VISA takes its War on Cash to US Retailers

Forget “legal tender.”

“We’re focused on putting cash out of business,” Visa’s new CEO Al Kelly said on June 22 at Visa Investor Day. Pushing consumers into digital and electronic payments is the company’s “number-one growth lever.” Visa has been dogged by the stubborn survival of cash and checks, despite widespread government and corporate efforts to kill them off.

Globally, check and cash transactions totaled $17 trillion in 2016, Visa President Ryan McInerney said. Confusingly, that’s up 2% from a year earlier.

So today, Visa rolled out a new initiative on its war on cash. It’s designed “for small business restaurants, cafés, or food truck owners,” and the like. In this trial, it will award up to $10,000 each to 50 eligible businesses (online businesses are excluded) when they commit to refusing cash payments.

Going “100% cashless,” as Visa calls it, means that consumers can only pay with debit or credit cards or with their smartphones.

That’ll be the day. You go to your favorite taco truck, and when it comes time to pay, you pull out a wad of legal tender, only to be treated to an embarrassed nod toward a sign that says, “No Cash.”

I’d walk. But Visa hopes that other folks will pull out their Visa-branded card or a smartphone with a payment app that uses the Visa system. This would help Visa extract its fees from the transaction.

“We have an incredible opportunity to educate merchants and consumers alike on the effectiveness of going cashless,” Jack Forestell, Visa’s head of global merchant solutions, said in the press release, which touted a “study” that Visa recently “conducted” that “found that if businesses in 100 cities transitioned from cash to digital, their cities stand to experience net benefits of $312 billion per year.”

However dubious these “net benefits” may be, one thing is not dubious: Visa gets a cut from every transaction made via Visa-branded cards or digital payment systems that use Visa. The merchant pays the cut and then tries to pass it on to customers via higher prices.

The total card fees normally range between 1% and 3%. Among the entities that get to divvy this moolah up are the bank that issued the visa card and the credit card network – such as Visa, MasterCard, and the like. Visa gets just a small piece of the pie, but if it is on every transaction, it adds up. And payments by cash and check seriously get in the way of a lot of money.

In 2016, Visa extracted $15 billion from processing transactions globally without even carrying any credit risk (the banks have to deal with that).

“To Visa, a cashless culture means convenience, security and ease of use. That translates to freedom for consumers and merchants alike,” said Forestell.

To rephrase: To Visa, a cashless culture means more revenues and more data collection on consumers. That translates to bigger compensation packages for Forestell and et al.

And for consumers, it translates to loss of privacy and higher prices. And for merchants it translates to higher transaction costs.

“The idea that merchants don’t want to accept cash is a myth,” Mallory Duncan, senior vice president and general counsel at the National Retail Federation, told the Wall Street Journal.

To make that no-cash policy go down more easily, Visa is willing to award eligible merchants $10,000 – but not in cash. Instead, Visa would pay the merchant to upgrade the checkout technology to be able to handle contactless payments via smartphone and to help with marketing expenses.

“We’re really viewing this as the opening salvo,” Forestell told The Journal.

Visa accounted for 59% of purchase volume on US general purpose credit and debit cards in 2016, compared with MasterCard’s 25%, according to the Journal.

Visa has been desperately trying to get its tentacles into payments that consumers typically make via cash, such as parking. Hence the “smart meter” with a card reader. They’re all over San Francisco. The rate changes depending on whether there is high or low demand. As aggravatingly expensive as parking is, it’s just peanuts.

So Visa is trying to go where the big bucks are, such as rent payments. But it’s an uphill battle. Landlords would be nuts to accept to pay a fee on such large amounts when there are free forms of payment available, such as checks and now-a-days automatic payment by the tenant’s bank.

And Visa is trying to get its foot deeper in the door with governments, where the government pays the fee. The Journal:

Abroad, it is partnering with governments to move more payments onto its network, including an agreement that it recently signed with the Polish government to move the country to a cashless system.

In the US, you can pay the government with credit cards for many things that used to be paid for by check or direct bank transfers, such as taxes and penalties, to the greatest enjoyment of the entire credit card complex. But the IRS uses payment processors that charge taxpayers a fee, while checks are still free.

There is much to be said for switching to electronic payments to handle long-distance transactions, if the transaction costs are low. And electronic payments are useful for all kinds of other things. But standing in front of your favorite taco truck and being denied a taco because you insist on paying with what is still legal tender in the US is hard to swallow – especially since the only motive behind it is the profit-motive at Visa, which will result in higher taco prices, which make it even harder to swallow.

This is when the ocean of hype turns toxic. Read…  Silicon Valley’s “Death by Overfunding”: Next Unicorn Collapses

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  158 comments for “VISA takes its War on Cash to US Retailers

  1. SteveW says:

    I don’t now, nor will I ever patronize a “NO CASH” business. I will henceforth resist using my Visa card and use my Master Card and Am Ex in it’s place. The use of credit cards is primarily for online and/or potential warranty issue purchases as I pay the balances every month. I have even gone so far as to start using $2.00 bills, $1 coins and half dollars just to keep things interesting.

    • RM says:

      Wolf, outstanding report on Visa the Vulture of 2017.

      For many years, the companies issuing my credit used MasterCard. Last year, 2 credit companies changed to Visa and offered no explanation why?

      I would walk away from any business that refuses cash and pay the full balance on my credit cards 3-4 days before the due date.

      Steve, we’re considered “dead beats” by the industry since they can’t charge us interest.

      Anyone who pays with a smart phone is brain damaged.

      • Anon says:

        I had the same experience with one of my cards. More importantly, Costco switched from American Express to Visa last year. My guess is that their credit card business picked up significantly as a result.

        A lot of small businesses prefer cash to anything else that leaves a paper trail.

    • Scott P. says:

      Thank you for this article Wolf…I kid you not I am cancelling my Chase Sapphire Visa card as we speak and am only keeping my Mastercard and Amex cards….I’ve known this day was coming for a while and have built my life so I can walk away from these evil people……I will also NEVER eat from any establishment that bans cash…..Banning cash (or similar like the malarky they pulled in India) always hurts the lowest and poorest first and foremost…I refuse to turn my back on humanity so small group of evil people like Bezos and his friends can assume total control of US infrastructure…..
      I dont care if it saves me a couple hundred dollars a year..
      I dont care if its cool and girls will only date me if i pay with my phone…
      I dont care if its mildly more convenient…..
      I wont hand over my decency as a human being…..

      • Paulo says:

        Good for you, Scott. Good for you.

        Right now I use a Credit Union Mastercard for online stuff and gas. My two favourite restaurants not only prefer cash, one only accepts cash. Both have been in business for decades. The day purchases go to CC only is the day I never eat away from home and will certainly reduce my purchases.


