In Portugal we have a system for people with no other bank accounts called the minimum services bank account. A bank must provide these people with a checking account with one debit card and free...
In Portugal we have a system for people with no other bank accounts called the minimum services bank account. A bank must provide these people with a checking account with one debit card and free deposits and withdrawals, unlimited payments, ATM use, transfers and arbitration for dispute resolution for a minimal cost. I won't get into the nitty gritty of how the cost is calculated but this year it's €5.09 for the whole year (EDIT: Sorry, originally auto-wrote per month because I'm too used to it.)
Forget minimal cost, banks should be required to offer this for free. Yes, this results in everyone else having a teeny bit higher interest rate or other bank expenses. But in turn, people who...
Forget minimal cost, banks should be required to offer this for free. Yes, this results in everyone else having a teeny bit higher interest rate or other bank expenses. But in turn, people who currently have access to banking in theory enjoy slightly lower prices at places that go cashless, so they should somewhat balance out. The poor are losing access to commerce so those above them can enjoy lower prices than they otherwise would have. A little redistribution back downward is in order.
The value is indexed to the same legislated processes used for providing social security and other government benefits in such a way that it should be in theory always possible for an integrated...
The value is indexed to the same legislated processes used for providing social security and other government benefits in such a way that it should be in theory always possible for an integrated citizen (not living outside the grid) to have the account, but I don't know enough to know if it costing something is a good idea or not. I feel like the government could just compensate the bank directly for this value at least.
The idea is that when a place goes fully cashless, they save significant amounts of money and risk by not having to take the cash to the bank. For example, cost of handling money (made up...
The idea is that when a place goes fully cashless, they save significant amounts of money and risk by not having to take the cash to the bank. For example, cost of handling money (made up numbers):
My experience talking to people in the US is that part of the value of cash business is under-reporting revenue for tax purposes. I don't have a moral qualm about this when the Amazon's and...
My experience talking to people in the US is that part of the value of cash business is under-reporting revenue for tax purposes. I don't have a moral qualm about this when the Amazon's and Coca-cola's of the world move their operations to tax havens and pay low single digits percentages.
But you're right about the cost and risk of handling cash. I suspect that as trust erodes in our society and as minimum wage doesn't keep up with inflation, the incentives to steal or skim become too great to avoid, so businesses turn cashless, especially corporate businesses that truest workers as fungible resources.
I was recently in a relatively high end hotel for a conference preparation meeting and noticed a number of signs indicating that the Starbucks, restaurant, valet, etc. were cashless but that "cash...
I was recently in a relatively high end hotel for a conference preparation meeting and noticed a number of signs indicating that the Starbucks, restaurant, valet, etc. were cashless but that "cash gratuities were still welcome."
I've never had such a strong "the fuck I will" response to a sign in my life. I did not act on that because it obviously isn't the tipped staff making that call, but I really dislike the shift away from cash without any plan for unbanked people.
And this was in the US? Wow. That's surprising, especially in a higher-end hotel. I've been in those conference planning meetings on-site, and the staff and management, no matter what part of the...
And this was in the US? Wow. That's surprising, especially in a higher-end hotel. I've been in those conference planning meetings on-site, and the staff and management, no matter what part of the hotel, bend over backwards for us (helps we're paying hundreds of thousands of dollars to them). Hospitality and guest accommodation are at the forefront of what they offer. And if a guest only has cash, you think they'd take it.
Just because we Americans are going cashless doesn't mean the rest of the world is. What happens to guests from overseas who may carry cash instead?
I'm not trying to prioritize foreign travelers over our own people, but in this case still seems like a strange business decision for a higher-end hotel.
It was! I do get the vibe that they were doing a refresh/remodel that would be done by our summer conference. It wasn't anything directed at us specifically - but the gift shop and the Starbucks...
It was! I do get the vibe that they were doing a refresh/remodel that would be done by our summer conference. It wasn't anything directed at us specifically - but the gift shop and the Starbucks had the signs up for sure as well as one bar/restaurant. There are higher end hotels out there but it was otherwise right up there. We did get literally wined and dined (a bottle in each of our rooms and a charcuterie tray and some chocolates and such) but it seemed this was a trend.
We say "high-end," but it's really higher-end. Not necessarily the Waldorf Astoria or a St. Regis, but more like a city's primary downtown Marriott or Hilton. Basically hotels that cater to...
We say "high-end," but it's really higher-end. Not necessarily the Waldorf Astoria or a St. Regis, but more like a city's primary downtown Marriott or Hilton. Basically hotels that cater to conferences/conventions that have a lot of their own meeting space. For these kinds of hotels, a full-on Starbucks or a cafe/coffee shop that serves Starbucks coffee is pretty typical since conference attendees come down early and often don't have time for a sit-down breakfast, rather just a grab-and-go coffee and breakfast sandwich.
It feels almost scary how much of the coffee service market that Starbucks has their fingers in. Cruise ships, for instance, always have an extra-pay coffee shop, but on some ships it's just a...
It feels almost scary how much of the coffee service market that Starbucks has their fingers in. Cruise ships, for instance, always have an extra-pay coffee shop, but on some ships it's just a Starbucks - complete with the uniforms and everything. At the same time, the coffee coming out of the giant foodservice coffeemaker that spits joe at customers for free while they wait has Starbucks branding on it.
I either responded to the wrong comment or was just tacking mine on to the end of the chain, but my recollection of my main focus with the comment was your visceral reaction to the sign.
I either responded to the wrong comment or was just tacking mine on to the end of the chain, but my recollection of my main focus with the comment was your visceral reaction to the sign.
Ah yeah, no I was well aware intellectually that it was for the staff who had no control of the business decision to not accept cash and still deserved to be tipped. It was a mix of an automatic...
Ah yeah, no I was well aware intellectually that it was for the staff who had no control of the business decision to not accept cash and still deserved to be tipped.
It was a mix of an automatic response to authority being stupid and a weird "sure you don't want to accept my money but you'll accept my money" thing.
I'm not sure it was the most logical indignation I'd experienced. Maybe a bit of that or "it's not good enough for you but you want me to tip your staff with it so they won't quit and you don't...
I'm not sure it was the most logical indignation I'd experienced. Maybe a bit of that or "it's not good enough for you but you want me to tip your staff with it so they won't quit and you don't have to pay them more"
One of the reasons shops in some areas are going cashless is because having cash on premises is a liability, increasing chances of armed robberies. While I think shops should accept cash, I don’t...
One of the reasons shops in some areas are going cashless is because having cash on premises is a liability, increasing chances of armed robberies. While I think shops should accept cash, I don’t think they should be forced to so long as that issue remains unaddressed.
I feel that using "armed robbery liability" is such a poor excuse. Sure it ranks on the con side but realistically low. If there's any kind of negative liability it's internal theft of which I've...
I feel that using "armed robbery liability" is such a poor excuse. Sure it ranks on the con side but realistically low. If there's any kind of negative liability it's internal theft of which I've seen first hand several times in my lifetime (a manager was fired at one of my jobs), and I have yet to experience armed robbery to any degree of separation closer than hearing it on local news.
Robberies and muggings started trending down in the 90s, as cash started falling out of favor. It makes sense that they're related, as lower probability of a return proportional to the risk...
Robberies and muggings started trending down in the 90s, as cash started falling out of favor. It makes sense that they're related, as lower probability of a return proportional to the risk disincentivizes crime.
Cash also causes a lot of friction in transactions, and takes up significant payroll to deal with. Drops, pulls to deal with lack of change, end of day counting, all add up to a lot of wasted time. Then money needs to be safely transported to a bank, which requires contracting an armored courier if you don't want to be a serious robbery risk.
It's definitely a factor in my choice to not use or carry cash. Credit is physically safer, far more convenient, not dirty, and financially smarter. I will not do business with establishments that only take cash, and will actively dissuade others from as well. Lack of access to banking is the problem to be solved, not returning to something even worse.
This is where the rub is, right? I won't do business with an establishment that only takes card (when I have the option) because I don't particularly want every cent of my spending to be able to...
I will not do business with establishments that only take cash, and will actively dissuade others from as well.
This is where the rub is, right? I won't do business with an establishment that only takes card (when I have the option) because I don't particularly want every cent of my spending to be able to be data mined.
Of course, a business can and should obviously take both forms of payment.
This is one of those things that I think is especially vital and over looked in the modern age. People are so used to it and think "so what", but at the same time we have a lot of potentially...
I don't particularly want every cent of my spending to be able to be data mined.
This is one of those things that I think is especially vital and over looked in the modern age.
People are so used to it and think "so what", but at the same time we have a lot of potentially scary people grabbing for power, and I worry we're going to be reminded why privacy is supposed to be a right in a very awful way.
Promises of anonymity and privacy have been broken over and over ever since we realized how powerful big data is for commerce/advertising/influencing This is my favorite break of trust......
