up a Suica card, it's done at the train station and they take bills directly, I have no idea if it's even possible to use a card.

It might be an inconvenience to take cash and put it on the card, but it's a nice air gap.

Re:just copy Hong Kong or Japan

[Anonymous Coward]

While the card itself isn't linked to you by name and so can be passed around, wouldn't paying for the top-up require credit card or some other electronic funds transfer which could be linked to you (or someone close to you if they're topping it up)?

I suppose you could withdraw $500HKD in actual cash, then use that to pay for the top-up, but that kind of defeats the purpose of these cards...

Explain the difference between these two. Especially the threat in the former that the latter defeats.

Re:just copy Hong Kong or Japan

[Randle_Revar]

RFID is a fucking terrible idea for e-money, credit cards, etc.

Re:just copy Hong Kong or Japan

[magic maverick]

Yeah, they're brilliant. They are "anonymous", except for the fact that they track your moments as you swipe to pay for stuff.
It wouldn't take much work for the authorities to find some photos of who was using which card... It's like cell phones, you're carrying around a device that all the time says "I'm here!". It's a police state's dream.

I was part of the original MintChip challenge

[kruhft]

After trying to get them to support Linux and even offering to do the development to get it to work with Linux they informed me that the hardware requires a binary blob and that Linux would never be supported.

Some other developer also found an easy way to pull money off the chip without permission using a bit javascript and I wasn't too impressed with the design and security.

There's a hard limit (1000?) transactions per chip so once you go over you need a new chip. I found that quite odd but maybe that's the limit to the amount of transactions this "anonymous" cash system can hold.

Re:I was part of the original MintChip challenge

[Anonymous Coward]

That's so strange, as the Wikipedia description would surely call for PKI and nothing else... Have a CA tree structure, have only national governments be Root CAs - enforced by the terminals and their terms (if you accept a non-approved key chain, that's your problem).

You'd need an audit trail (transaction signature needs to be stored in order to be verified through the CA chain all the way to the central bank), but the entire system could be anonymous by picking up one of these MintChips at your local bank for cash or using your debit or credit card (that would be a cash advance) or even balance from one or more other MintChips (counter restarts), assuming that the key on the card isn't associated to your payment in any way (I can see a lot of people not being able to help themselves from doing that, being very itchy to do it). You pay using your traceable means, bank issues you the untraceable means in exchange - ATMs could do it. If the itchy people do make an association to you, good luck to them proving you didn't just take the card and dropped it into a beggar's charity mug - making the entire idea of spying on you a bit pointless, and a waste of resources to implement it to begin with (not that this ever stopped anybody). You could make your payments by passing the MintChip to the recipient directly (they'd verify the CA chain on their terminal, and deposit the MintChip in the till, like normal cash).

It's when the rules begin to require you to register, forbid you to pass the MintChip itself to other people (in effect making it no longer subject to the phrase "I promise to pay the bearer the sum of X" - which makes currency anonymous) that you can call shenanigans. The 1000 transactions per chip limit may be just a security feature (they could remove the limit once it's proven safe - i.e. nobody can get infinite money unless they're the government that holds the root certificate).

I could see this expanded to general use (not just payments under $10) if implemented properly (PKI, proper keys and certificate chains), but the itchy people I mentioned above may not like it, so I don't see how they'd deal with it.

There's also the problem of theft. If a MintChip is stolen from you, does it help with its recovery in any way compared to cash? Most likely not. Help with convictions? Probably not either if the keys aren't associated to you (just like bill serial numbers aren't associated to you either). So it could be as good as cash. Yeah... not gonna happen, right?

Re:I was part of the original MintChip challenge

[Anonymous Coward]

Same. I was part of the first challenge. I asked if it was proprietary, they said yes and I lost interest. Security was flawed at many levels. I'd rather just keep using what we already have than this.

How is this news?

[Anonymous Coward]

Europe (at least the German speaking countries, don't know about others) have had that since the last Millennium: http://de.wikipedia.org/wiki/Geldkarte Furthermore, there's a replacement that is contactless (can't remember the name though).

Paperless Economy = Paperless Voting

[ThatsNotPudding]

He who controls the databases, controls everything .

Re:Paperless Economy = Paperless Voting

[Anonymous Coward]

He who controls the Spice, controls the Universe.

FTFY.

Just another debit card

[JustNiz]

âoeToday, people obviously use coins. They use bits of metal and bits of paper. "

Really? I doubt it. I for one hardly ever even carry cash. I always just use my debit card.