      • Owatica says:

        MasterCard is neck deep in the same sewer. Don’t kid yourself; any plastic is dangerous to your freedom and wallet. As stated, for online and long distant purchases, plastic is handy but anyone who doesn’t accept cash does not get my business.
        Moreover, this is the same way the banks befuddled humanity about what “money” really is. They oh-so-slowly pulled real money; gold and silver, away from people by replacing it with “certificates” which the people, at the time, understood were debt instruments or IOUs from the bank. They could go to the bank and get real money. However, the banks were patient and the people gradually forgot what money was by using the certificates for everything and when they were replaced with gold “backed” dollars, no one really noticed. All we have now is essentially worthless fake fiat and they don’t want us to have THAT either. So, just like the certificates pulled the economically illiterate public away from real money, the people are now being pulled away from even fake fiat; which does offer at least some modicum of freedom from bank fees. The grotesque and criminal central banks are now offering “guidance” to government officials so they can “sell” cashless transactions to the public; not only enslaving us but setting us up for their final economic gutting spree. They won’t stop unless we refuse to comply or defend ourselves accordingly.

        • alex in san jose says:

          The problem is, it’s probably illegal to ban cash. “For all debts public and private” and all that.

          Like the idiocy of “Dynamic Pricing” I’ll boycott any place that won’t take my cash.

      • Happy Camper says:

        I’m with you on that. I’ll NEVER patronize a place that requires a credit card, even if a bank debit card. Nope.

    • cdr says:

      Hi SteveW,

      I’m not quite as militant as you with the $2 bills and all, but VISA in a war with cash is really dumb. This HAS to be a made up story from MasterCard or Discovery trying to make VISA look foolish. Sort of a Russian Conspiracy adapted to smearing a business competitor. Then again, some idiot newly minted MBA might have woke up with a bad idea that he bullied some schmucks into going along with.

      If it’s true though, all VISA has to do to get me to use their card is to offer lots of points that I can use at Amazon, just like my main MasterCard. Just offer more points so I have a reason to switch over. Or, like my Sams Club MasterCard that gives me 3% back on gas purchases and 5% back on travel. My VISA sits in a drawer as a spare that I occasionally dust off so they don’t cancel it out of lack of use.

      You can be sure MasterCard and Discovery are doing happy dances at their good luck. VISA must be desperate.

      • Wolf Richter says:

        The source I linked was Visa’s own press release on this initiative. I also linked the WSJ which had interviewed the Visa guy on this. And I linked Visa’s own document where it says that it is trying to put “cash out of business.” So I don’t think this is a “made up story from MasterCard or Discovery.”

        Visa is trying to impress investors – and no one else. And from that point of view, it makes some sort of weird sense.

        • cdr says:

          Visa is really dumb here.

          Unless the other credit card companies join the war on cash – not likely as the globalists are on the run for now – merchants will happily put signs in their windows stating “VISA not accepted but your MasterCard and all the others are”.

          I can just hear the goofballs in the executive suite “We don’t need no stinking points to attract customers. We own the market. Nobody can tell US what to do. Our investors will believe anything we tell them … Just like Mikey will eat anything.” (old time commercial for the kids who don’t get the reference). They may even have a Russian angle in their back pocket. The media will buy into it.

          Agree that they may be thinking this impresses investors, but, in actuality, will the algos REALLY care that much? How do “no cash allowed” press releases affect banging the close or spoofing? I think an article about the first signs going in the windows will have a bigger affect on the algos over a weird plan by a manager in a bubble.

        • cdr says:

          Then again, it could be a weird plan to popularize Visa in the Eurozone. This could be the second wave in their war on cash. As a quid pro quo, maybe Visa has a master plan to sell credit card debt to the ECB under a soon to be announced program to create inflation in the Eurozone. Visa … the official credit card for the Eurozone … backed by the ECB. Get your ECB Visa today. I bet their points program would be off the charts!

          One question though … will Syrian refugees still get to use cash or will they be issued state Visa cards as part of their welcome?

        • Valuationguy says:

          In response to CDR (who responded to your post):

          Visa is not doing this in a vacuum. MasterCard, Discover, AMEX, and all the major European and Asia card consortiums are ALL undertaking similar programs to ‘kill’ cash.

          They are selling it to the gov’ts (and banks) of the world as a better way to monitor transactions and boost taxation….but in the end it all about giving the card companies and the issuing banks a piece of a BIGGER pie. Every transaction in which credit/debit is used can be hypothocated into even more revenue by the banks through debt derivatives……a potential income stream that CAN’T be generated when cash is used.

          The true cost (giving up control of ALL your assets to the banks) above the transaction fee (which somewhat matches the value of convenience for the consumer) isn’t really seen as a cost by the public until a crisis occurs…like what happened in Cyprus and Greece.

        • cdr says:


          If the globalists were still running things, or if they make it back to the big chair, then your vision will prevail. Negative rates can’t exist without cash restrictions. And negative rates are the goal of the globalists, who need central bank money to provide sovereign debt monetization and pumped up asset valuations.

        • laura ann says:

          Wolf: what Visa control freaks are doing is 100% illegal and people need to cancel their cards in protest. Businesses going along with this will lose business as people are reluctant to use C cards because of skimming common in restaurants and gas stations. Prepaid gas cards convenient way to buy gas. Cash is king.

        • d says:

          You will know they are serious and not just making noise to bully retailers and impress shareholders when the refuse to give cash advances on their credit cards and cease supporting debit cards.

    • laura ann says:

      Steve: Me either, this whole agenda is illegal period, should be outlawed as folks have the legal right to pay as they wish. A prepaid debit card (Blue Bird from Wal mart) is what we use to order online, not linked to bank. Can be used in eating out. I carry cash and have a plastic bottle of change in the car.

    • nick kelly says:

      Visa has a very powerful ally: in US the IRS, in Canada, Revenue Canada.
      A plastic- only economy is a tax authority’s dream.

    • Norbert says:

      Mastercard hat pioneered this approach. They have paid Abba-Singer Ulvaeus and his Abba-Museum for ranting against and not accepting cash. That has produced very many newspaper articles worldwide, which hardly ever membered the Mastercard-sponsorship.

    • I am flat out tired of hearing about “Cashless” society. Personally, I can understand why the governments want it. (Currency controls, info gathering, etc) and of course a company like Visa that does nothing but acts like a passthru is collect nickels and dollars for every transaction. Great business model i have to and if i was bright enough to have figured out that twenty years oh my… It just seems that one day we American paupers will wake and face a “bank holiday”, Our government is flat broke and when they pull the trigger it will be like India here…

      • alex in san jose says:

        I won’t be like India, it will be a lot more fun. They have pepper powder; we have guns.