Promises of anonymity and privacy have been broken over and over ever since we realized how powerful big data is for commerce/advertising/influencing
Didn't pretty much all violent crime decrease during that time frame? I'd need to see a causal link not just a correlative one. Otherwise we're back to ice cream sales causing polio. I use mostly...
Didn't pretty much all violent crime decrease during that time frame? I'd need to see a causal link not just a correlative one. Otherwise we're back to ice cream sales causing polio.
I use mostly card but I don't really want to not be able to turn my cash into food or necessities. And in the grander scheme of things, ceding all this to large banks and payment processors doesn't sound ideal.
I think you're going to harm a lot more people than you help with this math. You're basically telling people already in bad positions that their money is literally no good unless they jump through...
I think you're going to harm a lot more people than you help with this math. You're basically telling people already in bad positions that their money is literally no good unless they jump through more hoops, that often cost more money.
It doesn't have the emotional impact of an armed robbery (especially when they turn lethal), but you're going to affect millions more people in ways they can't combat at all.
Is the issue of people committing armed robbery actually “unaddressed”? If you mean “addressed to the point where armed robbery is guaranteed to never occur anymore” then I don’t really think...
Is the issue of people committing armed robbery actually “unaddressed”? If you mean “addressed to the point where armed robbery is guaranteed to never occur anymore” then I don’t really think that’s in the realm of possibility, and if you mean “until politicians do literally anything about armed robbers sticking up stores with impunity” then I think that they probably have done something in most places.
I also want to point out that the stores most at risk of experiencing armed robbery are the ones in poorer areas that disproportionately serve unbanked customers, and as such are not even economically able to refuse cash. Ergo, pretty much none of the stores that are refusing cash are doing it out of a serious concern for preventing armed robbery.
Also, one crucial item is that while armed robbery has decreased, identity theft has increased. The more widely credit cards and other electronic payment forms are used, the greater the risk of...
Also, one crucial item is that while armed robbery has decreased, identity theft has increased. The more widely credit cards and other electronic payment forms are used, the greater the risk of digital fraud and identity theft. In many ways the risks have been offloaded onto the customer. Mugging someone for a few hundred bucks is only worth it to the most desperate criminals. But digitally robbing an individual? That's something that can be worth thousands. The store drops the risk of armed robbery, but I have to take on the risk of the card skimmer.
This risk is mitigated with mobile wallets like Google/Apple Pay, however. Even if those are skimmed, the info is only good for that one transaction which greatly limits potential damage. Support...
This risk is mitigated with mobile wallets like Google/Apple Pay, however. Even if those are skimmed, the info is only good for that one transaction which greatly limits potential damage.
Support for those isn’t everywhere yet, though. Coverage is good in cities and decent in rural areas (I was surprised at how many places accepted mobile payments in my one-stoplight hometown) but you’ll still run across the occasional terminal that requires a traditional card.
It's either Home Depo or Lowes, can't remember which, but they explicitly won't allow Apple/Google Pay. You have to use their app or use a seperate card. I explicitly don't want to be forced to...
It's either Home Depo or Lowes, can't remember which, but they explicitly won't allow Apple/Google Pay. You have to use their app or use a seperate card.
I explicitly don't want to be forced to "opt in" to further user tracking just because I don't want to use cash for large transactions.
Yeah, it’s irritating when that happens. Walmart is another store that’s holding out against the big digital wallets, insisting that you use a traditional card or their app. Whatever data they’re...
Yeah, it’s irritating when that happens. Walmart is another store that’s holding out against the big digital wallets, insisting that you use a traditional card or their app.
Whatever data they’re not getting from Apple/Google Pay users must be substantial if it’s inspiring this behavior.
I would imagine it’s less of a data thing and more of a lower credit card transaction fee thing. Apple Pay and android pay introduce more middlemen and the middlemen get paid.
I would imagine it’s less of a data thing and more of a lower credit card transaction fee thing. Apple Pay and android pay introduce more middlemen and the middlemen get paid.
Maybe, but that seems unlikely as Apple Pay doesn’t cost anything for users or merchants, with its fees instead coming out of the pockets of banks, suggesting that the only thing Walmart loses...
Maybe, but that seems unlikely as Apple Pay doesn’t cost anything for users or merchants, with its fees instead coming out of the pockets of banks, suggesting that the only thing Walmart loses from accepting it is data.
Apple may not charge anything to use it, but that doesn't mean that it's not more expensive. Credit card processors who do not offer a flat transaction fee will often charge different amounts for...
Apple may not charge anything to use it, but that doesn't mean that it's not more expensive. Credit card processors who do not offer a flat transaction fee will often charge different amounts for different types of transactions, and NFC transitions tend to be higher.
Big retailers squeeze the credit card processors for really low rates, which is part of why you'll find things like credit card rewards programs that exempt them from the higher reward tiers. Costco famously doesn't take all credit cards - they only accept Visa except at their health-related departments where they also accept MasterCard.
I heard from a business owner that he stopped taking cash because having his delivery drivers carry cash required them to be paid more since it was considered a more dangerous job.
I heard from a business owner that he stopped taking cash because having his delivery drivers carry cash required them to be paid more since it was considered a more dangerous job.
I'd thought you were but wasn't sure! See obviously in the US it has to be Walmart instead. Looks like the recent bill went nowhere in congress which makes sense given the state of things.
I'd thought you were but wasn't sure!
See obviously in the US it has to be Walmart instead.
Looks like the recent bill went nowhere in congress which makes sense given the state of things.
The Walton Family (which owns Walmart) has owned the largest bank in Arkansas for decades. Anyone from Northwest Arkansas is familiar with Arvest bank. The bank is not run by Walmart though....
The Walton Family (which owns Walmart) has owned the largest bank in Arkansas for decades. Anyone from Northwest Arkansas is familiar with Arvest bank. The bank is not run by Walmart though.
No I was mostly being serious that we'd rather privitize those services to literally Walmart than use the post office, but I appreciate you providing references.
No I was mostly being serious that we'd rather privitize those services to literally Walmart than use the post office, but I appreciate you providing references.
This should not be a thing at all, as an example, you cannot pay using cash in public transport in the Netherlands. What does this mean? Is cash worth less than digital money? How can that be? It...
This should not be a thing at all, as an example, you cannot pay using cash in public transport in the Netherlands.
What does this mean? Is cash worth less than digital money? How can that be? It cannot be worth the same if it cannot be used.
I don't have much in cash, but I am very much against this trend of phasing it out.
Can you take cash to a post office or something to buy a ticket? This has been a thing in most places for a long time because having a bus driver count coins slows the system down a lot.
Can you take cash to a post office or something to buy a ticket? This has been a thing in most places for a long time because having a bus driver count coins slows the system down a lot.
You can get an anonymous stored value card, and then put money on it by inserting coins into a machine, or paying with paper money at a service desk (which incurs a € 0,50 fee). But both of those...
You can get an anonymous stored value card, and then put money on it by inserting coins into a machine, or paying with paper money at a service desk (which incurs a € 0,50 fee). But both of those aren't available at all stations, so it's very inconvenient.
I think the most common way to use it now is to associate it with a bank account, either in prepaid (automatic top-up) or postpaid (monthly invoice) mode. There's also machines at supermarkets that let you transfer money from a debit card to the stored value card. As of late, you can also use a debit or credit card in place of the stored value card. But all of those methods require a bank account.
As a Canadian, this is hard for me to wrap my head around. How are these people getting paid for work, cash or cheque? How are they paying rent? The same way I guess? For those who can't maintain...
As a Canadian, this is hard for me to wrap my head around. How are these people getting paid for work, cash or cheque? How are they paying rent? The same way I guess? For those who can't maintain minimum balances, I get that, but we have no fee/no minimum balance banks in Canada. At 10 times the size I have to believe there is an American bank that can offer the same?
Apparently 6% of Canadians are unbanked but that number includes people who are online only or have an account but can't get credit so it definitely seems like a much smaller problem in Canada, which is surprising to me but I guess also why I am surprised about it being such an issue in the US.
There is a parallel system to the credit rating system most are familiar with. Everyone is familiar with FICO, your credit score when getting a mortgage, etc. But the banks also maintain a common...
Exemplary
The same way I guess? For those who can't maintain minimum balances, I get that, but we have no fee/no minimum balance banks in Canada. At 10 times the size I have to believe there is an American bank that can offer the same?
There is a parallel system to the credit rating system most are familiar with. Everyone is familiar with FICO, your credit score when getting a mortgage, etc. But the banks also maintain a common rating system for bank customers. Write a bad check? That's a mark on your bank record. Overdraft too many times? That's a mark on your record. Been the victim of fraud an abnormally large number of many times? Quite possibly on there as well. It's similar to the credit rating system, except ranking your value as a depositor rather than a creditor.