I honestly dont see the difference between this and a debit card as this system still uses a "broker" in the middle that knows the value of your account. other than this is more limited in its use (to $10).

Only If they came up with a way to eliminate the need for an account with the man in the middle then it would be a replacement for cash.

Re:Just another debit card

[Xest]

"I honestly dont see the difference between this and a debit card as this system still uses a "broker" in the middle that knows the value of your account."

Not if you top it up from any payment method and the only value it needs to know is what's stored on the card.

do not want

[stenvar]

A government run, patented, closed source electronic currency = do not want.

Re:do not want

[Randle_Revar]

Most currencies are government run, oddly enough

Remember Mondex? Or Visa Cash? Thought not...

[chiark]

BTDTGTTS. Visa Cash, stored electronic value on a chip (same chip as the debit or credit application) tried this: some cities trialled it, including the one I live in... Visa Cash needed the merchant to settle through the Visa network and was generally loathed because it was too slow to be useful.

Mondex was released before that, and was more sophisticated in that it allowed card to card transactions. This too was trialled in multiple locations.

Both have disappeared pretty much without a trace, usurped by credit/debit card payments - either contactless, or pin-free transactions - or other mobile based payment schemes. I still have the full visa cash specifications somewhere (runs to 5 very fat a4 binders), and the MasterCard Chip Vendor Services program award is used as a paperweight on my in tray...

Nice idea, shame about the implementation reality.

Secure?

[Mike Frett]

Not hardly, this site even had a story with the title "Smartphone Used To Scan Data From Chip-Enabled Credit Cards". There is also the Cambridge chip and PIN attack from 2010. It's all just a matter of time before getting your Credit Card defunded becomes widespread. It never ceases to amaze me at the amount of people so ignorant as to put their entire trust and own life in the hands of Technology; when Technology has proven to us it's unreliable nature.

Re:I want "BitCoin" backed by gold or "hard" curre

[moeinvt]

If it's government controlled or directly backed by USD, what's the advantage vs. a debit card?

If it was run by a private entity and backed by PMs, how would it avoid the same sort of government crackdown that we saw with e-gold or the liberty dollar?

The banker government is very jealous of its debt-based money monopoly. They won't hesitate to use violence against anyone who might provide an alternative. If Bitcoin operated under centralized control, they would have sent in the armed goons and shut it down already.

Re:I want "BitCoin" backed by gold or "hard" curre

[Cosgrach]

You trust the US Dollar? You are dumber than I thought. Gold on the other hand is way better. Perhaps you are not quite so stupid.... I am feeling conflicted now. Shit.

It's about time

[KeithH]

I'm fed up with banks, Paypal, Interac, and other middlemen taking a cut of every transaction. My governments have a legal right and a need to tax us but I didn't sign up for a 3% premium on all goods just to benefit the banks. I don't particularly trust my government but I don't distrust them as much as banks and other commercial enterprises.

Re: like the mafia, they want their cut and contro

[Dr_Barnowl]

Shoes, tyres, etc already have them. Walmart love them for stock control - which means one in each carton at least, and then one each on high ticket items. They've experimented with pickup loops on the shelf, tracking stock in real-time. They've run commercials showing a man billed for all the items in his pockets via RFID - not showing their hand much...

The only way to win is not to play

[radarskiy]

My grocery store does not take credit cards.

Re:The only way to win is not to play

[Darinbob]

Actually I remember 30 years ago when most grocery stores didn't take credit cards, and it was an oddity when you found one that did. There's a reason why you always see bank ATMs in use, because credit cards are nowhere close to being a currency replacement.

Re:The only way to win is not to play

[bluefoxlucid]

I only ever carry cash because A) the bar doesn't let me in without a cover fee in cash (subverted: the girl collecting the fee gave me her number, and I text her when I want in free); and B) vending machines don't take credit (except at the college, where they all have strip readers). Typically this is money I got for Christmas that I carry for the rest of the year; so maybe $200 in cash spent per year.

Re:The only way to win is not to play

[Darinbob]

Hmm, I spend about $200 in cash every month and a half or so. I just avoid credit cards if I can and I have cash. Why use the credit card with all the problems it can have? So the lunch truck gets cash even though they have a card reader (and sometimes charge extra for it) or those hipsters with a paypal or phone payment system. Cash at the drugstore, why not. Credit is basically for the very rare online purchases, at the gas station, or larger purchases.