        I can’t tell you how many times I’ve been in the market and had the person in front of me take 15 minutes with this old “Try a card, any card” trying to find a card that’s not tapped out, or fighting with the machine (we’re changing over to cards that have that little gold “flower” on them) routine. While I get up to the cashier and it’s nice, easy, cash. You can see the relief on the cashier’s face.

        The other day I was the one fighting like hell with the machine because I used my debit card – stupid me because I could have brought more quarters with me and had enough – and it took a sub-manager to come over and “caress” the card into the machine and it even took him several tries.

    • Janice delane says:

      I agree. Not only are these monetary asset stripping cartels trying to cash in on every aspect of our lives, they are working with government to create a cashless world so fiat digital currency can relace money and our lives are completely contolled by electronic credits. The powers that be can turn it on, shut it iff, add or take it away at will. They can track our every move and basically decide who lives and dies. The agenda is much more chilling than the obvious pathological greed.

  2. Gian says:

    I would imagine too that the taco truck operator does not report all his cash to Uncle Sam, which is a bigger incentive to keep accepting cash than is a $10K bribe from Visa. As you point out, that $10K will be returned to Visa with interest in short order.

    • Craig says:

      This is spot on. I imagine most small retailers, in order to survive, do not report all of their income to tax authorities and cash is king in this regard. No incentive will be big enough to eliminate this perk.

      • AlexX says:

        Craig –

        Ya think?

      • Kent says:

        Took my motorcycle to have some electrical work done at a small, local shop. I asked how much after they figured out the problem. $182 with CC, $170 cash. Stopped and got $200 out of the bank ATM on my way to pick it up.

      • alex in san jose says:

        Survive is the key word here. My tax rate is close to 20%. Yep, 2 grand taxes at the end of the tax year on a $12k income. I can’t imagine how much worse it must be running something like a taco truck, where you’ve got all kinds of registrations and certifications etc.

        So yeah, I made $60 or so playing my trumpet on the 4th, then the following friday-saturday-sunday. It all went for food.

        Ban cash and it’s the little guys like me, and the guys who walk up and down selling roses, and the pedicab guys, and the guy selling knockoff Sharks jerseys who’d a dishwasher in his day job, who are going to suffer.

        You know what’s going to happen? Underground currencies. We’ll start trading in silver dimes or something. In wartime, cigarettes are often currency. They’ve already killed one guy for selling “loosies” so maybe the war is on and most of us just don’t know it yet.

        • Happy Camper says:

          My tax bite is almost 50% or more, when you count:
          gross receipts tac for small biz
          9.2% on food, gas, everything else I buy
          income tax
          self employment tax
          auto registration – a tax

          Nah, no cashless for me. EVER.

        • adanata (@DataJunkie1) says:

          Remember… we are not allowed to actually “own” anything. We must pay “rent” on our homes; tribute to the King Rothschild Banking system. All “taxes” are tribute/rent. We do not “own” our businesses. The banks own them and allow us to keep only as much of the money we earn as they decide is acceptable to them. We are peasants, indentured servants and slaves to the global banking system. Burn into your brain this fact: if they can tax it or loan money to it, THEY own it. They can kick you to the curb any time they like. These absolute parasites are bleeding the host dry and are content. They have all they want already and are reduced to their ultimate goal of culling the herd; killing off the overabundance of sheep they have acquired.

  3. raxadian says:

    Buying using credit is more expensive than using cash. Debit might cost the same than cash or just be slightly mire expensive depending on the country. People worldwide would be less willing to use cash if debit cards were way more accepted. But noo most places is cash or credit and since credit costs more…

    Visa won’t be able to “kill cash” unless it starts to focus more on debit.

    Heck outright giving out “free” debit cards by mail didn’t work, as people eventually wised out to it being a scam.

    • TJ Martin says:

      … even if you pay all your credit card bills off as they come credit purchases cost the retailer money on each and every sale .

  4. Lee says:

    Here is Oz there is war on businesses that only take cash. Somehow that is equated to dodging tax. Maybe with some yes, maybe for some no. Costs are too high for credit cards here.

    Australian banks make a fortune compared to banks in other countries. High fees on everything.

    Use a credit card overseas and get hit with a 2.5% or 3% surcharge.

    Many banks here are actually getting rid of some type of bank issued cards. AMEX branded cards issued by banks that have some type frequent flyer mileage are being axed next month. They don’t want to hand out the miles/points anymore. They are also implementing tiers on the amount of points you can earn per month on their other cards in the frequent flyer program.

    That even includes the “Black” cards.

    I wonder if they’ll refund the rest of annual card fee for cancelling the cards?

  5. tony says:

    Visa can stick their card you know where.

  6. michael says:

    This shows you how desperate they are. My guess is that their growth is cratering. There is always a bit of truth in every story.

  7. Gil Obrero says:

    A simple remedy for retailers is to offer a discount for all cash payment.
    Easy and almost costless to do as it loss offset by gain in lack of visa fees. And of course cash is far easier to manage in determining source and expenditure in the business.

    Or in other words, it frees up opportunities for more creative accounting

    • Wolf Richter says:

      Gil, I think in the US, credit card companies have managed to suppress that. I can’t remember the details… but this got dragged out in court. So if the merchant wanted to offer a discount for cash payment, or charge a fee for credit card use, they’d violate the terms of their agreement with the credit card companies, which could trigger the cancellation of the service.

      Maybe one of the readers remembers the details of how this went.

      • JungleJim says:

        Wolf, gas stations here in Florida routinely offer two prices. One is for cash, the other for credit cards. They’ve been doing it for years.

        The irony is that Visa is trying to push consumers into using a method of payment that would likely not work in an emergency like a hurricane. Over and above that is the issue of legal tender laws.

        • JB says:

          yes , additionally, most payments made to government entities here in florida have a surcharge they tack on if you pay by CC. So in effect aren’t you getting a “discount” if you pay by cash ? .

        • Kent says:

          I work in government in Florida and we do that. CC fees run from 1.5 to 2% and we make citizens who pay with CCs eat that. Otherwise it is just an uncompensated expenditure to the card processor.

          Governments have enough negotiating power and income to get better treatment from credit card companies. Most businesses aren’t allowed to charge different prices.

      • Keith says:

        I run a small business and accept credit cards. You cannot give discounts for cash payments. It will trigger a cancellation of your service.

      • The Count says:

        Here in Portland, Oregon alot of the food trucks have signs in their windows saying “Extra 50 cent charge for credit card use”. Either they are all blatantly breaking the law or its not actually illegal.