Too low a rating, and your bank will simply drop you. You can try to go to another bank, and they might just deny you too. Each bank has their own standards for assessing customer risk, but they share common customer profile databases. So your record may be good enough for one bank but too bad for another. But with sufficiently bad banking history, you may be unable to find an account anywhere.
Now, you might ask, "why doesn't the bank just offer a zero-risk account?" You could have an account that simply doesn't allow you to overdraft. And maybe it doesn't allow wire transfers and other common methods of fraud. You put money in, you take it out, and your money has long clearing periods before its available. Why don't banks offer this type of account to unbankable people?
They don't because there's no money in it. Those who have bad banking records rarely do so because they simply are irresponsible and bad with money. They have bad banking records because they're poor and on the edge of survival. They write checks they don't have money for, hoping it won't clear before payday. They do this because it's the only way they can make rent. They overdraft, even knowing the high fee, because they need to make a vital purchase. They're more likely to be victims of fraud because they're desperate, and desperate people are easy to take advantage of.
Does that sound like a profitable bank customer to you? Will the bank will be making much interest off their deposits? Will they have much success offering them financial services like investment advise and money management? People with bank records this bad are poor enough that they simply are not profitable customers for banks. Even if banks could structure an account that these high-risk customers couldn't possibly overdraft from, it wouldn't be worth the hassle.
How are these people getting paid for work, cash or cheque? How are they paying rent? The same way I guess?
People without banks will often either have to find an employer who will pay in cash (such as irregular day labor), or they have to use expensive check-cashing places. They get their pay check and then pay a percentage of it to have it cashed. Then, once they have that cash, they then often have to pay further fees to use it. If their landlord won't accept cash, they can purchase a money order or cashier's check with cash, for a decent fee of course. Or if you can only pay electronically, you can purchase a visa gift card or equivalent, one of those refillable debit cards that carry high fees and aren't properly FDIC-insured accounts.
In short, they do it by paying high fees. All the interactions you would normally make through a bank are done through separate for-profit entities that want their cut. You have to store your money in cash, but every time you go from digital to cash or cash to digital, you have to pay the toll.
That is sad and depressing but a good answer to my questions. Appreciate your taking the time to explain. I imagine something similar happens here too.
That is sad and depressing but a good answer to my questions. Appreciate your taking the time to explain. I imagine something similar happens here too.
And they didn't even dive into the scary world predatory payday loans. Typically up to like $500, due in a week, with a fee on the order of 10-30%. If you can't pay that week, you can pay extra to...
And they didn't even dive into the scary world predatory payday loans.
Typically up to like $500, due in a week, with a fee on the order of 10-30%. If you can't pay that week, you can pay extra to extend the deadline.
And poor people go for it because that's the only way they'll make rent on time.
A fair bit of America's wealth is built on the back of charging poor people more than rich people for the same things.
A not-poor person pays $20 for a 30 pack of toilet paper, because it's cheaper per roll. A poor person pays $5 for a 4-pack, because they only have $50 left for groceries that week, and goddamn food stamps don't buy diapers.
(That was a reference to Eminem's Lose Yourself...this has been a problem for a long time).
And that is incidentally why they also target poor people with shitty credit cards. They can rack up tons of fees and interest, subsidizing the use of the 'responsible' upper classes. Sure,...
And that is incidentally why they also target poor people with shitty credit cards. They can rack up tons of fees and interest, subsidizing the use of the 'responsible' upper classes.
Sure, they'll lose a bit when people default on their loans, but that's what the derivative loan market is for. At 21% APY, if they can collect for a year from 100 people paying minimum payment, they can easily afford to eat the loss of 1/5 of their customers defaulting, because they'll probably hop on that treadmill as soon as they are able again.
This of course is a giant roulette wheel of risk. If too many people default on their loans at once, then the banks need a bailout because we let them spread their assets too thin.
Back when I lived in the US (only about 5 years ago) I paid my rent by check because they charged me extra to pay it any other way. It was literally the only thing I needed checks for.
Back when I lived in the US (only about 5 years ago) I paid my rent by check because they charged me extra to pay it any other way. It was literally the only thing I needed checks for.
yeah landlords definitely don’t want to accept cash (with relatively good reasoning) - shops talk about increased breakin risk for accepting cash but a landlord is going to be accepting tens of...
yeah landlords definitely don’t want to accept cash (with relatively good reasoning) - shops talk about increased breakin risk for accepting cash but a landlord is going to be accepting tens of thousands of dollars in cash, all concentrated around the same day of the month. If everyone in my apartment building paid in cash (which isn’t allowed), the office would have at least 100k in cash (probably more) on the first of the month.
Yeah when I rented I primarily paid with a cheque although I did have one where I walked over to his house and handed them cash. If you don't have a bank and your landlord doesn't accept cash then...
Yeah when I rented I primarily paid with a cheque although I did have one where I walked over to his house and handed them cash. If you don't have a bank and your landlord doesn't accept cash then I guess you just live somewhere that does?
yeah it's a situation where I think it's completely understandable to not want to accept cash, but we just don't have public infrastructure that supports that. Postal banking along with robust...
yeah it's a situation where I think it's completely understandable to not want to accept cash, but we just don't have public infrastructure that supports that. Postal banking along with robust public transit would make this more acceptable imo.
But if you don't have a bank account can you still get one? I honestly don't know. Can you walk into any bank with cash and ask for a certified cheque?
But if you don't have a bank account can you still get one? I honestly don't know. Can you walk into any bank with cash and ask for a certified cheque?
Money orders are what are used instead, and basically every grocery store and many convenience stores sell them for a $1-$3 fee. I use them myself since I get 1% cashback on transactions with my...
Money orders are what are used instead, and basically every grocery store and many convenience stores sell them for a $1-$3 fee.
I use them myself since I get 1% cashback on transactions with my debit card, and money orders at the grocery store are just processed like any other transaction there-- nets me more than the $1 fee costs me. The grocery store especially will typically offer check cashing as well (naturally for a fee), so it's rather common to see people on the first of the month at the customer service desk cashing their paychecks and getting a money order for their rent at the same time in poorer neighborhoods.
I just remembered, this landlord also accepted Money Orders, which you can get from the USPS...back in the day when $1,000 would pay for a 2 BR apartment no problem.
I just remembered, this landlord also accepted Money Orders, which you can get from the USPS...back in the day when $1,000 would pay for a 2 BR apartment no problem.
According to the article, 6 million Americans are unbanked, which is a little less than 2% of the American population - suggesting it's a bigger problem in Canada. I find this happens a lot with...
Apparently 6% of Canadians are unbanked but that number includes people who are online only or have an account but can't get credit so it definitely seems like a much smaller problem in Canada,
According to the article, 6 million Americans are unbanked, which is a little less than 2% of the American population - suggesting it's a bigger problem in Canada.
I find this happens a lot with articles on america. The population is extremely large, so while "millions" sounds like a lot of people, it could actually be less than 1% or Americans.
This was in the article: That doesn't make sense to me since there are PLENTY of banks and credit unions, both online-only and brick & mortar, in the US that offer free, no minimum...
This was in the article:
In 2021, the top reason — with over 40% of respondents choosing it — was that they didn’t have enough money to meet the minimum balance.
That doesn't make sense to me since there are PLENTY of banks and credit unions, both online-only and brick & mortar, in the US that offer free, no minimum checking/savings accounts. Of course when I say free, that doesn't mean no fees; just no fees for having $0 in the account. Literally all the banks I'm a customer of (I'm not rich; I just try to "hide" money from myself in different places) have free, no-min checking/savings, which are what I use. I don't have a single account that requires a minimum balance. I've even some free accounts that don't even require an initial deposit (I typically see $25-50 initial, but it can be withdrawn immediately).
The rest of stated reasons -- more privacy with cash, high fees, seemingly unpredictable fees, and even just general distrust of banks -- those all make sense to me. But I'm skeptical concerning lack of free, no-min checking and savings.
That said, I wonder if geography is playing a part here. I'd be curious to know where some of the unbanked live. I live in a city/metro area. I have lots of different options for banks, local, regional, and national/international. But I can see living in a smaller town in the boonies and only having one smaller bank be an issue. Especially if the one bank only offers minimum-balance accounts.
But not even just the boonies. How about poorer inner-city neighborhoods? Are there less banks in those areas? How far would/does a resident have to go to get access to a free checking account? Quick, convenient access to money is obviously important.
I addressed this here some: https://tildes.net/~finance/1dpj/no_cash_accepted_signs_are_bad_news_for_millions_of_unbanked_americans#comment-btfh People who consistently live check to check are...
People who consistently live check to check are more likely to end up with overdraft fees they can't pay or try to float til pay day, once you're flagged by the system you don't qualify for a regular bank account. Some of those second chance accounts have higher minimums, most of them have high fees
Tbh I think many regular bank accounts have fees waived by direct deposits and hidden minimum balances.
Yeah that was mainly the part I was trying to understand. I guess like anything our systems punish people in poverty and it surprises me because I am fortunate enough to not have found myself in...