Overall though I just try to spend less money.

Re:The only way to win is not to play

[bluefoxlucid]

What problems? Cash is annoying to deal with, I have to pay $4 every time I want to get cash or take a long lunch and work late to go to the bank. And then, I have to deal with Bank of America or drive 30 miles to the credit union. If I use an ATM, I need to remember my PIN somehow (I forgot I even had a card, and have no idea what the PIN is now...). Pulling cash and making a mistake can cost a lot of money--overdrafts happen, but that usually happens to poor people. And my cash purchases are untracked, so I don't know what I"m overspending on and don't know where I'm wasting money and need to trim my budget.

Credit cards on the other hand carry no additional fees for me. I don't have to count and carry cash. If my card is stolen or lost, I call and cancel it. I'm not responsible for purchases I don't authorize; they're canceled. If a merchant is a total dickhole, I can call for a charge-back and they'll be penalized about $30 on top of having to give the money back. Going over-limit on a credit card incurs no penalty, making it superior to checks for large purchases such as a $3000 stove or refrigerator or a $7000 heat pump for the house (mind you I'll back-load the card with a -$4000 balance before a big purchase, since I wouldn't accept the offer for a $15,000 credit limit--holy shit no). The police don't show up at my house if I buy something that costs $5000 on a card.

Re:The only way to win is not to play

[Darinbob]

No fees on ATMs for me if I use my own banks ATMs. Avoid Bank of America.

Re:The only way to win is not to play

[bluefoxlucid]

I have a credit union instead of the shithole banks around here, so I have one location to go to down in Ft Meade. Bank of America is the only place nearby, so it's mail in checks or go to BAC to get checks. I needed something local to get a bank check one day to buy a house. Annoying shit.

Sure, but that's not even a consideration.

[Anonymous Coward]

We could get rid of debt easily, any time we really wanted. And not by paying back the banks all the debt they created on our backs.

But the Canadian government, (or any Western government) is never going to take the necessary steps, (making banks and usury illegal, creating our own money instead of borrowing it all at interest from the global banksters). The controllers at the top see a lot of benefit to keeping a slave population in chains, and governments have little power to address the problem, let alone even see it for the most part.

I mean, this whole recent economic crash was engineered/allowed to happen for the exact reason of extending population/thought control.

Digital money is just another turn of the screw, not an attempt to make things better for the plebes.

Also.., the new plastic money Canada is issuing, (our new bills are printed sheets of plastic), smells like toxic chemical tire rubber or something. And they feel gross. If I didn't know that psychopaths are incompetent morons when it comes to systems management, I'd suspect that making physical currency unpleasant to the senses was a deliberate psychological ploy designed to pry people off the stuff.

Fuck you, Canada.

Re:Sure, but that's not even a consideration.

[mark-t]

It's my understanding that the only reason that the Canadian government ever started dealing with the private banks at all for their finances instead of the Bank of Canada, as they did before 1975 or so, is because when the government switched its fiscal policies to operate on a large annual deficit that they weren't ever really going to pay back, the Bank of Canada told them that wasn't acceptable, so the government started dealing with private banks instead.

So by my understanding, we need the government to return to its old fiscal policies of actually paying back the money that it borrows. If they did that, the BoC could lend them the money to pay back the private banks at a nominal interest rate (far below what the private banks charge), and the government could then pay back the BoC over a period of time, where the money is reinvested into our economy.

The real trick, of course, is convincing the Canadian government that they should actually try operating on a budget that doesn't involve borrowing more money than they can actually pay back in a manageable period of time.

Re:I want "BitCoin" backed by gold or "hard" curre

[Randle_Revar]

There is no reason for money to be based on anything tangible, and if you are going to do it, gold is a damnfool thing to use.

Re:I want "BitCoin" backed by gold or "hard" curre

[Anonymous Coward]

Issuers could avoid crackdowns by running Open-Transactions over Tor and physically mailing out the gold when it is redeemed. The actual transactions in OT are done with blind signatures on a third-party server. The issuer would create a Bitcoin-OTC identity (or whatever) so users could give you a positive non-scammer rating as someone who actually mails out the gold bars (kinda like Ebay).

Ripple could theoretically do this too, but the server software isn't available for download yet.

Real Reason

[DarthVain]

Many have mentioned, good reasons already. Such as the fees that are changed, the percentage that VISA/MC/etc... all charge, which is all passed on to customer, peer-to-peer transactions, etc...