        • Bobby Dale says:

          They were not breaking the law, they were breaking a contract, a subtle difference, but a difference none the less. The law at the time did not protect them from the consequences of offering a cash discount.

      • Matt P says:

        Supreme Court recently ruled it has to do with the 1st amendment and knocked it back down to the lower courts to decide again. We’ll see how it comes out:

      • Lee says:

        Here surcharges on purchases by credit card are the name of the game. One gasoline station by the big shopping mall instituted a 3% surcharge for using AMEX cards.

        Never been back.

        Aldi charges a small fee for using a credit card. Sorry, but I won’t shop there for that and other reasons.

        Qantas charges a 1.3% fee for international airfares paid with a credit card with a max fee of A$70.00

      • johnson says:

        “So if the merchant wanted to offer a discount for cash payment, or charge a fee for credit card use, they’d violate the terms of their agreement with the credit card companies, which could trigger the cancellation of the service.”

        Gas stations all over the country offer a cash discount vs a credit card price.

        I guess the people who visit this site don’t drive much or are so wealthy they don’t look at prices? My guess is the latter.

    • Flying Monkey says:

      I live in Germany and have been selling off stuff on E-bay. I offer Paypal for international payments but in Europe with the bank transfer system there is no need to use Paypal, other than if the buyer wants the Paypal buyer assurance package. Some residents of Germany ask me if I will take Paypal. If they pay the fees I do not mind it. Some actually take up the offer.

      The European transfer system is real easy and most banks have an online system with the Bank sending you a 4 digit pin as text to your cell phone to be used to confirm the transaction.

    • Bobby says:

      In Canada, a discount for using cash is called “Canadian Tire Money” Lol , similar to monopoly money with a pic of Sandy McTire.

  8. Suzie Alcatrez says:

    ‘charge of $110 million (pretax) for severance costs’

    WTF? That’s a lot of money to say goodby to someone.

  9. John says:

    Ha Visa, I for one will stay clear of any business that refuses cash. And I’m fairly sure that most of the people I know feel the same way. So yes maybe you can get some suckers for $10K but I’d bet they are businesses that can’t turn that much profit in a year. And wouldn’t it be ironic if they took your money and still accepted cash? One more point, what are you going to pay them with? Credit? lol

    • The Count says:

      The article specifically states how Visa will provide the $10k. “Visa is willing to award eligible merchants $10,000 – but not in cash. Instead, Visa would pay the merchant to upgrade the checkout technology to be able to handle contactless payments via smartphone and to help with marketing expenses.”

    • TCG says:

      I find it silly to use credit to buy small items under $5 or $10 and most always use cash. I find it much less convenient to use a card with waiting for authorization, being sure it scans correctly, etc. The new trend of not requiring signatures for small transactions is also part of the CC companies’ efforts to try to increase their transactions. Yet a competent cashier can accept cash and make change in a couple seconds which is still faster than futzing with a reader or trying to get a phone to scan in most cases that I see while waiting in line.

      Like most financial things, many people are not aware of the fees bring charged (to merchants), think it’s free and don’t realize they generally get charged higher prices because merchants who accept cards have to raise prices to cover card use fees. The same price for cash or card is a scam that penalizes cash use. It’s ridiculous that cc companies force cash customers to subsidize the higher prices created by credit card users.

      I’m surprised that no one you know uses credit cards for small daily transactions because I see it every day from friends and colleagues. Going out to lunch with them and it seems like about 70 or 80% pull out the card and I don’t think they’d even notice or care if a place was CC only. Even for a $3 coffee, it comes out for many people. It seems to be even more pronounced among the millennial age group who got a card early and never had a habit of using cash except maybe as a kid.

  10. AC says:

    If you have never seen the BBC’s The Last Enemy series, it’s worth watching – just to see some of the abuses possible in a ‘cashless economy,’ as presented in the show.

  11. Truth Always says:

    How come ACLU has not yet sued VISA on the following independent reasons:
    1. Cash is a legal instrument to settle all debts personal and public
    2. Minorities may not have access to credit/debit cards
    3. Immigrants may not be able to / want to have bank accounts

    Little jest aside why US Treasury not sure VISA for forcing / ‘colluding’ with businesses to not accept cash!

  12. Marty says:

    “To Visa, a cashless culture means convenience, security and ease of use.”

    Yeah, to Visa it might mean security, but not to the rest of us. I can’t believe credit cards are more secure. Between companies being hacked for customer data, credit card fraud that’s off the charts high, and the rfid chips that can be read yards away by anyone, security is a joke.

    And how convenient is it to have to check on every credit card account at least once a week for fraudulent charges, report them and cancel cards?

    Btw, it seems that all the people commenting have not been millennials. Millennial almost universally don’t use cash. All tptb have to do is wait till we oldsters who insist on cash die off, or more likely, are institutionalized, and Bob’s your uncle.

    Alternatively, tptb can follow the India experiment that was no doubt shoved down their throats by the international banksters. There will be little protest and what there is will be ignored. As long as there’s beer and NFL, tptb will be successful.

    • Dan Romig says:

      “… football, beer and above all, gambling filled up the horizon of their minds. To keep them in control was not difficult.” -George Orwell, 1984

    • The Count says:

      I wish Bob was my uncle. :)

  13. geespy says:

    In US, isn’t USD Cash a legal and *forced* currency ? In France any body has to accept cash (at least for the precise amount as no one is forced to give the change out).

    • Wolf Richter says:

      Yes, that’s my understanding. “Legal tender” means – in my imagination – that it is the legal currency everyone has to accept. But then I’m sure Visa’s lawyers looked at this and figured that no-cash policies are either OK or that they’re going to get away with this – with the old saw that this is a new technology and so it is exempt from old laws.

      • rex says:

        “This note is legal tender for all debts, public and private” Geez, what’s so hard to understand? Sez so- right on my Federal Reserve Note. Why would I want to patronize a business that refuses to follow the rules? I’m please to report that I haven’t used a Visa card in many years. rx

      • Valuationguy says:

        I read an article long ago which indicated that the term legal tender is actually in specific reference to gov’t taxation…..not general transactions….which might include barter (which is by no means an approved ‘legal tender’). The U.S. gov’t requires that its taxes be paid in the various approved ‘legal tender’ forms….U.S. dollars or issued currency (or gold).

        For example….you are NOT allowed to pay your taxes in Euros….a bank would need to convert them to U.S. dollars first.

  14. Cynic says:

    Quite recently I walked out of three businesses in the space of an hour who couldn’t handle my transaction because their systems were down and they couldn’t -or wouldn’t – even handle the cash I proferred. .