Yeah that was mainly the part I was trying to understand. I guess like anything our systems punish people in poverty and it surprises me because I am fortunate enough to not have found myself in that situation. I can only assume it's some combination of limited options and maybe credit score has something to do with it? I know a credit score is a lot more important in the US than Canada.
I'm in SoCal. One of our amusement parks, Knotts Berry Farm, is cashless. They have machines all over the park where you can load your cash onto a card for the day. Seems a little scammy, like the...
I'm in SoCal. One of our amusement parks, Knotts Berry Farm, is cashless. They have machines all over the park where you can load your cash onto a card for the day. Seems a little scammy, like the Starbucks gift card situation. It's an easy way to keep those little bits of leftover money people don't spend.
Ooh, that’s a whole different version of cashless and it sounds gross! Am I able to pay with my own credit card or do I also need to transfer from my credit card into one of these venue cards? Am...
Ooh, that’s a whole different version of cashless and it sounds gross!
Am I able to pay with my own credit card or do I also need to transfer from my credit card into one of these venue cards? Am I able to take out the remainder from the venue card back into cash or my credit card at the end of the day?
I can easily see a scenario where I might go there, top up the card at the start of the day, and then have to leave much earlier than expected because of an emergency or something and if they took and locked up my money in that situation, I’d feel so burned by that!
You can pay with your own card. They also take Apple and Google Pay. It doesn't look like you can get your money off the card, but it is accepted outside the park anywhere Visa or MasterCard is...
You can pay with your own card. They also take Apple and Google Pay.
It doesn't look like you can get your money off the card, but it is accepted outside the park anywhere Visa or MasterCard is accepted. Still feels shady.
I've heard some Formula 1 races in Europe doing this. At some races, I think you can get unused credit converted back and refunded to you, while at others, unused credit is forfeited. Which is BS,...
I've heard some Formula 1 races in Europe doing this. At some races, I think you can get unused credit converted back and refunded to you, while at others, unused credit is forfeited. Which is BS, if you ask me.
I know this isn't necessarily new. Arcades (at least in the US) have been using tokens for a long time, instead accepting coin currency. But you can always use those tokens at a later time. You don't lose them just because you leave. I have tons of tokens from a local arcade that I go to like once a year. And those tokens I have are from like the first time I went there years ago! At least it's usable over time. For the F1 races where you can't get money back, those credits aren't necessarily guaranteed to be usable in following years (certainly not at other races).
I've also been to some sporting events in the US where it's all cashless. No "credit" system (yet), but they only accept credit/debit cards.
I’ve heard a lot of complaining from businesses about the cost of handling cash. At this risk of sounding like an asshole, I’m going to be honest. I don’t care. I absolutely could not care less....
I’ve heard a lot of complaining from businesses about the cost of handling cash. At this risk of sounding like an asshole, I’m going to be honest. I don’t care. I absolutely could not care less. The needs and privacy of the average working class person and the average person in poverty are regularly sacrificed for business needs and goals. So maybe sometimes, I just don’t care. Maybe sometimes, our needs come first.
I’m not unbanked and I do often use a credit card. But this change only makes things harder on the poor. And just as importantly, I don’t trust the motives behind phasing out cash. If we had a digital form of currency (no, not crypto) that could preserve my privacy or a more advanced form of physical currency, then I might be interested.
I’m not anti-change. I’m not an anti-tech Luddite. But I don’t trust the motives behind most “new tech” anymore, especially when it’s so obvious how easily it can be used to invade our privacy. The government (and who knows who else) doesn’t need to how I spend every single cent. If it were up to me, cash would stay and businesses would be forced to accept any and all legal tender.
The ones in power have human tendencies, impulses and motives. This right here is the core pro for not eliminating cash... it is a check on power. We as a nation, everyone in fact, should read...
The ones in power have human tendencies, impulses and motives. This right here is the core pro for not eliminating cash... it is a check on power.
We as a nation, everyone in fact, should read Paine's Common Sense. I'm all for rule of law to help us live for the common good, but government is a necessary evil in it's best form and independence is always preferred to any dependence on the state.
It's harder for poor people to beg for money when there's no cash. Don't have the time to research it now, but I'd be curious to know if places that have cash mandates are overall less-hostile to...
It's harder for poor people to beg for money when there's no cash. Don't have the time to research it now, but I'd be curious to know if places that have cash mandates are overall less-hostile to the homeless than places that don't.
I'm mildly skeptical of this being the reason. My primary checking account has been with a major bank (Wells Fargo) since high school, and they've never had a minimum balance requirement on that...
Every two years, the Federal Deposit Insurance Corporation surveys households about their connections to the banking system and asks people without bank accounts why they don’t have one.... In 2021, the top reason — with over 40% of respondents choosing it — was that they didn’t have enough money to meet the minimum balance.
I'm mildly skeptical of this being the reason. My primary checking account has been with a major bank (Wells Fargo) since high school, and they've never had a minimum balance requirement on that account for the 17 years I have been with them. The credit union I usually use for auto loans used to have a $100 minimum balance requirement, but I just checked and they got rid of it 8 years ago.
It seems like a significant number of people are afraid that if they deposit their money into a bank account, it'll get taken to pay their unpaid debts, back taxes, child support, and other such...
It seems like a significant number of people are afraid that if they deposit their money into a bank account, it'll get taken to pay their unpaid debts, back taxes, child support, and other such things. So, maybe "not enough money" means they're afraid that balance will quickly go to zero for various reasons. I learned this from a former roommate who cashed every paycheck instead of depositing it. Unsurprisingly, he ended up owing me a lot of money for not paying his share of the bills.
I promise you that Wells Fargo absolutely does have minimums, or at least has had them within the last 17 years. One of the reasons why I took all of my money out was that they had promised me...
I promise you that Wells Fargo absolutely does have minimums, or at least has had them within the last 17 years. One of the reasons why I took all of my money out was that they had promised me that having both a checking and savings account would remove that minimum and the associated fees, and they later quietly walked that back and started charging me without notifying me. I had spent hours in line at my local branch trying to get rid of the numerous surprise fees they threw at me. This is the same bank that was guilty of rearranging the order of debits to increase the number of overdraft fees they could charge and are almost surely the reason why their overdraft fee system is no longer legal in my state, if not federally. There is no doubt in my mind that they are guilty of trying to fleece the working poor.
There could be any number of reasons why people have a different experience than my own, which is why I'm only "mildly skeptical". I just know that during the early years of my adulthood, my...
There could be any number of reasons why people have a different experience than my own, which is why I'm only "mildly skeptical". I just know that during the early years of my adulthood, my account regularly dipped into the single digits and I only ended up paying a fee one time when I overdrew the account.
I wouldn't be surprised to hear that it's harder to get this kind of treatment if you have a poor credit history, which I suspect is the problem plaguing most of the 6 million Americans discussed in the article.
Once you are flagged by Chexsystems you're generally not eligible for the typical accounts. The sort of "second chance" accounts have higher fees, minimums, etc. Wells Fargo's appears to be...
Once you are flagged by Chexsystems you're generally not eligible for the typical accounts. The sort of "second chance" accounts have higher fees, minimums, etc.
Wells Fargo's appears to be Everyday Checking which has a low minimum balance of $25 and a $10 monthly fee. That fee is exempt for owners age 17-24 and people with large direct deposits or people with more than $500 in the bank at all times.
Which means even if you had needed the 2nd chance as a teen there would have been a tiny minimum and no fees. As an adult who gets paid cash, or doesn't get direct deposit, who spends most or all of their check each month... Ten bucks a month is frankly robbery.
And that's one bank that may not have branches in the neighborhoods or small towns where the unbanked live as this is an issue of poverty.
I'm not sure what the article is suggesting we do about this. The final paragraph is here By "insist" do they mean enforce with laws? Do they mean "complain"? While the former would be great, I...
I'm not sure what the article is suggesting we do about this.
The final paragraph is here
The next time you see a sign in a shop or restaurant window stating “No cash accepted,” you’re really looking at a business excluding many unbanked and underbanked people. Insisting that all businesses accept cash is a simple way to ensure everyone is financially included in the modern economy.
By "insist" do they mean enforce with laws? Do they mean "complain"?
While the former would be great, I don't see how that would even work for a lot of services. I suppose I could mail an envelope full of cash somewhere for my cloud storage bill every year, but that has its own problems.
If they mean "complain" then I don't see why a business would be inclined to care at all. If they're not accepting cash, it's because they've already run the numbers and decided that cash customers are worth throwing away the business.
I suppose a loud boycott could be attempted by all of the "banked Americans" but there's only so much you can do to boycott when you still need to buy groceries. The grocery stores in my area are not "cashless" but all of the self-checkouts that take cash are perpetually out of order and there's a very good chance that nobody is working the normal checkouts so you can't actually pay with cash anyway. I've left a cart full of groceries at a checkout before because I only had cash and the manager just didn't care.
