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I mainly use credit card and paypal for one reason: Give me 2% discount and I pay cash, or I pay in the US way, and you lose 3%. This of course works best in

by kephra 12y ago

I mainly use credit card and paypal for one reason: Give me 2% discount and I pay cash, or I pay in the US way, and you lose 3%. This of course works best in countries like Germany, where credit cards and paypal are not widely accepted.

kijin 12y ago
In South Korea, it is illegal for merchants to offer different prices based on the payment method. The law was intended to encourage credit card payments, because the paper trail makes it more difficult for merchants to under-report their tax obligations. (And the card companies lobbied hard, of course.) In practice, merchants have found workarounds, such as offering more loyalty points for cash payments. Some of these workarounds are legal, some are not, but in any case the government is changing its stance on credit card payments due to soaring consumer debt. Now they're trying to encourage debit card payments . . .
- sliverstorm 12y ago
  I love my credit cards precisely for the paper trail! Makes everything much easier- tracking my finances, doing my taxes, etc...
  - Sami_Lehtinen 12y ago
    I always pay by card. I do have some cash for emergencies but I withdraw more maybe yearly. So that means I use cash just a few times per year. I know that many people do not carry any cash at all. Our they have something like 20€.
  - levosmetalo 12y ago
    The same reason you love it is the reason I don't use credit cards. I don't like anyone having paper trail of all my purchasing history. And I don't use any loyalty cards, since that's just another way of tracking. Offering 2% payback on credit card purchases gives those companies a way to upsell you a lot of unwanted stuff because they can target you very accurately, and in the end you pay more in total. I like the fact that in Germany people don't use credit cards at all, and EC cards rarely, or only for purchases they deem are worth to be tracked, like utility bills or similar. Then, if my landlord complains that I didn't pay on time, I have my bank on my side to happily provide transaction id of the payment as an evidence.
- us0r 12y ago
  I'm pretty sure it is against the card association rules as well.
- kephra 12y ago
  Isn't is illegal, or impossible to order online, if you dont run windows in South Korea also? In Germany Skonto (discount) for paying within 7 days is common business practice. But credit cards of course don't like it, if you use ask for discount for not using CC.
  - kijin 12y ago
    > Isn't is illegal, or impossible to order online, if you dont run windows in South Korea also? So far, yes. Things are beginning to change because Chinese consumers are crowding into Korean stores, both online and offline. Even the President is concerned that the old system hurts the economy by turning away potential buyers. Guess what, one of the perks of being a semi-authoritarian culture is that if the President complains about something, everyone rushes to find an alternative ;) In any case, I wish there were more competition in the payment processing scene of my country as well. Most people haven't even heard of PayPal here, let alone newer and better alternatives. Perhaps once we get rid of the ActiveX dependence, more startups will be able to enter the market.
    - hkmurakami 12y ago
      Is something like paypal for person to person fund transfers legal in South Korea? I ask, because I was surprised when my friends in Japan told me that that was illegal in japan!
      - kijin 12y ago
        I can't seem to find an answer to your question on the Internet. This tells something about how little Koreans in general even think about PayPal. As far as purchasing is concerned, PayPal is just another foreign merchant that accepts Visa and MasterCard. A withdrawal is just another international wire transfer. But since both transactions are international, if you combine them you get two currency exchanges and so you lose a lot of money. That, along with the fact that the whole process can easily take 2-3 weeks, is probably why nobody even bothers. Besides, Korean banks already have a system that allows anyone to send money to anyone else, instantly, often for free. Nobody ever mails checks in Korea. This works perfectly well in our own walled garden. PayPal will probably never be able to compete with that, even when the other side is burdened with ActiveX crapware.
- fiatjaf 12y ago
  Please, talk more about this customer loyalty stuff. Here in Brazil it is also illegal to offer different prices (although in some cases the courts have allowed it), but the business mostly aren't finding any way of overcoming this. Myself included.
Gustomaximus 12y ago
Cash also has costs unique to its physical holding like counting, security, transport, storage and theft. As a % I guess this would vary by business but would balance some against the clip payment companies take.
- bostik 12y ago
  > [...] counting, security, transport, storage and theft. And oddly enough, the first and last item on that list are not too far apart. Banks / payment companies charge fees to count cash deposits, and they sell the currency back (coin rolls in particular) with a premium. Skimming - coming and going.
smsm42 12y ago
I'm already getting 2% back from my credit card, so getting 2% discount for cash would not be enough to bother with inconveniences of dealing with cash. It would have to be at least something like 4%. Which makes no sense vs. 3% credit card costs. So I'm afraid we're stuck with cards unless there's another way which is as convenient but cheaper.