    How to render an economy fragile, vulnerable, and just plain old dumb. And feed the vultures.

    Curious to note how Germany still does very well with cash and checks in a very traditional banking system.

    • Petunia says:

      I was held hostage at a Chili’s some months ago when their computer went down. Couldn’t pay with cash or credit. Luckily the computer came back up within 10 or 15 minutes, but what are customers suppose to do if it doesn’t. If you walk out you are stealing and if you don’t have a bill they won’t take the cash. All I know is the staff was totally at a loss and didn’t know how to handle the situation.

      I also had the same experience in a museum gift shop a couple of months ago, at least there after 15 minutes, they started accepting cash payments.

      I also have had the experience of being in more than one natural disaster, hurricanes and floods. If you don’t have cash, you won’t eat or travel. The whole country is dysfunctional enough, we don’t have to make it worse.

      • Petunia says:

        P. S.

        I was also stuck trying to exit a mall parking garage. There was only credit or debit accepted and I anticipated paying cash. If my millennial hadn’t been with me I would probably have been arrested for exiting without paying! This is getting ridiculous and I see some big lawsuits coming.

      • TJ Martin says:

        What are the customers supposed to do ?

        Take the CC only Bull( ___ ) by the horns and take your business elsewhere thats what ! And in regards to Chili’s .. you’d be doing your overall health a favor as well if you did .

  15. am says:

    Cash isn’t the only thing they’re focused on putting out of business. Visa had $4.46 billion in revenue in Q1 2017 (up 25% YOY). Has anybody stopped to think about what exactly this company does? They facilitate electronic funds transfers using Visa-branded payment products. That must be hard work, facilitating all those Visa-branded electronic funds transfers.

    I understand that in 1958, when Visa was founded, this was a novel idea. But in 2017 this is called rent seeking. Imagine how many salaries could be paid instead of credit card fees. Small businesses pay the biggest fees to accept credit cards, it’s a massive expense for them.

    • Petunia says:

      The major credit cards make a lot of money off poor people. It’s not on the credit cards but on the debit cards. Many low paying jobs put wages on a debit card that charges a fee every time you use it. Get money out of the ATM pay a fee usually at least $1, buy anything and you pay the fee. This is one of the ways the banking system keeps poor people poor. The workers don’t even have the choice of getting a check. One of the biggest fast food places was doing this. Those of you who complain about poor people and their spending habits, please take note.

      • JB says:

        be careful when using a debit/credit card particularly when charging gas at the pumps. the vendor can put a “hold” on your available balance above the purchase price. You won’t have use of this “hold” minus the charged amount until the transaction clears.

      • Petunia says:

        Also if you pay your mega landlord with a credit card on their web portal they charge an extra $30 to $50 on top of the rent. The gouging continues.

        • prepalaw says:

          I am a landlord and accept cash and checks (until one goes bad). I will accept a domestic bank wire transfer (costs me nothing).

          Why would any tenant pay with a credit card and consent to a $30 or $50 surcharge. I have no problem with the surcharge – it covers credit card fees and administrative overhead to process the transaction. Those costs are not covered in the rent price.

          About 20 years ago, my 20 year old daughter took a sales job with Oracle in Manhattan. She needed a safe place to stay – a one room, 3 story walk up near 53rd and Lexington. I contacted the landlord. I prepaid 12 months of rent in advance and in cash for a 10% discount. Got a receipt and my daughter re-paid me over time. My daughter became a cracker jack sales person and moved at the end of the lease to a more expensive abode (with her boyfriend and now husband). It all worked out.

      • Marty says:

        Petunia, I think the problem is that they go to an atm or bank to get cash and the bank tacks on the fees. Whereas if they use the cards at retailers, they are no fees. I was told this by someone in retail.

        Can anyone confirm?

  16. Felix_47 says:

    With frequent flyer points on a tax deductible item that is very expensive a credit card isn’t all that bad. I used to make a 6 figure insurance payment that way. If I had a taco truck why would I even take cards? Many of my friends forced into cash businesses by divorce could not survive on credit card paymenys subject to yearly scrutiny by forensic accountants.

  17. David G LA says:

    A few years ago, airlines stopped accepting cash for booze in flight.

  18. Meme Imfurst says:

    More places have “CASH ONLY” signs.

    Visa, ain’t gona work. I smell lawsuits….. don’t you. I think the Treasury Department and such will have something to say about that.

  19. doug says:

    Can that really work? I have not seen such a sign. I am not sure how it can be legal, given what is written on my dollar bill….

    I hope that effort falls flat.

  20. nick kelly says:

    I agree with all this except for the bit about a war on checks.
    Checks? I haven’t had a check book for at least 10 years, probably closer to twenty. I use debit daily (no fees) and Visa very occasionally, but never running a balance.

    I don’t think anyone I know uses checks. I thought they had gone the way of the bank book. I vaguely recall you had to pay to have them printed.
    No war necessary, they just went extinct, almost. When I had to pay large sums other than by debit (2 or 3 times) I got a bank draft, no charge at Royal if you have an account.

    Re: cash. I’ve done some fairly big renos and I’ve often said only partly joking that you couldn’t do a reno around where I live on Vancouver Island paying OTHER than cash. An exaggeration but no one is offended by the offer. Of course you have to know who you are dealing with or have a solid referral. The last time I got turned down was for gas hot water tank and the outfit said sorry but for gas we have to pull a permit, but electric would be OK.

    • alex in san jose says:

      Nick Kelley – I am in Silicon Valley. I get a paycheck every Friday and take it to my bank where I deal with a teller face-to-face. I deal in cash whenever possible. I do have a debit card that gets a fair amount of exercise, I have to admit. I pay for things like IRS payments by check, and occasionally get money orders to send off for stuff. (Like a $5 one for a Getzen t-shirt since I just bought a Getzen trumpet.)

      My employer does tons of things by check. He has one of those big checkbooks that has a stub for every check and they pay their bills by check. Checks are alive and well here.

    • TCG says:

      I agree that checks or EFT are still used by many people I know for things like rent payments or other large transactions where cash is inconvenient. Who wants to carry piles of cash around that could be lost or stolen unless there is some financial compensation for that risk? Avoiding taxes is one motivation for cash use and people who don’t want to pay their share. See “tragedy of the commons” when this approach becomes pervasive.

      Checks have gone the way of the dodo in a typical retail setting, though. I don’t remember people using them in that setting since sometime in the 90s and in a smaller city. Cash and cards have replaced the check use there from what I’ve seen.

  21. Mike R. says:

    Interesting writeup but this VISA thing is probably much ado about nothing.

