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Those of you complaining about cash being inconvenient. You are feeding an unnecessary middleman taking another piece of the pie and in the end you are paying

Those of you complaining about cash being inconvenient. You are feeding an unnecessary middleman taking another piece of the pie and in the end you are paying more for the same thing even if you don't see it right in front of you. What we should have is an electronic cash equivalent operated by the central bank, no tracking of transactions and zero fees as we have with cash.

paulddraper 3y ago
What's better than a middleman? An even bigger middleman! :)
- throwaway4783 3y ago
  [flagged]
- wildrhythms 3y ago
  The difference is a central bank middleman is (at least in theory) democratically owned an operated. You have a say in how it's run. Contrast to today's system where the likes of JP Morgan and Wells Fargo can defraud people in broad daylight with zero repercussion.
  - paulddraper 3y ago
    > defraud people in broad daylight with zero repercussion Hmmmmm
CalChris 3y ago
I keep my money at a bank. If I want to spend cash, I have to go to the bank, the ATM, and get it. The bank is indeed an unavoidable middle man. The card just simplifies the transaction.
- joshjob42 3y ago
  One could imagine though having universal accounts with the central bank, and no middleman for most transactions. Cashless but banks for checking and basic savings really aren't necessary.
- rad_gruchalski 3y ago
  In many places it's also possible to receive a cash back from the counter. Works in Germany, works in the UK.
  - CalChris 3y ago
    Works here as well, at the grocery store and this is safer.
toomuchtodo 3y ago
https://www.frbservices.org/financial-services/fednow https://www.frbservices.org/financial-services/fednow https://news.ycombinator.com/item?id=36801491 https://news.ycombinator.com/item?id=36801491 https://www.axios.com/2023/07/22/fednow-instant-payments-credit-cards https://www.axios.com/2023/07/22/fednow-instant-payments-cre... > FedNow launch hints at payments wars to come > Pix, the Brazilian instant-payments system, was nonexistent pre-pandemic. Today, per Matera, a Brazilian payments software company, Pix sees 8.1 billion transactions per quarter. That's more than the next two highest payments methods — credit cards and debit cards — combined. Credit card transactions have fallen by 20% in one year. “Pix shows how intuitive payments can be," says Matera CEO Carlos Netto. "It poses the greatest threat yet to credit card dominance." > Americans will be slow to give up their credit cards. But if merchants get aggressive in pushing us toward something more instantaneous, they could end up saving tens of billions of dollars in interchange fees. https://www.insiderintelligence.com/content/fednow-could-score-top-retailers-points-of-sale https://www.insiderintelligence.com/content/fednow-could-sco... > Walmart and Kroger are reportedly interested in using FedNow to give customers an alternative to card payments, according to Payments Dive, which cited comments from the retailers’ representatives during a panel at the Faster Payments Council spring meeting. Soon.
- aurareturn 3y ago
  The only way there's going to be any competition is if stores lower the price of goods by the equivalent amount that they save from credit card transaction fees. Otherwise, consumers will continue to prefer using credit cards due to cash back, safety, and convenience.
  - toomuchtodo 3y ago
    Merchants will surcharge the credit cards to drive consumers to cheaper instant rails. Many already do surcharge, and the number continues to increase. If you want to pay 3-4% extra to use credit card rails as a consumer, that is a choice. T-Mobile requires autopay customers to move to ACH from credit cards to continue to receive their autopay discount. AT&T and Verizon charge surcharges to pay with credit card. This is only the beginning, merchants will get more comfortable as peers make these attempts and are successful. I expect Walmart’s progress here to be a bellwether. Their consumers are price sensitive and they have the power to drive consumer behavior. Their success (or lack thereof) will drive the actions of smaller volume merchants. Walmart spends ~$3B on credit and debit interchange fees annually; they are highly incentivized to get off of expensive payment rails and specifically commented on this during the public FedNow comment period. Anecdotally, my landscapers will only take Zelle or a check. I don’t blame them. https://www.nerdwallet.com/article/small-business/credit-card-surcharges https://www.nerdwallet.com/article/small-business/credit-car... https://www.cnbc.com/2023/07/30/credit-card-fee-fight-pits-payment-companies-against-retailers.html https://www.cnbc.com/2023/07/30/credit-card-fee-fight-pits-p... https://news.ycombinator.com/item?id=36012866 https://news.ycombinator.com/item?id=36012866 https://www.federalreserve.gov/SECRS/2019/December/20191227/OP-1670/OP-1670_110719_137048_409015547480_1.pdf https://www.federalreserve.gov/SECRS/2019/December/20191227/... https://www.ft.com/content/c50a840b-394d-45e3-894d-301d9e1fae42 https://www.ft.com/content/c50a840b-394d-45e3-894d-301d9e1fa... | https://archive.today/m3qnH https://archive.today/m3qnH > Payment consultancy TSG reckons between 5-10 per cent of 8mn card-accepting small businesses in the US now charge fees for credit card usage. That is up from 2 per cent five years ago. Underscoring the growing trend, TSG said about 15 per cent of new merchants who accept card payments have a surcharge policy. > Business owners may feel they have no choice. Credit card fees, which average 2-4 per cent of the transaction amount, are most merchants’ highest operating cost after labour, says the National Retail Federation. Surcharges help cover the interchange fees that they would otherwise pay to card network and bank.
cactusfrog 3y ago
I hate change and wish I could have a change card.
sneak 3y ago
> What we should have is an electronic cash equivalent operated by the central bank Is it really impossible for people to envision even the small failure modes of such a system? What about the big, evil, malicious ones? Did we forget the Wikileaks banking blockade already? How about the Canadian trucker protest? How about freelance porn models? It's critically important that you retain the ability to pay and be paid when the state would really prefer that you not be able to.
nyolfen 3y ago
any excuse to bring up gnu taler again https://taler.net/en/index.html https://taler.net/en/index.html
- deleted 3y ago
  [deleted]
Gigachad 3y ago
Sure, I'd like to see a fee free system set up. But I currently would much rather pay the fee than deal with cash. Realistically cash has plenty of fees in the form of security and handling which are just baked in to the price of everything we buy. As cash becomes less common, these hidden fees start to go away.
oliwarner 3y ago
> operated by the central bank Who's paying for this? What happens if I want to spend my money abroad? Why would you assume a central bank won't be tracking us? Visa, Mastercard, Amex, et al are all extracting profit from fees and ad-intelligence, but only about half of this revenue results in net profit. Running these things isn't free. > you are paying more for the same thing even if you don't see it right in front of you By extension, I infer that you think cash is free to handle. It's not. For a high-volume business (eg supermarket, big box store), cash is an absolute nightmare. Counting at the point of sale, counterfeiting, storing, balancing and float management. That has time cost, while mistakes at any point have direct monetary costs. A 2% card fee compares pretty favourably, especially if you go cash-free. I welcome any disruptors, but we need to be realistic. Given the awful history of simple bank transfers in the US, I wouldn't be expecting the answer to come from them.
illiac786 3y ago
>unnecessary middleman Well, define unnecessary. A car is also unnecessary to go 50miles. Still nice to have I would say. My point is, carrying a wallet around is not the greatest experience ever, especially when it's super hot. >You are paying more I'm not, Im curious to understand how your card works. >Electronic cash I agree that's a great idea actually. EU is working on it since years already. Let's make MasterCard/amex/visa unnecessary please.

