5 ms·

Pass the Payment Choice Act

74 points by DiabloD3 6y ago

benjohnson 6y ago
As long as companies can specify that exact change is required, I'd by ok with this. Having to break $100 bills adds a lot of stress to small business if they can't validate them.
- mindslight 6y ago
  As someone who makes it a point to pay in cash (pre-pandemic), I wouldn't have a problem with the ability to balk at $50 or $100 bills (even though fifties are the new twenties). It should probably be stated as a percentage of the transaction though - let's say a business could refuse to give change more than 20% of the total. That's restrictive enough that businesses would be free to adopt the strict policy (total has to be at least $84 to pay with a $100), or relax a bit to something reasonable (say $70 for a $100). edit: Thinking about it, a fixed ratio wouldn't work well, otherwise you'd need to spend $17 to guarantee paying with a $20. Good thresholds might be $80/$35/$10 to reflect the increased incentive to pass larger counterfeit bills.
  - pc86 6y ago
    The problem isn't (always) giving a lot of change, it's being able to verify that the larger bills are genuine. None of the fast food establishments near me will accept anything larger than a $20 and I'm positive there are folks going in there and ordering $40+ worth of food.
    - mindslight 6y ago
      The same thing happens with credit card fraud though. Insisting on small bills doesn't solve the possibility of giving away free product. Ultimately, the restaurant's incremental cost of providing $40 of fast food is pretty low. The main worry is giving out significant real cash in change.
      - coredog64 6y ago
        I thought fraud was on the bank for amounts over ~ $20 (which is why restaurants don't bother to check signatures/ID for typical purchases). They are on the hook for chargebacks and low-level fraud.
    - Slartie 6y ago
      > The problem isn't (always) giving a lot of change, it's being able to verify that the larger bills are genuine. That should be fixed by changing the bills' design to be more resistant to counterfeiting, not by effectively making them useless because nobody accepts them anymore due to rampant fraud. Most currencies in developed countries don't have this weird counterfeiting problem that the US dollar apparently has when it comes to higher-valued denominations (with "higher" apparently starting at 50$), so that's some evidence that there must be a lot of room for improvement.
    - colejohnson66 6y ago
      It’s not really fraud threats, but the fact that it “empties” your cash drawer. If someone is given change for $100 minus their order, you now have up to 4 less $20s, and a $100 that can only be gotten rid of through exchanging between tills/cash box or someone asking for $100 cash back.
votepaunchy 6y ago
> Furthermore, when consumers are forced to pay for goods and services in cashless transactions, they (as well as the businesses where they shop) are also often forced to incur added expenses in the form of network and transaction fees. I don’t understand this part. The vendor sets prices and knowingly forgoes cashless transactions. Surely they can be trusted to make an informed financial decision without this regulation (the arguments regarding cash-only customers and privacy are separate issues).
- deleted 6y ago
  [deleted]
umvi 6y ago
Cash has its own problems though - it's much easier to use it to avoid taxes, launder money, etc. when using cash. Privacy zealots act like perfect anonymity at all times is a human right and we should always work towards it at any cost, when really I think most people agree it's more of a privilege that should only be available under certain circumstances (in your own home, for example).
- lykr0n 6y ago
  I'd rather we be in a situation where we have to make sure businesses pay their taxes, then a situation where we can't pay in cash. Right now, the payment industry is very consolidated and Visa/Mastercard have a monopoly on transaction processing. It's expensive, and a privacy nightmare. Maybe when there is a government sponsored option that doesn't sell your information to anyone who wants it it'll be fine, but until then- No. There's also the big reason that there is large parts of our population that don't have access to the regular banking system for one reason or another. Once you get black marks on your banking record and get kicked out, it will be very hard to get back in.
  - toomuchtodo 6y ago
    The Fed’s Instant Payment network is due to be live in 2023 or 2024 (with supposedly minimal costs compared to credit transactions). It would behoove the EFF to lean on the Fed to roll that out alongside this legislation ("here's the problem, here's the solution"). Getting the unbanked and underbanked is a similar policy issue: support the post office operating as a bank with reasonable fees, as is done in other countries. What’s it cost to maintain deposit accounts at scale for Americans unbanked? Roughly $5MM-$10MM a year in administration expenses. This is a rounding error in the federal budget.