  22. Trmist says:

    Frontline did a program on called, “The Credit Card Game”. It’ a few year old informative. Here is the link,

  23. Old Farmer says:

    I run a stall at my local farmers market. It’s cash only. This is a fast paced environment with customers standing in line, and if I’m going to sell a watermelon for $2 I want to take the cash and be done in five seconds, not spend thirty seconds waiting for a connection on a phone. The down side of this is that people under the age of 25 simply do not have cash, and so they walk away without the watermelon. I still manage to sell my produce and make my few thousand bucks on a Saturday morning, but the pressure toward accepting credit is increasing all the time, and I expect that sooner or later I’ll have to concede, or else lose business.

    • TJ Martin says:

      … and you know what Old Farmer ? Even if you did offer credit card purchases knowing what that does to your profit margin especially as an independent businessman and I’m assuming family run farm .. I’d still pay you in cash anyway . FYI .. I do the same for every family or independent business I do business with … either cash or check … take your pick . Let the Credit Card companies and banks make their money off the chains and large corporations I say …

      Ahhh … but there I go again … being the horrid Responsible , Conscientious and Compassionate quasi Capitalist that I am .

      Shame on me . And I can just hear the faint sounds of Ayn Rand rolling over in her grave as I type this …..

    • RD Blakeslee says:

      Local farmers here sell independently, but perhaps even more independently than you: Off the tailgates of their pickups, on local street corners.

      We are grateful for their produce. There’s no problem with cash here.

    • Petunia says:

      The young people like Apple Pay or Samsung Pay. You simply tap your phones against each other and then press a button. It really is that simple, no card processing at all. Look into that for faster payments. They can also press their phones against any other point of sale device, that works too.

    • Wolf Richter says:

      “…few thousand bucks on a Saturday morning”

      Wow, that’s great!! I had no idea that farmers markets could generate that much revenue. We buy at our local farmers market (Fort Mason, San Francisco) quite a bit, and end up carrying a backpack with produce back home, and a lot less legal tender weighing down my pocket, but I had no idea how much a stand can generate.

      • Old Farmer says:

        A lot of money changes hands at farmers markets. Even at our little market, where prices are only half of San Francisco prices, there are half a dozen farmers who gross over $100k. Net is a very tiny part of that.

        • RD Blakeslee says:

          Please note the last sentence!

          Unless you have managed a family farm, you have no idea how little it’s possible to net after incurring the cost of production (Even some farmers don’t and they go broke).

  24. Gershon says:

    How can the oligarchy and their Republicrat water carriers steal your money unless they have full visibility into and access to all your financial assets and revenue streams?

    • Petunia says:

      The DNC and its candidate got more money from Wall St. than anybody else, get your facts straight.

      • Dogstar says:


      • Niko says:

        Thank you for stating the facts Petunia.

        Too many believe everything they hear from Mainstream media

        • Mary says:

          Fact–the new administration has not done one thing to rein in Wall St. Last year’s vow to reinstate Glass Steagall? Disappearing in the rear view mirror.

        • Petunia says:


          The house has voted to repeal Dodd Frank. That’s one thing.

      • Marty says:

        he said republicrats, meaning republicans and democrats together. ;-)

  25. TJ Martin says:

    Dear VISA

    Pardon me while I raise the international single digit salute your way as the wife cancels her personal VISA and vies with her employer to change over her business VISA to M/C .

  26. mvojy says:

    The Federal Reserve says:

    Is it legal for a business in the United States to refuse cash as a form of payment?

    Section 31 U.S.C. 5103, entitled “Legal tender,” states: “United States coins and currency [including Federal reserve notes and circulating notes of Federal reserve banks and national banks] are legal tender for all debts, public charges, taxes, and dues.”

    This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise.

    • Petunia says:

      It actually says all debts public AND private and no, nobody can legally refuse cash as payment.

    • Wolf Richter says:

      Thanks, mvojv. That clarifies it.

      • mvojy says:

        You’re welcome Wolf. We got your back. I also found this which pertains to state law:

        Although as a general rule a private business may restrict or refuse to accept cash payments, at times states will mandate that a business accept cash or limit any restrictions a business may impose on cash payments. For example, some states require that a landlord accept rent payments in cash. Many states require that a private impound lot accept cash payments by an owner seeking the release of a motor vehicle.

        When acceptance of a cash payment is required by state law, the state will often impose a penalty or other consequence on a business that refuses to accept cash. For example, in California a landlord’s refusal to accept cash payment of rent may cause the payment to be deemed excused. The failure to comply with state law subject a business to possible investigation by the state, and to possible fines for its non-compliance with the law or in some contexts even to a potential criminal penalty.

      • Richard says:

        I don’t think it does quite clarify it, Wolf. If you are a business which requires cash in advance of the service to be provided, you are correct. The vendor can simply refuse to provide the service.

        But if, as in the majority of cases, you provide the service first and then look for payment subsequently, as in the case of a restaurant, you cannot refuse cash. Not only legally sound but logical, as well. What are you going to do if the customer refuses or is unable to pay any other way than by cash, call the police? ;)

    • Petunia says:

      Once you have accepted a good or service from a seller and are not refusing to pay, you have incurred a debt. This is why they have to take the cash.

      • JB says:

        reminds me of the story about a disgruntled taxpayer that paid his bill with 2 wheelbarrows of pennies . the agency was obligated to take that payment .

  27. mvojy says:

    Will merchants really WANT consumers to only pay them in the form that COSTS them money? Visa, Amex and Mastercard don’t process transactions for free and this will eat into company/owner profit.

    • Mel says:

      There is an argument that handling physical cash costs time and effort, and the merchant is stuck with the risk of counterfeit money.
      HOWEVER, merchants I’ve talked to worry more about the cost of the rented card-terminal and the 1%-3% transaction fee.
      Also as risk to the consumer, Krebs on Security carries regular reports of theft of credit-card authenticating data. Additional billions of credit card transactions means billions more ways of getting people’s identity stolen.

  28. Bruce says:

    Of course VISA wants you to use your card everywhere. That’s how they make money. And for those of you that think that paying your bill off every month keeps them from making money…You’re wrong! Visa collects a small percentage of every single transaction that goes on their card. That fee is paid by the merchant too VISA. Guess how the merchant gets the money to pay that transaction charge? In the past, there were gas stations that charged a penny or two less per gallon if you paid cash. Any guess as to why they did that?

  29. Al C in SD says:

    Another reason that “society” will move into a cashless economy in the years to come is due to the fact that most of these young clerks today are so mathematically dumb they can’t figure out how to compute the change.
    if their system goes down they simply give you a stupid blinking stare that indicates a vacant mind, if any.
    Our schools are now so PC they are cranking out these mindless robots every year. We’re doomed!

