The Cashless Society? It's Already Coming

HughPickens.com writes Damon Darlin writes in the NYT that Apple pay is revolutionary but not for the reason you think. It isn't going to replace the credit card but it's going to replace the wallet — the actual physical thing crammed with cards, cash, photos and receipts. According to Darlin, when you are out shopping, it's the wallet, not the credit card, that is the annoyance. It's bulky. It can be forgotten, or lost. "I've learned while traipsing about buying stuff with my ApplePay that I can whittle down wallet items that I need to carry to three": A single credit card, for places that have not embraced, but soon will, some form of smartphone payment; a driver's license; and about $20 in cash. Analysts at Forrester Research estimate that over the next five years, US mobile payments will grow to $142 billion, from $3.7 billion this year. "If I were to make a bet, I'd say that 10 years from now the most popular answer from young shoppers about how they make small payments would be: thumbprint. And you'll get a dull shrug when you ask what a wallet is."

Comments

Re:And back in AU.... min purchase $10

[mjwx]

We still have large amounts of grocery stores that still have min purchase $10 EFT due to high transaction charges.

I smell BS lies there from the shop owner being super stingy.

You'd likely be smelling your own statement then.

Merchant fees are killers for small businesses. Even at a minimum $10 per transaction a business is likely losing money on every EFTPOS purchase made.

I used to run a small business, it was not unusual for my EFTPOS costs would dwarf my staff costs. I used to sell computer hardware, so the MSF (Merchant Service Fees) were less of the transaction total costs compared to a cafe but they still hurt. Customers who paid cash or debit were brilliant (and got discounts because of it). MSF's have become a lot better since I was running my business, but they're still big enough to kill a small business.

Heres what a merchant pays:
- Monthly fees (services).
- Monthly fees (terminal).
- Per transaction fees (for debit, usually between $0.20 and $0.50).
- Per transaction fees (for credit, 1-6% depending on bank and card).
- Annual fees (yep, they charge monthly and annual fees).

So ignoring the monthly and annual fees, if you bought a $4 coffee on your credit card, $0.50 at least disappears to the bank, that's pretty much all the profit gone from the sale (and I bet you wonder why things cost so much in Australia).

People who try to force small businesses to accept cards without allowing a surcharge or minimum purchase are killing small businesses in Australia. However one of my favourite cafe's has a solution to people like you. The menu price for a coffee is $4.50 but the "secret" cash price is $4.00, it's a win-win for me and the business.