- chance_state 6y ago
  > Privacy zealots act like perfect anonymity is a human right and we should always work towards at any cost Why have an original take when you can argue against a ridiculous straw man?
IdoRA 6y ago
It is important to consider that cash is not “free” to accept and handle (consider the needs for safe storage and depositing, as well as losses due to skimming and other forms of theft). The overhead in handling cash, for some business sectors, greatly exceeds the transaction costs associated with credit and debit cards. An option that preserves privacy but doesn’t have the overhead of cash is needed.
- jliptzin 6y ago
  Yea, maybe large amounts of cash to the point where you become a target for armed robbers, but handling an average amount of cash in a retail location where most people pay electronically anyway is not really that hard. Isn’t this why Brinks exists?
  - coredog64 6y ago
    A loooooong time ago, I worked in convenience stores, and late at night we were required to keep less than 40 dollars in the register. If someone needed more change or bills that we didn't have, we could "buy" it out of the change safe, but that would only dispense 10-20 dollars every 30 minutes. The point here is that doesn't really require much money to be a target.
  - 477rruruurur 6y ago
    I got robbed twice over the course of a year while delivering weed (cash business) in California, I imagine pizza people face similar hurdles. Can't wait for cash to die personally.
- tzs 6y ago
  > An option that preserves privacy but doesn’t have the overhead of cash is needed. How about this? 1. Only require certain businesses to accept cash. Make sure this includes some classes of business that most people have fairly reasonable access to. Grocery stores and convenience stores, for example. 2. Require those business to sell prepaid debit cards for cash. The debit cards must have no extra fees for purchase. A $20 debit card for example would cost $20 cash. No ID is required to buy these cards. 3. The debit cards would be subject to the normal processing fees upon use. 4. Other business can choose to not accept cash, but they must access the prepaid debit cards, and cannot charge any fees for them that they do not charge for other non-cash payment methods.
specialist 6y ago
"How can you stop data thieves, data brokers, and police from snooping on your purchase history? Pay in cash." What's Apple Pay's privacy and security story? I know that I should know this. Apologies. I had understood that Apple Pay does some kind of token exchange, instead of sending PII and account details over the wire. So this stops all the "edge" attacks, like card skimmers. Are there any solutions (currently) that keeps Home Depot, for instance, from leaking or reselling my PII when I pay digitally?
- sirn 6y ago
  Network Tokenization (Apple Pay/Google Pay) exchange a token unique to {card, device, merchant}. This token is sent from device, to merchant, to acquirer, to card network, and to issuer without the need to resolve token to PAN in the middle (unlike PCI tokenization most payment gateway provides). AFAIK, three parties that are aware of a purchase history of tokenized cards are: Token Service Provider who provides the token, Token Requester who offer the tokenized service (Apple/Google in this case) and a card issuer. Apple Pay for example, uses First Data as its Token Service Provider. (I'm pretty sure Google Pay does as well)
shireboy 6y ago
I get the argument (and counter arguments), but regardless of where one stands, can we all appreciate the irony of the Electronic Frontier Foundation making an appeal for paper fiat?
- mindslight 6y ago
  Yes, the irony. But it's coming from the same place as technical people being horrified by the wanton adoption of Internet of Trash devices, and preferring simple appliances. We know there's a proper way (privacy preserving digital payments), and until it's there, we'll reject ersatz alternatives.
supernova87a 6y ago
The EFF says that being underbanked is the problem for people at the heart of this matter. So why doesn't it work on making more banks and credit cards available to those people? Harder, and more root cause, than just advocating for cash to be accepted, I guess?
- jmnicolas 6y ago
  You can dream of a utopia or you can change the world one step at a time.
  - supernova87a 6y ago
    By promulgating laws that don't solve the real problem but put responsibilities and costs on others to not-quite fix it?
    - colejohnson66 6y ago
      A big problem with card only businesses is that they prevent people who don’t have a bank account from buying. Sure, one could buy a reloadable or prepaid debit gift card, but those cost extra money just to activate. By keeping out people with no accounts, you’re excluding a large part of the population: children and poor people.