    • Petunia says:


      But you get the opposite from some business people that think all their customers can’t add too. I’ve run across a few of those.

    • Bruce says:

      How true but apparently they all know they’re worth at least $15 per hour!!!

  30. safe as milk says:

    one issue of the cashless policy that i haven’t seen discussed is that it gives an advantage to large corporate businesses.

    1) large chains get a preferred rate on their electronic transactions.

    2) the downside of cash is that it is more susceptible to shrinkage (stealing by employees). the traditional remedy to shrinkage is for the owner or a trusted manager (family) member is always on the premises. public companies don’t have that option and often suffer shrinkage of over 5%.

    3) it’s easier to hide your revenue, if you are privately owned and take cash. it’s also easier to not pay all the sales tax that you owe. for example, most car owners know that the local garage will give them a cash discount (e.g. no tax) on small repairs. don’t try that at a sears auto center.

  31. IdahoPotato says:

    “As a service, cash is free at the point of use. When I pay you in cash, neither of us incur a fee for my settling my account with you by handing over notes or coins. Secondly, while the provision of cash as a service definitely does have costs associated with providing that service to us, the cost of that service is progressive. To put that another way, if your liquid net worth is $10,000, then it costs you little or nothing to store that wealth in cash. If, however, your liquid net worth is $1,000,000,000, it costs you an awful lot to store that wealth in physical banknotes. …

    Physical cash’s variable unit costs are progressive — the less wealth you have, the less of the systemic costs is passed onto you as a currency user. Stored-value card systems impose a cost on users and that cost is regressive — the less wealth you have, the higher the unit cost becomes.

    Smartphone, “app” and NFC/virtualisation based systems impose an even bigger cost on users due to the high up-front purchase price of a smartphone.”

    This is the crux of the matter and the reason why cash will never become obsolete.

  32. X-Pat DE says:

    [VISA] is partnering with governments ….

    It is sickening how the power of big money corporates “partnering” (bribing) governemnts to get their way.
    Isn’t that corporate fascism?
    But I fear generation snowflake is walking into this distopian nightmare with welcoming arms (and teddy bears) ….

    • Petunia says:

      Millennials expect capitalism to collapse in much the same way communism collapsed. They may have a point considering how dysfunctional the country seems to be. In the mean time, what have they got to lose, their smartphones.

  33. QQQBall says:


    I declare war on VISA!

  34. Markar says:

    Cash, for now anyway is legal tender and the law of the land. This is extortion, plain and simple. Any company that tries to impose this on me loses my business.

  35. walter map says:

    My my, how parasitic can they get?

    This is not a rhetorical question.

  36. Roman T. says:

    It’s designed “for small business restaurants, cafés, or food truck owners,” and the like.

    Hmmm, all those businesses already have a hard time and it’s very doubtful that they would further limit their customer base by doing something this stupid.

    Much more likely that those businesses are the top of the list of “too much cash passing between hands and we need better visibility and more fees from their customers”.

    The best thing for them to do is to offer a discount for cash customers. I don’t see many doing that anymore. The ones that did were put out of business by the banksters and their commercial real estate take-over. I mean small businesses as the gas stations now have two signs, one showing debit/cash and the other showing credit card price.

    There is a war on!

  37. Kf6vci says:

    German government operators (like media fee collectors) have been forcing citizens to pay with other methods. Cash is no longer “legal tender” for them!

    Want sources?

    It’s a global drive, with the most advanced extremes being visible in Sweden.

    No more bank runs. Total control over the citizen and an alternative to “chipping them” (a NWO interview with Aaron Russo:

  38. HEIDI says:

    I’m thinking “Handmaiden’s Tale” where all the women’s debit cards were shut down by the govt and they were all forced into submission. Another step forward for globalists. Ugh.

    • walter map says:

      It’s the ultimate method of social control and would make bullets and bombs obsolete. Taken to its logical conclusion, it can be made absolute and total. Only time is needed to bring the motive and the means to fullest flower.

      Rather than having a choice between a Huxleyan or Orwellian dystopia, any survivors deemed useful will surely get something combining the worst elements of both, plus several features invented by sadistic think tanks which could not have been imagined in ones darkest nightmares.

      That’s what present trends are saying, anyway.

    • Petunia says:

      If you don’t control it, you don’t “own” it.

  39. RD Blakeslee says:

    In the small town near our place, most of the transactions I observe while in line at the IGA grocery store are for cash, checks or food stamps.

    Checks are still useful for us to pay some of our farming help, to pay government bills and to use instead of electronic transfers between banks.
    A $.49 postage stamp beats a $10 bank transaction fee.

    • walter map says:

      Bank transaction fees will be competitive once the USPS has been privatized.

  40. Realist says:

    Several major banks over where I live did ditch Visa and exchanged alla cards for MasterCards because Visa did siphoon off too much in fees to suit the bankers :)

  41. Karl says:

    I visited the NoName bar in Sausalito for a beer and they do not take plastic; no cash… drink! Haven’t seen that since the nineteen seventies.

    • Wolf Richter says:

      There’s a steak place in Cow Hollow, San Francisco, that does that… and it’s not cheap. They ask you before they seat you if you’re OK with paying cash.

      Actually, I haven’t been there in a couple of years, so I’m not sure if they’re still doing it or if they’ve buckled under the digital pressures.

    • alex in san jose says:

      Karl – Cash is king in Silicon Valley. My favorite Pho place, well, any decent Pho place, is cash only and if you don’t have cash, there’s an ATM in there.

      I’ve paid for musical instruments, gotten HUGE discounts for cash (pawn shop) or gotten a decent discount by paying cash or mostly cash and part card (music store).

      Lots of places, bars, restaurants, etc., are cash only here.

      Of course, we still have corner payphones and haven’t quite figured out these things called “sidewalks” so …

      Basically we have a tiny upper crust of “high tech” people (tech jobs being only about 5% of the economy) and the vast majority of people here just getting by doing non-glamorous work, and we have a huge “internal third world”. If you want to look at the future, come here. You’ll see people with “Mad Max” bikes and trailers scrounging for scrap metal while texting to their friends on smartphones.

  42. ft says:

    I don’t like it that the cost of doing business with plastic is hidden in increased overall prices; that means I’m helping pay Visa even when I pay with cash. I’d rather see prices set as cash prices, with credit card costs added on at the end and shown on the receipt in the same way that taxes are. Fat chance.