paulddraper 3y ago

What's better than a middleman? An even bigger middleman! :)

throwaway4783 3y ago
[flagged]
wildrhythms 3y ago
The difference is a central bank middleman is (at least in theory) democratically owned an operated. You have a say in how it's run. Contrast to today's system where the likes of JP Morgan and Wells Fargo can defraud people in broad daylight with zero repercussion.
- paulddraper 3y ago
  > defraud people in broad daylight with zero repercussion Hmmmmm

CalChris 3y ago

I keep my money at a bank. If I want to spend cash, I have to go to the bank, the ATM, and get it. The bank is indeed an unavoidable middle man. The card just simplifies the transaction.

joshjob42 3y ago
One could imagine though having universal accounts with the central bank, and no middleman for most transactions. Cashless but banks for checking and basic savings really aren't necessary.
rad_gruchalski 3y ago
In many places it's also possible to receive a cash back from the counter. Works in Germany, works in the UK.
- CalChris 3y ago
  Works here as well, at the grocery store and this is safer.

toomuchtodo 3y ago

https://www.frbservices.org/financial-services/fednow https://www.frbservices.org/financial-services/fednow https://news.ycombinator.com/item?id=36801491 https://news.ycombinator.com/item?id=36801491 https://www.axios.com/2023/07/22/fednow-instant-payments-credit-cards https://www.axios.com/2023/07/22/fednow-instant-payments-cre... > FedNow launch hints at payments wars to come > Pix, the Brazilian instant-payments system, was nonexistent pre-pandemic. Today, per Matera, a Brazilian payments software company, Pix sees 8.1 billion transactions per quarter. That's more than the next two highest payments methods — credit cards and debit cards — combined. Credit card transactions have fallen by 20% in one year. “Pix shows how intuitive payments can be," says Matera CEO Carlos Netto. "It poses the greatest threat yet to credit card dominance." > Americans will be slow to give up their credit cards. But if merchants get aggressive in pushing us toward something more instantaneous, they could end up saving tens of billions of dollars in interchange fees. https://www.insiderintelligence.com/content/fednow-could-score-top-retailers-points-of-sale https://www.insiderintelligence.com/content/fednow-could-sco... > Walmart and Kroger are reportedly interested in using FedNow to give customers an alternative to card payments, according to Payments Dive, which cited comments from the retailers’ representatives during a panel at the Faster Payments Council spring meeting. Soon.