Businesses try things all the time that they walk back or find out to be ineffective or just bad ideas. Complaints are certainly a way to convey that. If their numbers don't account for...
If they mean "complain" then I don't see why a business would be inclined to care at all. If they're not accepting cash, it's because they've already run the numbers and decided that cash customers are worth throwing away the business.
Businesses try things all the time that they walk back or find out to be ineffective or just bad ideas. Complaints are certainly a way to convey that. If their numbers don't account for dissatisfied customers, dissatisfied staff, etc. they may have made a bad decision. Or any increase in safety or financial gain is outweighed by the bad PR.
Sure, but this isn't a business trying some new innovative way to save money doing business. It's the entire market. The entire market isn't going to walk back. Even if I did want to complain and...
Sure, but this isn't a business trying some new innovative way to save money doing business. It's the entire market. The entire market isn't going to walk back.
Even if I did want to complain and go to the company not doing this, there's literally nobody else to go to in some scenarios. I can't go to an alternative electric company, and complaints are presumably sent straight to the shredder because they are fully aware that their customers can't just go to a competitor.
Speaking with lawmakers at all levels would be the next step then. I was definitely thinking about individual businesses as that was the bit I was responding to.
Speaking with lawmakers at all levels would be the next step then. I was definitely thinking about individual businesses as that was the bit I was responding to.
It would probably be sensible to limit any legislation requiring a business to accept cash to establishments with some sort of physical storefront. I think that would be very doable legally....
While the former would be great, I don't see how that would even work for a lot of services.
It would probably be sensible to limit any legislation requiring a business to accept cash to establishments with some sort of physical storefront. I think that would be very doable legally.
Otherwise I agree that there isn't really any likelihood of non-legislative action making much impact here.
Personally, the less I have to use plastic card for purchases, the better. I feel like this is designed to make Americans poorer than they already are, because paying with cash has a HUGE benefit:...
Personally, the less I have to use plastic card for purchases, the better.
I feel like this is designed to make Americans poorer than they already are, because paying with cash has a HUGE benefit: when you're out of physical cash, you. are. out. Granted, I live in a society that still heavily uses physical cash... which I rather kind of like. I once heard that paying with physical cash carries an actual psychological 'weight" to it- you can very much 'feel' the loss of money.
Meanwhile, this is why I say credit (or even debit!) cards are huge trap- I haven't looked recently, but I know there have been studies done saying that a huge percentage of American's finances go into paying off credit card debt. Rather unfortunately, Americans have a consumerism culture (not that other countries don't, mind you), and so they become careless with their spending- "Oh, I'll just put it on my card an maybe pay it off... eventually". Then the bill comes along, and they go "WTF there's no way i spent this much!" Actually, you did... and paying by plastic makes this scenario far too easy.
The design of your currency helps that more than you would imagine. All US currency of value are paper bills that are all the same size and weight; if you are blind a $1 bill is the same as a $100...
The design of your currency helps that more than you would imagine. All US currency of value are paper bills that are all the same size and weight; if you are blind a $1 bill is the same as a $100 bill. There are coins but they are worth so little that they are basically dead weight; there is nothing at the supermarket you can buy for a quarter, the highest common denomination of US coin.
Cash in the US is basically broken and our political machine is too broken to fix it. There are so many other minor issues that don’t even get talked about.
Then again I know a bunch of people here who say the same things you do about carrying cash, so this might not be as much an issue as I am making it sound.
So honest question here. Where is the intersection between the "decentralized" crowd, specifically the cryptocurrency (and fiat currency?) fans, and the unbanked citizens of the west and other...
So honest question here. Where is the intersection between the "decentralized" crowd, specifically the cryptocurrency (and fiat currency?) fans, and the unbanked citizens of the west and other countries with semi-stable currencies? Like, is there a group of apathetic simians and their sea-going cousins that are helping to fund financial education seminars (while gently pushing the merits of blockchain and anonymous currencies as the One True AlternativeTM)? Where are they? Like, aren't the unbanked shoe-ins to be ideologically allied through a mistrust of formal banking institutions, desire for privacy from centralized institutions, and so on? Or are the disenfranchised and unbanked (and also non-tech-savvy) so undesirable to these folks that they don't even want to pitch them investment schemes?
I know that there was a lot of positivity and self-congratulating when El Salvador and Central African Republic (CAR) adopted bitcoin as a legal currency and promoted digital banking, but where does supporting financial literacy (and even propaganda), budgeting, and investing fall into this for the unbanked? Isn't that a problem that DeFi/crypto could potentially be solving?
Something like Machankura as a low-tech banking method? https://www.youtube.com/watch?v=Vi7KsgfNcxQ And Bitcoin For Fairness for education? https://bffbtc.org/
In Portugal we have a system for people with no other bank accounts called the minimum services bank account. A bank must provide these people with a checking account with one debit card and free deposits and withdrawals, unlimited payments, ATM use, transfers and arbitration for dispute resolution for a minimal cost. I won't get into the nitty gritty of how the cost is calculated but this year it's €5.09 for the whole year (EDIT: Sorry, originally auto-wrote per month because I'm too used to it.)
Forget minimal cost, banks should be required to offer this for free. Yes, this results in everyone else having a teeny bit higher interest rate or other bank expenses. But in turn, people who currently have access to banking in theory enjoy slightly lower prices at places that go cashless, so they should somewhat balance out. The poor are losing access to commerce so those above them can enjoy lower prices than they otherwise would have. A little redistribution back downward is in order.
The value is indexed to the same legislated processes used for providing social security and other government benefits in such a way that it should be in theory always possible for an integrated citizen (not living outside the grid) to have the account, but I don't know enough to know if it costing something is a good idea or not. I feel like the government could just compensate the bank directly for this value at least.
In Australia, there is typically a surcharge for paying by card, so cash is always the cheapest option.
The idea is that when a place goes fully cashless, they save significant amounts of money and risk by not having to take the cash to the bank. For example, cost of handling money (made up numbers):
So for a card + cash business, it is in their favor to incentivize cash since the cost of handling that is fixed.
My experience talking to people in the US is that part of the value of cash business is under-reporting revenue for tax purposes. I don't have a moral qualm about this when the Amazon's and Coca-cola's of the world move their operations to tax havens and pay low single digits percentages.
But you're right about the cost and risk of handling cash. I suspect that as trust erodes in our society and as minimum wage doesn't keep up with inflation, the incentives to steal or skim become too great to avoid, so businesses turn cashless, especially corporate businesses that truest workers as fungible resources.
I was recently in a relatively high end hotel for a conference preparation meeting and noticed a number of signs indicating that the Starbucks, restaurant, valet, etc. were cashless but that "cash gratuities were still welcome."
I've never had such a strong "the fuck I will" response to a sign in my life. I did not act on that because it obviously isn't the tipped staff making that call, but I really dislike the shift away from cash without any plan for unbanked people.
And this was in the US? Wow. That's surprising, especially in a higher-end hotel. I've been in those conference planning meetings on-site, and the staff and management, no matter what part of the hotel, bend over backwards for us (helps we're paying hundreds of thousands of dollars to them). Hospitality and guest accommodation are at the forefront of what they offer. And if a guest only has cash, you think they'd take it.
Just because we Americans are going cashless doesn't mean the rest of the world is. What happens to guests from overseas who may carry cash instead?
I'm not trying to prioritize foreign travelers over our own people, but in this case still seems like a strange business decision for a higher-end hotel.
It was! I do get the vibe that they were doing a refresh/remodel that would be done by our summer conference. It wasn't anything directed at us specifically - but the gift shop and the Starbucks had the signs up for sure as well as one bar/restaurant. There are higher end hotels out there but it was otherwise right up there. We did get literally wined and dined (a bottle in each of our rooms and a charcuterie tray and some chocolates and such) but it seemed this was a trend.
I'm surprised a high end hotel would even have a Starbucks.
We say "high-end," but it's really higher-end. Not necessarily the Waldorf Astoria or a St. Regis, but more like a city's primary downtown Marriott or Hilton. Basically hotels that cater to conferences/conventions that have a lot of their own meeting space. For these kinds of hotels, a full-on Starbucks or a cafe/coffee shop that serves Starbucks coffee is pretty typical since conference attendees come down early and often don't have time for a sit-down breakfast, rather just a grab-and-go coffee and breakfast sandwich.
Yeah, it was higher-end but not the highest end. I should have clarified better.
It feels almost scary how much of the coffee service market that Starbucks has their fingers in. Cruise ships, for instance, always have an extra-pay coffee shop, but on some ships it's just a Starbucks - complete with the uniforms and everything. At the same time, the coffee coming out of the giant foodservice coffeemaker that spits joe at customers for free while they wait has Starbucks branding on it.
Most tipped employees prefer cash tips. I would assume that's why the sign said that.
Of course, but the "strange business decision" JC was referring to was refusing to accepting cash for purchases.
