Cashlessness

count-back-change cashier

Say goodbye to cash.  You might want to frame a few crisp new one dollar bills.  They are about to become history.

Have you noticed how few occasions we have left to use cash? The decline started years ago when credit cards were introduced.  However, as banks were earning windfall profits as we all went into massive debt, we     learned to temper our enthusiasm for the new ‘currency.’  Banks then introduced debit cards to earn fees in another way.  Cash was really beginning to take a backseat.  In 2011, with changing regulations and fees to merchants limited, the banks wavered for a moment, while they tried to decide if debit cards were still good business. Banks are getting people to use debit and credit cards in greater and greater numbers, earning more and more fees.

Mastercard and Visa once charged merchants a flat $0.15 fee plus a percentage of the billed amount. When the item was very small, $1 to $5, the $0.15 plus 2 1/2% or more fees became a hefty portion of the overall transaction.  This caused merchants to discourage card use for small items.  Merchants posted signs “Minimum $10 purchase to use credit cards”.  Those signs are all but a thing of the past when regulations made the fees for all purchases big and small the same. The days of cash for small items were numbered.

People don’t carry much cash anymore.  Now, there are just a few cash holdouts left.  Using cash for tips became more difficult as the check amounts got larger and people paid the bill with a card.  It was just easier to add the tip to the amount.  EZPASS made cash for tolls a thing of the past.    There’s a small “cash only” Italian restaurant in Brooklyn that we frequent and cash only sidewalk food carts.  You can still buy a “BEER HERE!” at the ballpark with cash.  The babysitter still requests cash.   Taxis have had to accept cards when the bills got too damn big.  I’m still in the habit of going to the atm and withdrawing cash the day before long trips.  I’m used to cash-intensive taxi/hotel/airport travel days.  But even those days have become cashless.  It seems like the only thing my wallet is good for now is to hold my bank cards and thousands of receipts.

Take a selfie with a dollar bill. They are soon to go the way of the subway token.

171002 Here’s the Problem

Let’s say you own a website that sells bicycles.  Someone seeing your page decides that’s the perfect bicycle for me and decides to order one.  At your website, a variety of methods for customers to pay for their orders is provided.  All of the usual methods such as credit/debit card, PayPal or check are there.  If the customer chooses to pay by check, instructions include the proviso that the order does not ship until the check has cleared. The reason for that is obvious.  How will you know the check is any good unless you try to cash it.

The card companies have vetted the customers well enough that they are willing to risk the few bad apples that will thwart careful scrutiny.  If a card is stolen, it has not yet been reported.  Or, if the customer doesn’t have enough credit and they are unable to stop the transaction, the banks have enough information to successfully pursue payment. In that case, they do not have to assign a waiting period.  But, with all of these procedures and devices for ensuring payment, there is still a huge fraud rate in the credit/debit card industry.  The recent proliferation of cards with chips has improved the situation somewhat.  There is also the enormous expense to the merchant by the banks for this money handling.  Rates vary from 2.35% to 6%.  There are also fees to the customers, though those might be hidden.  After all, the merchant fees paid to banks must come from somewhere.

Bitcoin does away with all of that. If your site accepted Bitcoin, the customer would read you address into his Bitcoin Wallet and send you Bitcoin.  The Bitcoin would arrive instantly.  The transaction would be complete. It’s that simple.  Done.  Over. Finished.  No fees. No waiting period. No risk of non-payment. No lack of credit. No bounced checks. That’s the beauty of Bitcoin.