aurareturn 3y ago
The only way there's going to be any competition is if stores lower the price of goods by the equivalent amount that they save from credit card transaction fees. Otherwise, consumers will continue to prefer using credit cards due to cash back, safety, and convenience.
- toomuchtodo 3y ago
  Merchants will surcharge the credit cards to drive consumers to cheaper instant rails. Many already do surcharge, and the number continues to increase. If you want to pay 3-4% extra to use credit card rails as a consumer, that is a choice. T-Mobile requires autopay customers to move to ACH from credit cards to continue to receive their autopay discount. AT&T and Verizon charge surcharges to pay with credit card. This is only the beginning, merchants will get more comfortable as peers make these attempts and are successful. I expect Walmart’s progress here to be a bellwether. Their consumers are price sensitive and they have the power to drive consumer behavior. Their success (or lack thereof) will drive the actions of smaller volume merchants. Walmart spends ~$3B on credit and debit interchange fees annually; they are highly incentivized to get off of expensive payment rails and specifically commented on this during the public FedNow comment period. Anecdotally, my landscapers will only take Zelle or a check. I don’t blame them. https://www.nerdwallet.com/article/small-business/credit-card-surcharges https://www.nerdwallet.com/article/small-business/credit-car... https://www.cnbc.com/2023/07/30/credit-card-fee-fight-pits-payment-companies-against-retailers.html https://www.cnbc.com/2023/07/30/credit-card-fee-fight-pits-p... https://news.ycombinator.com/item?id=36012866 https://news.ycombinator.com/item?id=36012866 https://www.federalreserve.gov/SECRS/2019/December/20191227/OP-1670/OP-1670_110719_137048_409015547480_1.pdf https://www.federalreserve.gov/SECRS/2019/December/20191227/... https://www.ft.com/content/c50a840b-394d-45e3-894d-301d9e1fae42 https://www.ft.com/content/c50a840b-394d-45e3-894d-301d9e1fa... | https://archive.today/m3qnH https://archive.today/m3qnH > Payment consultancy TSG reckons between 5-10 per cent of 8mn card-accepting small businesses in the US now charge fees for credit card usage. That is up from 2 per cent five years ago. Underscoring the growing trend, TSG said about 15 per cent of new merchants who accept card payments have a surcharge policy. > Business owners may feel they have no choice. Credit card fees, which average 2-4 per cent of the transaction amount, are most merchants’ highest operating cost after labour, says the National Retail Federation. Surcharges help cover the interchange fees that they would otherwise pay to card network and bank.

cactusfrog 3y ago

I hate change and wish I could have a change card.

sneak 3y ago

> What we should have is an electronic cash equivalent operated by the central bank Is it really impossible for people to envision even the small failure modes of such a system? What about the big, evil, malicious ones? Did we forget the Wikileaks banking blockade already? How about the Canadian trucker protest? How about freelance porn models? It's critically important that you retain the ability to pay and be paid when the state would really prefer that you not be able to.

nyolfen 3y ago

any excuse to bring up gnu taler again https://taler.net/en/index.html https://taler.net/en/index.html

deleted 3y ago
[deleted]

Gigachad 3y ago

Sure, I'd like to see a fee free system set up. But I currently would much rather pay the fee than deal with cash. Realistically cash has plenty of fees in the form of security and handling which are just baked in to the price of everything we buy. As cash becomes less common, these hidden fees start to go away.

oliwarner 3y ago

> operated by the central bank Who's paying for this? What happens if I want to spend my money abroad? Why would you assume a central bank won't be tracking us? Visa, Mastercard, Amex, et al are all extracting profit from fees and ad-intelligence, but only about half of this revenue results in net profit. Running these things isn't free. > you are paying more for the same thing even if you don't see it right in front of you By extension, I infer that you think cash is free to handle. It's not. For a high-volume business (eg supermarket, big box store), cash is an absolute nightmare. Counting at the point of sale, counterfeiting, storing, balancing and float management. That has time cost, while mistakes at any point have direct monetary costs. A 2% card fee compares pretty favourably, especially if you go cash-free. I welcome any disruptors, but we need to be realistic. Given the awful history of simple bank transfers in the US, I wouldn't be expecting the answer to come from them.

illiac786 3y ago

>unnecessary middleman Well, define unnecessary. A car is also unnecessary to go 50miles. Still nice to have I would say. My point is, carrying a wallet around is not the greatest experience ever, especially when it's super hot. >You are paying more I'm not, Im curious to understand how your card works. >Electronic cash I agree that's a great idea actually. EU is working on it since years already. Let's make MasterCard/amex/visa unnecessary please.