The part everyone ignores is that the cash also has a price for the stores or anyone with a lot of money. They have to spend a lot more time, effort and money on security for their cash. After a while putting it under your mattress just doesn’t work anymore. And it costs you 1 - 2 % per received payment, but you also “save” 1 - 2% by having your money on an account where you get intrest on it while your under the mattress stash just becomes worth less and less purchasing power a lot faster… It’s a slight win for banks (waaaay less employees and offices), but the entire gain of electronic payment is definitely not benefiting only the banks, that’s oversimplifing things a lot.
I do try to avoid places where I’m obligated to pay cash. I don’t want to collect coins, nor do I want to round up or tip up to round numbers to avoid getting coins.
When I worked at Target many years ago, one of my roles was the Cash Office.
I can confirm it was incrdibly tedious and expensive work. The store would do $100k in sales on a Saturday, and Sunday morning i would spend 3 hours counting uo the $10k of that which was cash. Plus another grand or so in checks.
Then there was the change to deal with making sure we were well-stocked on all the various coins. It’s been a while but I think we sometimes ordered Ones, Fives, maybe even Ten dollar bills too. All of which of course cost a premium over face value tl have delivered to the store. Plus I am sure it cost a decent amount to have the Twenties and higher picked up a few times a week. Then there was the cost of equipment - the registers themselves, the safe, the cash counting machine, the software, the special envelopes, the cash cart we used to move cash between the registers and safe, the double-locked doors in the cash room. The opportunity cost of dedicating a whole room to that which could have been retail or office space. The insurance on it all.
Aa much as I hate the control and privacy issues, I also absolutely understand why businesses hate using cash.
I disagree. For a very large volume of very small transactions the time it takes to process 1 digital payment is a fraction of the time it takes to process 1 cash payment (and giving back change). For very small transactions in digital payment there’s no entering PIN, no confirming, no thinking and change giving, no opening cash registry or even putting it in a pocket or pouch, it’s incredibly fast nowadays. I don’t even have to put my card in the machine, just hold it in front of it, seller doesn’t have to count or give back, it saves enormous amounts of time.
You also have to pay for the cash truck service to get it safely delivered to the bank unless you’re a VERY small business and can just carry it all on your person.
500k a month turnover is not a small store though. Also it’ll likely be more for rural places where stores are smaller.
Local grocery store for me doesn’t even crack 100k a month I’m pretty sure. I don’t think they’ll even get close to 10k a day on st. john’s day, let alone any other day of the year.
Don’t forget that cash also means more errors (which in sensible countries do NOT come out of the pocket of the clerk, but rather eats into the store’s margins) and requires extra insurance because there’s always that tiny risk of someone literally robbing the place. And sometimes the employees themselves will pocket some. You’ll fire them, but it’s not like you’re getting any back.
You also need a safe, though luckily that’s a capital expense rather than an operating expense.
You can more or less say that cash has a level of natural loss attached to it. I have no idea how it compares to the ~1.5% that you’ll have to pay for card payments, but it’s not zero.
A “per stop” cash pickup is about €30 in Europe. So scheduling a pickup when you earn €1500 would match the 2% CC charge.
For me that is very risk averse, but others may disagree.
10k turnover and a pickup a day is a 0.3% cost.
Errors occur with digital too (wrong code etc) and are less likely to be noticed by staff.
I do agree with the last point. The cost of cash is not zero, and my original point was that the cost of cash increases with volume. There is a crossover point where digital becomes preferable.
The part everyone ignores is that the cash also has a price for the stores or anyone with a lot of money. They have to spend a lot more time, effort and money on security for their cash. After a while putting it under your mattress just doesn’t work anymore. And it costs you 1 - 2 % per received payment, but you also “save” 1 - 2% by having your money on an account where you get intrest on it while your under the mattress stash just becomes worth less and less purchasing power a lot faster… It’s a slight win for banks (waaaay less employees and offices), but the entire gain of electronic payment is definitely not benefiting only the banks, that’s oversimplifing things a lot.
Then you have places like where I work where 2% is our the entire profit margin, pay me cash or fuck off.
I do try to avoid places where I’m obligated to pay cash. I don’t want to collect coins, nor do I want to round up or tip up to round numbers to avoid getting coins.
When I worked at Target many years ago, one of my roles was the Cash Office.
I can confirm it was incrdibly tedious and expensive work. The store would do $100k in sales on a Saturday, and Sunday morning i would spend 3 hours counting uo the $10k of that which was cash. Plus another grand or so in checks.
Then there was the change to deal with making sure we were well-stocked on all the various coins. It’s been a while but I think we sometimes ordered Ones, Fives, maybe even Ten dollar bills too. All of which of course cost a premium over face value tl have delivered to the store. Plus I am sure it cost a decent amount to have the Twenties and higher picked up a few times a week. Then there was the cost of equipment - the registers themselves, the safe, the cash counting machine, the software, the special envelopes, the cash cart we used to move cash between the registers and safe, the double-locked doors in the cash room. The opportunity cost of dedicating a whole room to that which could have been retail or office space. The insurance on it all.
Aa much as I hate the control and privacy issues, I also absolutely understand why businesses hate using cash.
For small, local, high volume transactions cash wins.
For large purchases over long distances or time periods, modern banking is more efficient
I disagree. For a very large volume of very small transactions the time it takes to process 1 digital payment is a fraction of the time it takes to process 1 cash payment (and giving back change). For very small transactions in digital payment there’s no entering PIN, no confirming, no thinking and change giving, no opening cash registry or even putting it in a pocket or pouch, it’s incredibly fast nowadays. I don’t even have to put my card in the machine, just hold it in front of it, seller doesn’t have to count or give back, it saves enormous amounts of time.
That time saving costs 2%.
You also have to pay for the cash truck service to get it safely delivered to the bank unless you’re a VERY small business and can just carry it all on your person.
$500 a month for a small store. About 0.1% of turnover.
500k a month turnover is not a small store though. Also it’ll likely be more for rural places where stores are smaller.
Local grocery store for me doesn’t even crack 100k a month I’m pretty sure. I don’t think they’ll even get close to 10k a day on st. john’s day, let alone any other day of the year.
Don’t forget that cash also means more errors (which in sensible countries do NOT come out of the pocket of the clerk, but rather eats into the store’s margins) and requires extra insurance because there’s always that tiny risk of someone literally robbing the place. And sometimes the employees themselves will pocket some. You’ll fire them, but it’s not like you’re getting any back.
You also need a safe, though luckily that’s a capital expense rather than an operating expense.
You can more or less say that cash has a level of natural loss attached to it. I have no idea how it compares to the ~1.5% that you’ll have to pay for card payments, but it’s not zero.
A “per stop” cash pickup is about €30 in Europe. So scheduling a pickup when you earn €1500 would match the 2% CC charge.
For me that is very risk averse, but others may disagree.
10k turnover and a pickup a day is a 0.3% cost.
Errors occur with digital too (wrong code etc) and are less likely to be noticed by staff.
I do agree with the last point. The cost of cash is not zero, and my original point was that the cost of cash increases with volume. There is a crossover point where digital becomes preferable.
Oh they can more than make up for the costs of dealing with cash by not declaring it as income. What sale? Waves hand. There was no sale!
Oh they can more than be happy with dying on the street when they’re sick. What hospital? Waves hand. There was no hospital!
Large majority of collected taxes serve just purposes in many countries.