by kephra 12y ago

kijin 12y ago

In South Korea, it is illegal for merchants to offer different prices based on the payment method. The law was intended to encourage credit card payments, because the paper trail makes it more difficult for merchants to under-report their tax obligations. (And the card companies lobbied hard, of course.) In practice, merchants have found workarounds, such as offering more loyalty points for cash payments. Some of these workarounds are legal, some are not, but in any case the government is changing its stance on credit card payments due to soaring consumer debt. Now they're trying to encourage debit card payments . . .

sliverstorm 12y ago
I love my credit cards precisely for the paper trail! Makes everything much easier- tracking my finances, doing my taxes, etc...
- Sami_Lehtinen 12y ago
  I always pay by card. I do have some cash for emergencies but I withdraw more maybe yearly. So that means I use cash just a few times per year. I know that many people do not carry any cash at all. Our they have something like 20€.
- levosmetalo 12y ago
  The same reason you love it is the reason I don't use credit cards. I don't like anyone having paper trail of all my purchasing history. And I don't use any loyalty cards, since that's just another way of tracking. Offering 2% payback on credit card purchases gives those companies a way to upsell you a lot of unwanted stuff because they can target you very accurately, and in the end you pay more in total. I like the fact that in Germany people don't use credit cards at all, and EC cards rarely, or only for purchases they deem are worth to be tracked, like utility bills or similar. Then, if my landlord complains that I didn't pay on time, I have my bank on my side to happily provide transaction id of the payment as an evidence.
us0r 12y ago
I'm pretty sure it is against the card association rules as well.
kephra 12y ago
Isn't is illegal, or impossible to order online, if you dont run windows in South Korea also? In Germany Skonto (discount) for paying within 7 days is common business practice. But credit cards of course don't like it, if you use ask for discount for not using CC.
- kijin 12y ago
  > Isn't is illegal, or impossible to order online, if you dont run windows in South Korea also? So far, yes. Things are beginning to change because Chinese consumers are crowding into Korean stores, both online and offline. Even the President is concerned that the old system hurts the economy by turning away potential buyers. Guess what, one of the perks of being a semi-authoritarian culture is that if the President complains about something, everyone rushes to find an alternative ;) In any case, I wish there were more competition in the payment processing scene of my country as well. Most people haven't even heard of PayPal here, let alone newer and better alternatives. Perhaps once we get rid of the ActiveX dependence, more startups will be able to enter the market.
  - hkmurakami 12y ago
    Is something like paypal for person to person fund transfers legal in South Korea? I ask, because I was surprised when my friends in Japan told me that that was illegal in japan!
    - kijin 12y ago
      I can't seem to find an answer to your question on the Internet. This tells something about how little Koreans in general even think about PayPal. As far as purchasing is concerned, PayPal is just another foreign merchant that accepts Visa and MasterCard. A withdrawal is just another international wire transfer. But since both transactions are international, if you combine them you get two currency exchanges and so you lose a lot of money. That, along with the fact that the whole process can easily take 2-3 weeks, is probably why nobody even bothers. Besides, Korean banks already have a system that allows anyone to send money to anyone else, instantly, often for free. Nobody ever mails checks in Korea. This works perfectly well in our own walled garden. PayPal will probably never be able to compete with that, even when the other side is burdened with ActiveX crapware.
fiatjaf 12y ago
Please, talk more about this customer loyalty stuff. Here in Brazil it is also illegal to offer different prices (although in some cases the courts have allowed it), but the business mostly aren't finding any way of overcoming this. Myself included.

Gustomaximus 12y ago

Cash also has costs unique to its physical holding like counting, security, transport, storage and theft. As a % I guess this would vary by business but would balance some against the clip payment companies take.

bostik 12y ago
> [...] counting, security, transport, storage and theft. And oddly enough, the first and last item on that list are not too far apart. Banks / payment companies charge fees to count cash deposits, and they sell the currency back (coin rolls in particular) with a premium. Skimming - coming and going.

smsm42 12y ago

I'm already getting 2% back from my credit card, so getting 2% discount for cash would not be enough to bother with inconveniences of dealing with cash. It would have to be at least something like 4%. Which makes no sense vs. 3% credit card costs. So I'm afraid we're stuck with cards unless there's another way which is as convenient but cheaper.