- steanne 6y ago
  http://www.campaignforpostalbanking.org/news/why-we-need-a-bank-at-the-post-office/ http://www.campaignforpostalbanking.org/news/why-we-need-a-b...
savant_penguin 6y ago
> This cohort disproportionately includes people of color and people with lower incomes. You know what disproportionately affects people of lower incomes? Other people imposing extra costs for doing businesses with them. I bet that the business refusing cash know a lot of a heck more about the added expenses of dealing with cash in their own business than me. This type of action could easily backfire making products more expensive for people who need it the most.
twoodfin 6y ago
Having now read the bill[1], I’m interested in the legal theory that would make it Constitutional. It’s not limited to interstate transactions (would defeat the point) or retail establishments engaged in interstate banking through their payment processors. What authority does Congress have to regulate whether a retailer in Wisconsin has to accept cash rather than only checks from local banks? [1] https://www.congress.gov/bill/116th-congress/house-bill/2650/text https://www.congress.gov/bill/116th-congress/house-bill/2650...
- tastyfreeze 6y ago
  Congress hasn't bothered with Constitutionality in a very long time. Positivism currently rules the floor.
- mindslight 6y ago
  IMO this seems like more of a clarification of existing law than actually new law. The only ambiguity has been "legal tender for all debts", where the businesses' argument is that they can revoke an offer based on how someone intends to pay. As things currently stand, one would be in the right to go into a "cashless" store, consume an item that was for sale, say you forgot your credit card, and offer to settle up in cash.
  - tzs 6y ago
    > As things currently stand, one would be in the right to go into a "cashless" store, consume an item that was for sale, say you forgot your credit card, and offer to settle up in cash. First you would have to successfully argue that there is a debt. The store might argue that you stole the item you consumed. It all depends on how you fit what happens in a store to the offer/acceptable view of contracts. Is it: 1. by putting the item on the shelf with a price tag, the store is making an offer to sell it at that price, and 2. by picking it up you have accepted the offer, forming a contract and now you owe the store for the item? Or is it: 1. when you bring the item to the cashier you are making an offer to buy the item at the marked price, and 2. when the cashier rings you up the store accepts your offer? Even if putting an item on a shelf with a price tag is an offer, rather than an invitation to treat, I believe I've seen at least one case that said that picking up the item isn't enough to accept--the offer is accepted and the contract formed when you actually pay. So even then consuming the item before paying would be theft.
mchusma 6y ago
Forcing people to accept dead trees is a silly solution to this problem. There are real issues in the credit card system, including: 1) huge cost of credit card transactions (they are about 2) lack of privacy options 3) disproportionate burden of credit card fees on the poor (the rich get great rewards, which is a kickback from credit card companies). The number one thing that could be done to make things better is to force credit card fees to be borne visibly and directly by customers at all times. This would force people to generally seek lower cost options. The number two thing would be to ensure there is a standard for any competing card network to come along and plug in. With these two things, you would ensure low cost processing options and the ability to compete on privacy features.
- ryanmarsh 6y ago
  Forcing people to accept dead trees According to the Bureau of Engraving and Printing , US “paper” currency is made up of 75% cotton and 25% linen.
- Slartie 6y ago
  Limit credit card fees by law to some amount that easily covers the actual transaction costs and then some, but does not leave endless room for crazy stuff like kickbacks that effectively eat up 80% of the fees and thus clearly expose that the real cost of transactions can't be more than 10-20% of the fees. There you go - Problem solved! No more "tax on the poor", but cheaper prices for everyone. There's even been a model for that for over five years in the European regulation regarding this topic.
- cmxch 6y ago
  There's also 4) too much ability to stifle competition from lawful but controversial individuals. On top of your plug in standard, promote reasonable and nondiscriminatory access as a requirement for payment processors. That way, controversial (but otherwise lawful) individuals would also be able to compete without interference.
lurchpop 6y ago
I don’t like the “unbanked” basis for these anti cashless arguments because they’ll just solve that problem.