I either responded to the wrong comment or was just tacking mine on to the end of the chain, but my recollection of my main focus with the comment was your visceral reaction to the sign.
Ah yeah, no I was well aware intellectually that it was for the staff who had no control of the business decision to not accept cash and still deserved to be tipped.
It was a mix of an automatic response to authority being stupid and a weird "sure you don't want to accept my money but you'll accept my money" thing.
Ohhhh I was taking it as "my cash isn't good enough for you but it is good enough for your staff?"
I'm not sure it was the most logical indignation I'd experienced. Maybe a bit of that or "it's not good enough for you but you want me to tip your staff with it so they won't quit and you don't have to pay them more"
But mostly it was reactionary
One of the reasons shops in some areas are going cashless is because having cash on premises is a liability, increasing chances of armed robberies. While I think shops should accept cash, I don’t think they should be forced to so long as that issue remains unaddressed.
I feel that using "armed robbery liability" is such a poor excuse. Sure it ranks on the con side but realistically low. If there's any kind of negative liability it's internal theft of which I've seen first hand several times in my lifetime (a manager was fired at one of my jobs), and I have yet to experience armed robbery to any degree of separation closer than hearing it on local news.
Robberies and muggings started trending down in the 90s, as cash started falling out of favor. It makes sense that they're related, as lower probability of a return proportional to the risk disincentivizes crime.
Cash also causes a lot of friction in transactions, and takes up significant payroll to deal with. Drops, pulls to deal with lack of change, end of day counting, all add up to a lot of wasted time. Then money needs to be safely transported to a bank, which requires contracting an armored courier if you don't want to be a serious robbery risk.
It's definitely a factor in my choice to not use or carry cash. Credit is physically safer, far more convenient, not dirty, and financially smarter. I will not do business with establishments that only take cash, and will actively dissuade others from as well. Lack of access to banking is the problem to be solved, not returning to something even worse.
This is where the rub is, right? I won't do business with an establishment that only takes card (when I have the option) because I don't particularly want every cent of my spending to be able to be data mined.
Of course, a business can and should obviously take both forms of payment.
This is one of those things that I think is especially vital and over looked in the modern age.
People are so used to it and think "so what", but at the same time we have a lot of potentially scary people grabbing for power, and I worry we're going to be reminded why privacy is supposed to be a right in a very awful way.
"Your health insurance claim has been denied because you bought 200% of your allowed junk food quota that week"
Promises of anonymity and privacy have been broken over and over ever since we realized how powerful big data is for commerce/advertising/influencing
This is my favorite break of trust...
https://www.npr.org/sections/thetwo-way/2017/03/14/520123490/vibrator-maker-to-pay-millions-over-claims-it-secretly-tracked-use
Didn't pretty much all violent crime decrease during that time frame? I'd need to see a causal link not just a correlative one. Otherwise we're back to ice cream sales causing polio.
I use mostly card but I don't really want to not be able to turn my cash into food or necessities. And in the grander scheme of things, ceding all this to large banks and payment processors doesn't sound ideal.
I think you're going to harm a lot more people than you help with this math. You're basically telling people already in bad positions that their money is literally no good unless they jump through more hoops, that often cost more money.
It doesn't have the emotional impact of an armed robbery (especially when they turn lethal), but you're going to affect millions more people in ways they can't combat at all.
Is the issue of people committing armed robbery actually “unaddressed”? If you mean “addressed to the point where armed robbery is guaranteed to never occur anymore” then I don’t really think that’s in the realm of possibility, and if you mean “until politicians do literally anything about armed robbers sticking up stores with impunity” then I think that they probably have done something in most places.
I also want to point out that the stores most at risk of experiencing armed robbery are the ones in poorer areas that disproportionately serve unbanked customers, and as such are not even economically able to refuse cash. Ergo, pretty much none of the stores that are refusing cash are doing it out of a serious concern for preventing armed robbery.
Also, one crucial item is that while armed robbery has decreased, identity theft has increased. The more widely credit cards and other electronic payment forms are used, the greater the risk of digital fraud and identity theft. In many ways the risks have been offloaded onto the customer. Mugging someone for a few hundred bucks is only worth it to the most desperate criminals. But digitally robbing an individual? That's something that can be worth thousands. The store drops the risk of armed robbery, but I have to take on the risk of the card skimmer.
This risk is mitigated with mobile wallets like Google/Apple Pay, however. Even if those are skimmed, the info is only good for that one transaction which greatly limits potential damage.
Support for those isn’t everywhere yet, though. Coverage is good in cities and decent in rural areas (I was surprised at how many places accepted mobile payments in my one-stoplight hometown) but you’ll still run across the occasional terminal that requires a traditional card.
It's either Home Depo or Lowes, can't remember which, but they explicitly won't allow Apple/Google Pay. You have to use their app or use a seperate card.
I explicitly don't want to be forced to "opt in" to further user tracking just because I don't want to use cash for large transactions.
Yeah, it’s irritating when that happens. Walmart is another store that’s holding out against the big digital wallets, insisting that you use a traditional card or their app.
Whatever data they’re not getting from Apple/Google Pay users must be substantial if it’s inspiring this behavior.
I would imagine it’s less of a data thing and more of a lower credit card transaction fee thing. Apple Pay and android pay introduce more middlemen and the middlemen get paid.
Maybe, but that seems unlikely as Apple Pay doesn’t cost anything for users or merchants, with its fees instead coming out of the pockets of banks, suggesting that the only thing Walmart loses from accepting it is data.
Apple may not charge anything to use it, but that doesn't mean that it's not more expensive. Credit card processors who do not offer a flat transaction fee will often charge different amounts for different types of transactions, and NFC transitions tend to be higher.
Big retailers squeeze the credit card processors for really low rates, which is part of why you'll find things like credit card rewards programs that exempt them from the higher reward tiers. Costco famously doesn't take all credit cards - they only accept Visa except at their health-related departments where they also accept MasterCard.
I heard from a business owner that he stopped taking cash because having his delivery drivers carry cash required them to be paid more since it was considered a more dangerous job.
I'm going to take this opportunity to promote post office banking, which exists in the UK.
Is it just that the post office is also a bank?
I'm American, but I saw signs advertising banking services in the post office in London.
Wikipedia says this. postal banking
I'd thought you were but wasn't sure!
See obviously in the US it has to be Walmart instead.
Looks like the recent bill went nowhere in congress which makes sense given the state of things.
You're joking, but Walmart has been trying to be a bank for decades. And they have been having recent success.
The Walton Family (which owns Walmart) has owned the largest bank in Arkansas for decades. Anyone from Northwest Arkansas is familiar with Arvest bank. The bank is not run by Walmart though.
https://en.wikipedia.org/wiki/Arvest_Bank
No I was mostly being serious that we'd rather privitize those services to literally Walmart than use the post office, but I appreciate you providing references.
This should not be a thing at all, as an example, you cannot pay using cash in public transport in the Netherlands.
What does this mean? Is cash worth less than digital money? How can that be? It cannot be worth the same if it cannot be used.
I don't have much in cash, but I am very much against this trend of phasing it out.
Can you take cash to a post office or something to buy a ticket? This has been a thing in most places for a long time because having a bus driver count coins slows the system down a lot.
You can get an anonymous stored value card, and then put money on it by inserting coins into a machine, or paying with paper money at a service desk (which incurs a € 0,50 fee). But both of those aren't available at all stations, so it's very inconvenient.
I think the most common way to use it now is to associate it with a bank account, either in prepaid (automatic top-up) or postpaid (monthly invoice) mode. There's also machines at supermarkets that let you transfer money from a debit card to the stored value card. As of late, you can also use a debit or credit card in place of the stored value card. But all of those methods require a bank account.
As a Canadian, this is hard for me to wrap my head around. How are these people getting paid for work, cash or cheque? How are they paying rent? The same way I guess? For those who can't maintain minimum balances, I get that, but we have no fee/no minimum balance banks in Canada. At 10 times the size I have to believe there is an American bank that can offer the same?
Apparently 6% of Canadians are unbanked but that number includes people who are online only or have an account but can't get credit so it definitely seems like a much smaller problem in Canada, which is surprising to me but I guess also why I am surprised about it being such an issue in the US.
https://money.ca/banking/unbanked-canadians-turning-away-traditional-financial-institutions#:~:text=With%20the%20banking%20industry%20so,savings%20account%20of%20any%20kind.
There is a parallel system to the credit rating system most are familiar with. Everyone is familiar with FICO, your credit score when getting a mortgage, etc. But the banks also maintain a common rating system for bank customers. Write a bad check? That's a mark on your bank record. Overdraft too many times? That's a mark on your record. Been the victim of fraud an abnormally large number of many times? Quite possibly on there as well. It's similar to the credit rating system, except ranking your value as a depositor rather than a creditor.