The real reason is of course control, or lack of it. Pretty much all "electronic" currency right now is handled in 2 forms. Debit, which is governed by "Interact", and Credit Cards, which for all intents and purposes are VISA/MC. That is a lot of power consolidated into 3 groups, that are not "national" or at least not "national Canada". Given their recent actions against Wikileaks, one might argue they are "national US". Who at the whim of a national government decided to eliminate their services from an individual, who not only isn't, of that nation, but also wasn't physically in that nation, nor actually changed by anyone associated with that.

Anyway, one could argue that Mint is a POS, and given that the Canadian Mint is behind it maybe it is. However I think there is a very easy reason for it. Also the other electronic transactions, are exactly that, transactions, whereby various currencies may be used and exchanged (at high fees), where as the idea behind mint is that it is an actual currency... perhaps, I haven't really looked into it all that much to be honest.

In Canada it's not that way

[Anonymous Coward]

In Canada, debit cards aren't endorsed by Visa or Mastercard, it's not like the US. Instead, they are a direct link to your bank account provided by your bank.

Hello?

[Anonymous Coward]

Some people have offered the word 'surveillance'. Here's a word no-one is thinking of: counterfeiting. And another word, 'theft', but it is easy to prevent. But like with the current peer-to-peer system, how does one prevent counterfeiting? Modern printers and copiers are designed to not duplicate currency. How does one design card readers to not copy the digital 'notes'? DRM has been a bug-bear in the media industry for a decade and now it's failures will be injected into the monetary system. A secondary problem is turning a $10 note into a $100 note. This can be handled like other pre-paid cards where money can only be withdrawn. After that, a new card must be purchased. This will require cash registers to accept multiple cards to pay one transaction, which is already possible with credit cards.

No thanks

[SilverBlade2k]

Horrible idea.

I'd rather be killed than use this.

Already did this in Sweden

[CoolGopher]

Digital "change" was introduced in Sweden about 14 years ago. It didn't take off, mostly (as far as I understand - and this includes personal experience) because it was cumbersome to work out how much change you had.

Without a display on the card it meant either finding your personal reader (I still have mine somewhere), or a store where you could check. This lack of convenience was the deciding factor. Sure, it didn't have the wave-or-tap ability (it was good old-fashioned swipe), and card-to-card wasn't available, but those I never had a need for. Quickly checking whether I had enough "change" to go and grab a quick snack, I most definitely had. Unless this new system solves the display issue, I don't see this going very far. TFA doesn't seem to mention this aspect at all, so I'm going to guess they haven't addressed it.

Trust is by degree

[davidwr]

Do I trust the USD to be as useful next week and next month as it is today, plus or minus a margin of acceptable error? In other words, can I expect to use the dollar I receive today to buy groceries next week and pay the electricity bill next month without the value eroding a lot? Except for filling my gas tank and a few other high-price-swing purchases I routinely make, pretty much.

Do I trust it to be useful within an acceptable "99.9% confidence" upper bound on how much it will lose to inflation 1, 5, or 10 years from now? Yes.

Now, do I trust it to be around for my great-grandchildren, or to survive an "economy-ending event" like a revolution, war against an ally capable of defeating us, or natural disaster like the could-happen-any-time-in-the-next-million-years Yellowstone Supervolcano eruption? My confidence is much lower here.

Re:I want "BitCoin" backed by gold or "hard" curre

[davidwr]

Well, unlike unopened packages of cigarettes, gold doesn't lose its value in the rain.

On the other hand, you can't smoke gold. Cigarettes and (for the anti-USD cynics out there) USD$100 bills, on the other hand ...

France's Moneo

[manu0601]

France has Moneo. Is this the same kind of beast?

We just canceled this

[hackertourist]

The Netherlands has had a similar scheme ('Chipknip', or chip wallet) since 1996, and is now in the middle of phasing it out. Reasons to cancel it include insufficient popularity (people use their debit card instead) and high costs to convert the current (NL-only) system to European standards. Its popularity wasn't helped by a botched introduction of two competing systems in 1996, which was later followed by a merger.
I've used it mainly to pay for parking (parking ticket machines included Chipknip but no debit card facilities). It's convenient, but very insecure (no authentication via PIN or somesuch), so it was only suitable for storing small amounts of money. Still, it virtually eliminated the need to carry cash.