74 points by DiabloD3 6y ago

As long as companies can specify that exact change is required, I'd by ok with this. Having to break $100 bills adds a lot of stress to small business if they can't validate them.

mindslight 6y ago
As someone who makes it a point to pay in cash (pre-pandemic), I wouldn't have a problem with the ability to balk at $50 or $100 bills (even though fifties are the new twenties). It should probably be stated as a percentage of the transaction though - let's say a business could refuse to give change more than 20% of the total. That's restrictive enough that businesses would be free to adopt the strict policy (total has to be at least $84 to pay with a $100), or relax a bit to something reasonable (say $70 for a $100). edit: Thinking about it, a fixed ratio wouldn't work well, otherwise you'd need to spend $17 to guarantee paying with a $20. Good thresholds might be $80/$35/$10 to reflect the increased incentive to pass larger counterfeit bills.
- pc86 6y ago
  The problem isn't (always) giving a lot of change, it's being able to verify that the larger bills are genuine. None of the fast food establishments near me will accept anything larger than a $20 and I'm positive there are folks going in there and ordering $40+ worth of food.
  - mindslight 6y ago
    The same thing happens with credit card fraud though. Insisting on small bills doesn't solve the possibility of giving away free product. Ultimately, the restaurant's incremental cost of providing $40 of fast food is pretty low. The main worry is giving out significant real cash in change.
    - coredog64 6y ago
      I thought fraud was on the bank for amounts over ~ $20 (which is why restaurants don't bother to check signatures/ID for typical purchases). They are on the hook for chargebacks and low-level fraud.
  - Slartie 6y ago
    > The problem isn't (always) giving a lot of change, it's being able to verify that the larger bills are genuine. That should be fixed by changing the bills' design to be more resistant to counterfeiting, not by effectively making them useless because nobody accepts them anymore due to rampant fraud. Most currencies in developed countries don't have this weird counterfeiting problem that the US dollar apparently has when it comes to higher-valued denominations (with "higher" apparently starting at 50$), so that's some evidence that there must be a lot of room for improvement.
  - colejohnson66 6y ago
    It’s not really fraud threats, but the fact that it “empties” your cash drawer. If someone is given change for $100 minus their order, you now have up to 4 less $20s, and a $100 that can only be gotten rid of through exchanging between tills/cash box or someone asking for $100 cash back.

votepaunchy 6y ago

> Furthermore, when consumers are forced to pay for goods and services in cashless transactions, they (as well as the businesses where they shop) are also often forced to incur added expenses in the form of network and transaction fees. I don’t understand this part. The vendor sets prices and knowingly forgoes cashless transactions. Surely they can be trusted to make an informed financial decision without this regulation (the arguments regarding cash-only customers and privacy are separate issues).

deleted 6y ago
[deleted]

umvi 6y ago

Cash has its own problems though - it's much easier to use it to avoid taxes, launder money, etc. when using cash. Privacy zealots act like perfect anonymity at all times is a human right and we should always work towards it at any cost, when really I think most people agree it's more of a privilege that should only be available under certain circumstances (in your own home, for example).

lykr0n 6y ago
I'd rather we be in a situation where we have to make sure businesses pay their taxes, then a situation where we can't pay in cash. Right now, the payment industry is very consolidated and Visa/Mastercard have a monopoly on transaction processing. It's expensive, and a privacy nightmare. Maybe when there is a government sponsored option that doesn't sell your information to anyone who wants it it'll be fine, but until then- No. There's also the big reason that there is large parts of our population that don't have access to the regular banking system for one reason or another. Once you get black marks on your banking record and get kicked out, it will be very hard to get back in.
- toomuchtodo 6y ago
  The Fed’s Instant Payment network is due to be live in 2023 or 2024 (with supposedly minimal costs compared to credit transactions). It would behoove the EFF to lean on the Fed to roll that out alongside this legislation ("here's the problem, here's the solution"). Getting the unbanked and underbanked is a similar policy issue: support the post office operating as a bank with reasonable fees, as is done in other countries. What’s it cost to maintain deposit accounts at scale for Americans unbanked? Roughly $5MM-$10MM a year in administration expenses. This is a rounding error in the federal budget.
chance_state 6y ago
> Privacy zealots act like perfect anonymity is a human right and we should always work towards at any cost Why have an original take when you can argue against a ridiculous straw man?