Too low a rating, and your bank will simply drop you. You can try to go to another bank, and they might just deny you too. Each bank has their own standards for assessing customer risk, but they share common customer profile databases. So your record may be good enough for one bank but too bad for another. But with sufficiently bad banking history, you may be unable to find an account anywhere.
Now, you might ask, "why doesn't the bank just offer a zero-risk account?" You could have an account that simply doesn't allow you to overdraft. And maybe it doesn't allow wire transfers and other common methods of fraud. You put money in, you take it out, and your money has long clearing periods before its available. Why don't banks offer this type of account to unbankable people?
They don't because there's no money in it. Those who have bad banking records rarely do so because they simply are irresponsible and bad with money. They have bad banking records because they're poor and on the edge of survival. They write checks they don't have money for, hoping it won't clear before payday. They do this because it's the only way they can make rent. They overdraft, even knowing the high fee, because they need to make a vital purchase. They're more likely to be victims of fraud because they're desperate, and desperate people are easy to take advantage of.
Does that sound like a profitable bank customer to you? Will the bank will be making much interest off their deposits? Will they have much success offering them financial services like investment advise and money management? People with bank records this bad are poor enough that they simply are not profitable customers for banks. Even if banks could structure an account that these high-risk customers couldn't possibly overdraft from, it wouldn't be worth the hassle.
People without banks will often either have to find an employer who will pay in cash (such as irregular day labor), or they have to use expensive check-cashing places. They get their pay check and then pay a percentage of it to have it cashed. Then, once they have that cash, they then often have to pay further fees to use it. If their landlord won't accept cash, they can purchase a money order or cashier's check with cash, for a decent fee of course. Or if you can only pay electronically, you can purchase a visa gift card or equivalent, one of those refillable debit cards that carry high fees and aren't properly FDIC-insured accounts.
In short, they do it by paying high fees. All the interactions you would normally make through a bank are done through separate for-profit entities that want their cut. You have to store your money in cash, but every time you go from digital to cash or cash to digital, you have to pay the toll.
That is sad and depressing but a good answer to my questions. Appreciate your taking the time to explain. I imagine something similar happens here too.
And they didn't even dive into the scary world predatory payday loans.
Typically up to like $500, due in a week, with a fee on the order of 10-30%. If you can't pay that week, you can pay extra to extend the deadline.
And poor people go for it because that's the only way they'll make rent on time.
A fair bit of America's wealth is built on the back of charging poor people more than rich people for the same things.
A not-poor person pays $20 for a 30 pack of toilet paper, because it's cheaper per roll. A poor person pays $5 for a 4-pack, because they only have $50 left for groceries that week, and goddamn food stamps don't buy diapers.
(That was a reference to Eminem's Lose Yourself...this has been a problem for a long time).
IIRC, the interest rates on payday loans were actually lower when the mob was running an equivalent. They're absurdly predatory.
True enough. Similar issue for Canadians.
And that is incidentally why they also target poor people with shitty credit cards. They can rack up tons of fees and interest, subsidizing the use of the 'responsible' upper classes.
Sure, they'll lose a bit when people default on their loans, but that's what the derivative loan market is for. At 21% APY, if they can collect for a year from 100 people paying minimum payment, they can easily afford to eat the loss of 1/5 of their customers defaulting, because they'll probably hop on that treadmill as soon as they are able again.
This of course is a giant roulette wheel of risk. If too many people default on their loans at once, then the banks need a bailout because we let them spread their assets too thin.
Back when I lived in the US (only about 5 years ago) I paid my rent by check because they charged me extra to pay it any other way. It was literally the only thing I needed checks for.
Makes sense. I guess how do you get checks to pay your rent when you don't have a bank? I guess cash is really you're only option.
yeah landlords definitely don’t want to accept cash (with relatively good reasoning) - shops talk about increased breakin risk for accepting cash but a landlord is going to be accepting tens of thousands of dollars in cash, all concentrated around the same day of the month. If everyone in my apartment building paid in cash (which isn’t allowed), the office would have at least 100k in cash (probably more) on the first of the month.
Yeah when I rented I primarily paid with a cheque although I did have one where I walked over to his house and handed them cash. If you don't have a bank and your landlord doesn't accept cash then I guess you just live somewhere that does?
yeah it's a situation where I think it's completely understandable to not want to accept cash, but we just don't have public infrastructure that supports that. Postal banking along with robust public transit would make this more acceptable imo.
Cashier's checks. I had a landlord that mandated those or regular checks.
But if you don't have a bank account can you still get one? I honestly don't know. Can you walk into any bank with cash and ask for a certified cheque?
It depends on the bank's policies, but yes, some banks do offer this service, usually for a $5-10 fee.
Good to know! I guess that would be another example of punishing someone who cannot get a bank account for whatever reason.
Yes, you can get them many places, including the classic Post Office Money Order.
Money orders are what are used instead, and basically every grocery store and many convenience stores sell them for a $1-$3 fee.
I use them myself since I get 1% cashback on transactions with my debit card, and money orders at the grocery store are just processed like any other transaction there-- nets me more than the $1 fee costs me. The grocery store especially will typically offer check cashing as well (naturally for a fee), so it's rather common to see people on the first of the month at the customer service desk cashing their paychecks and getting a money order for their rent at the same time in poorer neighborhoods.
Interesting. I guess that explains what a lot of people without a bank do, thanks.
I just remembered, this landlord also accepted Money Orders, which you can get from the USPS...back in the day when $1,000 would pay for a 2 BR apartment no problem.
According to the article, 6 million Americans are unbanked, which is a little less than 2% of the American population - suggesting it's a bigger problem in Canada.
I find this happens a lot with articles on america. The population is extremely large, so while "millions" sounds like a lot of people, it could actually be less than 1% or Americans.
True. I just couldn't find a good source for Canada and that article included a lot of people that still use a bank.
There are businesses that charge fees to cash checks for people
This was in the article:
That doesn't make sense to me since there are PLENTY of banks and credit unions, both online-only and brick & mortar, in the US that offer free, no minimum checking/savings accounts. Of course when I say free, that doesn't mean no fees; just no fees for having $0 in the account. Literally all the banks I'm a customer of (I'm not rich; I just try to "hide" money from myself in different places) have free, no-min checking/savings, which are what I use. I don't have a single account that requires a minimum balance. I've even some free accounts that don't even require an initial deposit (I typically see $25-50 initial, but it can be withdrawn immediately).
The rest of stated reasons -- more privacy with cash, high fees, seemingly unpredictable fees, and even just general distrust of banks -- those all make sense to me. But I'm skeptical concerning lack of free, no-min checking and savings.
That said, I wonder if geography is playing a part here. I'd be curious to know where some of the unbanked live. I live in a city/metro area. I have lots of different options for banks, local, regional, and national/international. But I can see living in a smaller town in the boonies and only having one smaller bank be an issue. Especially if the one bank only offers minimum-balance accounts.
But not even just the boonies. How about poorer inner-city neighborhoods? Are there less banks in those areas? How far would/does a resident have to go to get access to a free checking account? Quick, convenient access to money is obviously important.
I addressed this here some:
https://tildes.net/~finance/1dpj/no_cash_accepted_signs_are_bad_news_for_millions_of_unbanked_americans#comment-btfh
People who consistently live check to check are more likely to end up with overdraft fees they can't pay or try to float til pay day, once you're flagged by the system you don't qualify for a regular bank account. Some of those second chance accounts have higher minimums, most of them have high fees
Tbh I think many regular bank accounts have fees waived by direct deposits and hidden minimum balances.
Yeah that was mainly the part I was trying to understand. I guess like anything our systems punish people in poverty and it surprises me because I am fortunate enough to not have found myself in that situation. I can only assume it's some combination of limited options and maybe credit score has something to do with it? I know a credit score is a lot more important in the US than Canada.
I'm in SoCal. One of our amusement parks, Knotts Berry Farm, is cashless. They have machines all over the park where you can load your cash onto a card for the day. Seems a little scammy, like the Starbucks gift card situation. It's an easy way to keep those little bits of leftover money people don't spend.
Ooh, that’s a whole different version of cashless and it sounds gross!
Am I able to pay with my own credit card or do I also need to transfer from my credit card into one of these venue cards? Am I able to take out the remainder from the venue card back into cash or my credit card at the end of the day?
I can easily see a scenario where I might go there, top up the card at the start of the day, and then have to leave much earlier than expected because of an emergency or something and if they took and locked up my money in that situation, I’d feel so burned by that!
You can pay with your own card. They also take Apple and Google Pay.
It doesn't look like you can get your money off the card, but it is accepted outside the park anywhere Visa or MasterCard is accepted. Still feels shady.
I've heard some Formula 1 races in Europe doing this. At some races, I think you can get unused credit converted back and refunded to you, while at others, unused credit is forfeited. Which is BS, if you ask me.