IdoRA 6y ago

It is important to consider that cash is not “free” to accept and handle (consider the needs for safe storage and depositing, as well as losses due to skimming and other forms of theft). The overhead in handling cash, for some business sectors, greatly exceeds the transaction costs associated with credit and debit cards. An option that preserves privacy but doesn’t have the overhead of cash is needed.

jliptzin 6y ago
Yea, maybe large amounts of cash to the point where you become a target for armed robbers, but handling an average amount of cash in a retail location where most people pay electronically anyway is not really that hard. Isn’t this why Brinks exists?
- coredog64 6y ago
  A loooooong time ago, I worked in convenience stores, and late at night we were required to keep less than 40 dollars in the register. If someone needed more change or bills that we didn't have, we could "buy" it out of the change safe, but that would only dispense 10-20 dollars every 30 minutes. The point here is that doesn't really require much money to be a target.
- 477rruruurur 6y ago
  I got robbed twice over the course of a year while delivering weed (cash business) in California, I imagine pizza people face similar hurdles. Can't wait for cash to die personally.
tzs 6y ago
> An option that preserves privacy but doesn’t have the overhead of cash is needed. How about this? 1. Only require certain businesses to accept cash. Make sure this includes some classes of business that most people have fairly reasonable access to. Grocery stores and convenience stores, for example. 2. Require those business to sell prepaid debit cards for cash. The debit cards must have no extra fees for purchase. A $20 debit card for example would cost $20 cash. No ID is required to buy these cards. 3. The debit cards would be subject to the normal processing fees upon use. 4. Other business can choose to not accept cash, but they must access the prepaid debit cards, and cannot charge any fees for them that they do not charge for other non-cash payment methods.

specialist 6y ago

"How can you stop data thieves, data brokers, and police from snooping on your purchase history? Pay in cash." What's Apple Pay's privacy and security story? I know that I should know this. Apologies. I had understood that Apple Pay does some kind of token exchange, instead of sending PII and account details over the wire. So this stops all the "edge" attacks, like card skimmers. Are there any solutions (currently) that keeps Home Depot, for instance, from leaking or reselling my PII when I pay digitally?

sirn 6y ago
Network Tokenization (Apple Pay/Google Pay) exchange a token unique to {card, device, merchant}. This token is sent from device, to merchant, to acquirer, to card network, and to issuer without the need to resolve token to PAN in the middle (unlike PCI tokenization most payment gateway provides). AFAIK, three parties that are aware of a purchase history of tokenized cards are: Token Service Provider who provides the token, Token Requester who offer the tokenized service (Apple/Google in this case) and a card issuer. Apple Pay for example, uses First Data as its Token Service Provider. (I'm pretty sure Google Pay does as well)

shireboy 6y ago

I get the argument (and counter arguments), but regardless of where one stands, can we all appreciate the irony of the Electronic Frontier Foundation making an appeal for paper fiat?

mindslight 6y ago
Yes, the irony. But it's coming from the same place as technical people being horrified by the wanton adoption of Internet of Trash devices, and preferring simple appliances. We know there's a proper way (privacy preserving digital payments), and until it's there, we'll reject ersatz alternatives.

supernova87a 6y ago

The EFF says that being underbanked is the problem for people at the heart of this matter. So why doesn't it work on making more banks and credit cards available to those people? Harder, and more root cause, than just advocating for cash to be accepted, I guess?

jmnicolas 6y ago
You can dream of a utopia or you can change the world one step at a time.
- supernova87a 6y ago
  By promulgating laws that don't solve the real problem but put responsibilities and costs on others to not-quite fix it?
  - colejohnson66 6y ago
    A big problem with card only businesses is that they prevent people who don’t have a bank account from buying. Sure, one could buy a reloadable or prepaid debit gift card, but those cost extra money just to activate. By keeping out people with no accounts, you’re excluding a large part of the population: children and poor people.
steanne 6y ago
http://www.campaignforpostalbanking.org/news/why-we-need-a-bank-at-the-post-office/ http://www.campaignforpostalbanking.org/news/why-we-need-a-b...

savant_penguin 6y ago

> This cohort disproportionately includes people of color and people with lower incomes. You know what disproportionately affects people of lower incomes? Other people imposing extra costs for doing businesses with them. I bet that the business refusing cash know a lot of a heck more about the added expenses of dealing with cash in their own business than me. This type of action could easily backfire making products more expensive for people who need it the most.

twoodfin 6y ago

Having now read the bill[1], I’m interested in the legal theory that would make it Constitutional. It’s not limited to interstate transactions (would defeat the point) or retail establishments engaged in interstate banking through their payment processors. What authority does Congress have to regulate whether a retailer in Wisconsin has to accept cash rather than only checks from local banks? [1] https://www.congress.gov/bill/116th-congress/house-bill/2650/text https://www.congress.gov/bill/116th-congress/house-bill/2650...

tastyfreeze 6y ago
Congress hasn't bothered with Constitutionality in a very long time. Positivism currently rules the floor.
mindslight 6y ago
IMO this seems like more of a clarification of existing law than actually new law. The only ambiguity has been "legal tender for all debts", where the businesses' argument is that they can revoke an offer based on how someone intends to pay. As things currently stand, one would be in the right to go into a "cashless" store, consume an item that was for sale, say you forgot your credit card, and offer to settle up in cash.
- tzs 6y ago
  > As things currently stand, one would be in the right to go into a "cashless" store, consume an item that was for sale, say you forgot your credit card, and offer to settle up in cash. First you would have to successfully argue that there is a debt. The store might argue that you stole the item you consumed. It all depends on how you fit what happens in a store to the offer/acceptable view of contracts. Is it: 1. by putting the item on the shelf with a price tag, the store is making an offer to sell it at that price, and 2. by picking it up you have accepted the offer, forming a contract and now you owe the store for the item? Or is it: 1. when you bring the item to the cashier you are making an offer to buy the item at the marked price, and 2. when the cashier rings you up the store accepts your offer? Even if putting an item on a shelf with a price tag is an offer, rather than an invitation to treat, I believe I've seen at least one case that said that picking up the item isn't enough to accept--the offer is accepted and the contract formed when you actually pay. So even then consuming the item before paying would be theft.

mchusma 6y ago

Forcing people to accept dead trees is a silly solution to this problem. There are real issues in the credit card system, including: 1) huge cost of credit card transactions (they are about 2) lack of privacy options 3) disproportionate burden of credit card fees on the poor (the rich get great rewards, which is a kickback from credit card companies). The number one thing that could be done to make things better is to force credit card fees to be borne visibly and directly by customers at all times. This would force people to generally seek lower cost options. The number two thing would be to ensure there is a standard for any competing card network to come along and plug in. With these two things, you would ensure low cost processing options and the ability to compete on privacy features.

ryanmarsh 6y ago
Forcing people to accept dead trees According to the Bureau of Engraving and Printing , US “paper” currency is made up of 75% cotton and 25% linen.
Slartie 6y ago
Limit credit card fees by law to some amount that easily covers the actual transaction costs and then some, but does not leave endless room for crazy stuff like kickbacks that effectively eat up 80% of the fees and thus clearly expose that the real cost of transactions can't be more than 10-20% of the fees. There you go - Problem solved! No more "tax on the poor", but cheaper prices for everyone. There's even been a model for that for over five years in the European regulation regarding this topic.
cmxch 6y ago
There's also 4) too much ability to stifle competition from lawful but controversial individuals. On top of your plug in standard, promote reasonable and nondiscriminatory access as a requirement for payment processors. That way, controversial (but otherwise lawful) individuals would also be able to compete without interference.

lurchpop 6y ago

I don’t like the “unbanked” basis for these anti cashless arguments because they’ll just solve that problem.