I know this isn't necessarily new. Arcades (at least in the US) have been using tokens for a long time, instead accepting coin currency. But you can always use those tokens at a later time. You don't lose them just because you leave. I have tons of tokens from a local arcade that I go to like once a year. And those tokens I have are from like the first time I went there years ago! At least it's usable over time. For the F1 races where you can't get money back, those credits aren't necessarily guaranteed to be usable in following years (certainly not at other races).
I've also been to some sporting events in the US where it's all cashless. No "credit" system (yet), but they only accept credit/debit cards.
I’ve heard a lot of complaining from businesses about the cost of handling cash. At this risk of sounding like an asshole, I’m going to be honest. I don’t care. I absolutely could not care less. The needs and privacy of the average working class person and the average person in poverty are regularly sacrificed for business needs and goals. So maybe sometimes, I just don’t care. Maybe sometimes, our needs come first.
I’m not unbanked and I do often use a credit card. But this change only makes things harder on the poor. And just as importantly, I don’t trust the motives behind phasing out cash. If we had a digital form of currency (no, not crypto) that could preserve my privacy or a more advanced form of physical currency, then I might be interested.
I’m not anti-change. I’m not an anti-tech Luddite. But I don’t trust the motives behind most “new tech” anymore, especially when it’s so obvious how easily it can be used to invade our privacy. The government (and who knows who else) doesn’t need to how I spend every single cent. If it were up to me, cash would stay and businesses would be forced to accept any and all legal tender.
The ones in power have human tendencies, impulses and motives. This right here is the core pro for not eliminating cash... it is a check on power.
We as a nation, everyone in fact, should read Paine's Common Sense. I'm all for rule of law to help us live for the common good, but government is a necessary evil in it's best form and independence is always preferred to any dependence on the state.
It's harder for poor people to beg for money when there's no cash. Don't have the time to research it now, but I'd be curious to know if places that have cash mandates are overall less-hostile to the homeless than places that don't.
I'm mildly skeptical of this being the reason. My primary checking account has been with a major bank (Wells Fargo) since high school, and they've never had a minimum balance requirement on that account for the 17 years I have been with them. The credit union I usually use for auto loans used to have a $100 minimum balance requirement, but I just checked and they got rid of it 8 years ago.
It seems like a significant number of people are afraid that if they deposit their money into a bank account, it'll get taken to pay their unpaid debts, back taxes, child support, and other such things. So, maybe "not enough money" means they're afraid that balance will quickly go to zero for various reasons. I learned this from a former roommate who cashed every paycheck instead of depositing it. Unsurprisingly, he ended up owing me a lot of money for not paying his share of the bills.
I promise you that Wells Fargo absolutely does have minimums, or at least has had them within the last 17 years. One of the reasons why I took all of my money out was that they had promised me that having both a checking and savings account would remove that minimum and the associated fees, and they later quietly walked that back and started charging me without notifying me. I had spent hours in line at my local branch trying to get rid of the numerous surprise fees they threw at me. This is the same bank that was guilty of rearranging the order of debits to increase the number of overdraft fees they could charge and are almost surely the reason why their overdraft fee system is no longer legal in my state, if not federally. There is no doubt in my mind that they are guilty of trying to fleece the working poor.
There could be any number of reasons why people have a different experience than my own, which is why I'm only "mildly skeptical". I just know that during the early years of my adulthood, my account regularly dipped into the single digits and I only ended up paying a fee one time when I overdrew the account.
I wouldn't be surprised to hear that it's harder to get this kind of treatment if you have a poor credit history, which I suspect is the problem plaguing most of the 6 million Americans discussed in the article.
Once you are flagged by Chexsystems you're generally not eligible for the typical accounts. The sort of "second chance" accounts have higher fees, minimums, etc.
Wells Fargo's appears to be Everyday Checking which has a low minimum balance of $25 and a $10 monthly fee. That fee is exempt for owners age 17-24 and people with large direct deposits or people with more than $500 in the bank at all times.
Which means even if you had needed the 2nd chance as a teen there would have been a tiny minimum and no fees. As an adult who gets paid cash, or doesn't get direct deposit, who spends most or all of their check each month... Ten bucks a month is frankly robbery.
And that's one bank that may not have branches in the neighborhoods or small towns where the unbanked live as this is an issue of poverty.
Okay, sounds similar to accounts in Canada and probably just a system that punishes people who make financial mistakes even harder.
This is just another way of making it even more expensive to be poor. Shameful.
I'm not sure what the article is suggesting we do about this.
The final paragraph is here
By "insist" do they mean enforce with laws? Do they mean "complain"?
While the former would be great, I don't see how that would even work for a lot of services. I suppose I could mail an envelope full of cash somewhere for my cloud storage bill every year, but that has its own problems.
If they mean "complain" then I don't see why a business would be inclined to care at all. If they're not accepting cash, it's because they've already run the numbers and decided that cash customers are worth throwing away the business.
I suppose a loud boycott could be attempted by all of the "banked Americans" but there's only so much you can do to boycott when you still need to buy groceries. The grocery stores in my area are not "cashless" but all of the self-checkouts that take cash are perpetually out of order and there's a very good chance that nobody is working the normal checkouts so you can't actually pay with cash anyway. I've left a cart full of groceries at a checkout before because I only had cash and the manager just didn't care.
Businesses try things all the time that they walk back or find out to be ineffective or just bad ideas. Complaints are certainly a way to convey that. If their numbers don't account for dissatisfied customers, dissatisfied staff, etc. they may have made a bad decision. Or any increase in safety or financial gain is outweighed by the bad PR.
Sure, but this isn't a business trying some new innovative way to save money doing business. It's the entire market. The entire market isn't going to walk back.
Even if I did want to complain and go to the company not doing this, there's literally nobody else to go to in some scenarios. I can't go to an alternative electric company, and complaints are presumably sent straight to the shredder because they are fully aware that their customers can't just go to a competitor.
I remember the political campaign to convince banks to boycott South Africa.
Even entire markets can be moved to change with enough pressure
Speaking with lawmakers at all levels would be the next step then. I was definitely thinking about individual businesses as that was the bit I was responding to.
It would probably be sensible to limit any legislation requiring a business to accept cash to establishments with some sort of physical storefront. I think that would be very doable legally.
Otherwise I agree that there isn't really any likelihood of non-legislative action making much impact here.
Personally, the less I have to use plastic card for purchases, the better.
I feel like this is designed to make Americans poorer than they already are, because paying with cash has a HUGE benefit: when you're out of physical cash, you. are. out. Granted, I live in a society that still heavily uses physical cash... which I rather kind of like. I once heard that paying with physical cash carries an actual psychological 'weight" to it- you can very much 'feel' the loss of money.
Meanwhile, this is why I say credit (or even debit!) cards are huge trap- I haven't looked recently, but I know there have been studies done saying that a huge percentage of American's finances go into paying off credit card debt. Rather unfortunately, Americans have a consumerism culture (not that other countries don't, mind you), and so they become careless with their spending- "Oh, I'll just put it on my card an maybe pay it off... eventually". Then the bill comes along, and they go "WTF there's no way i spent this much!" Actually, you did... and paying by plastic makes this scenario far too easy.
The design of your currency helps that more than you would imagine. All US currency of value are paper bills that are all the same size and weight; if you are blind a $1 bill is the same as a $100 bill. There are coins but they are worth so little that they are basically dead weight; there is nothing at the supermarket you can buy for a quarter, the highest common denomination of US coin.
Cash in the US is basically broken and our political machine is too broken to fix it. There are so many other minor issues that don’t even get talked about.
Then again I know a bunch of people here who say the same things you do about carrying cash, so this might not be as much an issue as I am making it sound.
So honest question here. Where is the intersection between the "decentralized" crowd, specifically the cryptocurrency (and fiat currency?) fans, and the unbanked citizens of the west and other countries with semi-stable currencies? Like, is there a group of apathetic simians and their sea-going cousins that are helping to fund financial education seminars (while gently pushing the merits of blockchain and anonymous currencies as the One True AlternativeTM)? Where are they? Like, aren't the unbanked shoe-ins to be ideologically allied through a mistrust of formal banking institutions, desire for privacy from centralized institutions, and so on? Or are the disenfranchised and unbanked (and also non-tech-savvy) so undesirable to these folks that they don't even want to pitch them investment schemes?
I know that there was a lot of positivity and self-congratulating when El Salvador and Central African Republic (CAR) adopted bitcoin as a legal currency and promoted digital banking, but where does supporting financial literacy (and even propaganda), budgeting, and investing fall into this for the unbanked? Isn't that a problem that DeFi/crypto could potentially be solving?
Fascinating question. Some are simply poor, but some may be nearly exclusively outside the system but not poor at all.
Something like Machankura as a low-tech banking method?
https://www.youtube.com/watch?v=Vi7KsgfNcxQ
And Bitcoin For Fairness for education?
https://bffbtc.org/
I'm still looking them over, but this is exactly what I was hoping to see. Thanks for the links!