  43. Guido says:

    I spoke to a cash and carry shop owner and he explained why he requires me to spend at least 10$ before I can use a credit card. He doesn’t even see Visa in his transactions. His transactions are handled by a third party that hooks upstream into larger corporations. Reason? All transactions need to be backed by somebody who can reimburse should the endpoint declare bankruptcy. And this guy does a lot of business, yet he has to use a third party.

    He pays about 5% and has to wait 45 days to get his money. That means he collects less and has to give up liquidity. So most transactions are cash based.

    But Visa’s actions are in line with navel gazing, dope smoking, and narcissistic attitude that defines Silicon Valley. Part of Visa is based out Foster City, CA in Bay Area.

  44. Lee says:

    And in Japan cash is king. Lots of places outside of the big cities only take cash. No cash – no food – no service.

    You can still find lots of Mom and Pop places in the big cities that will only take cash too., but on the other hand they had systems in place to be able to pay for items purchased from vending machines via smartphones a long, long time ago.

    Will be interesting to see how the place has changed in that regard since our last trip there as this time we’ll be spending much of time traveling out in the sticks.

    • Wolf Richter says:


      My impression is that credit cards are much more useful in Japan than they used to be. Supermarkets and the like now actually accept them. Rail-ticket vending machines accept them. Many restaurants accept them – which used to be like you said: no cash, no service. Even my father-in-law, who is in his 80s and is solidly entrenched in the cash culture, is now paying by credit card for all kinds of things.

      I think the internet has a lot to do with it: people have gotten used to buying things online and paying by card, and so the transitions is pretty easy.

      I don’t know about the villages … like the sushi place in a tiny fishing village we ran into. It was the only restaurant in town, where I was quite the attraction – they thought I was Schwarzenegger. And we had a blast. The whole place did, all six people in it. But forget plastic.

      So I expect to be updated when you return from the sticks in Japan.

  45. Bunbun says:

    that no man might buy or sell, save he that had the mark or the name of the beast or the number of his name.

  46. Kaleberg says:

    I know a number of small businesses that are credit / debit card only. They usually have one of those tablets with a little Square card reader on it, though they also handle NFC. They find that it saves time, cuts errors, deters criminals and helps with their accounting.

    For example, there’s a little barbecue place in town that is a one man show. He does everything. He doesn’t want to fuss with counting and stashing cash. He takes online orders and can just pull them up and charge you. It’s slide and go.

    I’ve seen a number of small wineries do this as well. They’ll sell wine at $20-$50 a bottle, so the cash could add up. They could have gone for a more conventional system, but the start up cost for a card only system is low, and it’s a complete, integrated package.

    I agree that the nearly 3% charged is pretty steep. The state and county charge another 8-9%, so they pay 11-12% off the top. I’m guessing that merchants see this as just another cost of doing business. They have to install something, and it has to take cards or they are cash only, so why not?

  47. David says:

    Terrible idea to give up cash.

    Cash is private and does not create a permanent record of a transaction.

    It gives people a way to reduce their exposure to the broader financial system.

    When you put your money into a bank, it is no longer your money. It is the bank’s money.

    Banks are hardly pillars of virtue. They are often fined, prosecuted, and investigated for fraudulent behavior. Why would anyone want to be a part of that?

    Cash is King! Long live Cash!

  48. Scotto says:

    I’m currently living in Japan, and I’ve lived here for about 20 years now. When I first arrived in 1996, most restaurants and small businesses were cash only and many of the stores offering discount merchandise only accepted cash. I watched in shock one time as a man bought 2 large office copiers and paid over $20,000 in cash on the spot!

    But over the past 20 years, businesses in Japan have been closing the gap. In the big cities, it’s getting close to the same as the U.S. But rural areas are still mostly cash (many will grudgingly “drag out” the card terminal, if you insist).

    One difference is that checks don’t really exist. Ever since I’ve been here (and people have told me it’s been true since the 1980’s) there has been instead an electronic payment system where you send money directly from your own bank account into another person’s bank account. There are sizeable fees for this service – about $5.00 USD per transaction. But typically it’s used for larger purchases/payments such as rent or paying for a year of health club fees.

    Recently, I think the problem is more a matter of extreme proliferation of payment systems. There are about 20 – 25 different electronic payment systems running. Many are trying to leverage existing systems (ie. you can use your “rechargeable” train ticket card to buy a drink at a vending machine) while others are more focused on specific niches (ie. payment systems just for concert tickets or for online shopping). Some of these have various levels of “clearance” going on with each layer taking a cut from the transaction. For certain venues, going “cashless” is kind of a hip, trendy way of making customers feel part of a special group or “modern” – waving your smart phone over a terminal to pay is the height of coolness! One minor side effect is payment system confusion – convenience stores such as 7-Eleven now have not only a giant tangle of terminals around the cash register, but also a separate ATM-like computer terminal which handles cash-to-electronic payments for a dozen other systems (such as the concert ticket system mentioned above).

    Two other things stand out in Japan. 1) Debit cards are almost useless at retail terminals (they work OK in ATM machines). Even ones that are part of the Visa or Mastercard system often have compatibility problems due to the banks refusal to allow certain types of interoperability and data sharing. 2) People don’t seem to mind paying fees – even multiple levels of fees, but cash is still very popular due to tradition. A lot of people even arrange to have their utility bills (gas, water, electricity, phone) paid via automatic electronic transfer even though each one costs a transfer fee – just for the convenience.

    I suspect cash popularity will very slowly erode as convenience wins out (eventually) over tradition. Especially as online purchases continue to grow and pull business away from brick-and-mortar stores (off to a slow start in Japan so far, but growing rapidly). Digital retail items such as music, games, apps and online artifacts (ring-tones, avatars, toys, decorations, themes, animated characters) seem to be leading the way in digital transactions and starting to change the “feeling” about cash.

    Just my 2 yen from the Land of the Rising Sun,


    • Wolf Richter says:


      Thanks for the confirmation. My scattered observations on this, especially how I see my in-laws evolve, tells me that your prediction — “cash popularity will very slowly erode as convenience wins out (eventually) over tradition” — is likely to be correct.

  49. Will says:

    16″And he causes all, the small and the great, and the rich and the poor, and the free men and the slaves, to be given a mark on their right hand or on their forehead, 17and he provides that no one will be able to buy or to sell, except the one who has the mark, either the name of the beast or the number of his name.” -No surprise here. It’s inevitable. It will happen as sure as the sun rises…

  50. AG says:

    I haven’t read all the comments, but from those I read and your excellent article, I believe something even more important is lurking. The assumption is that the credit card companies simply want that 1 to 3% service charge they get from vendors. And that it’s those charges that make up most of the profit from the credit card companies. I thought so until this week!

    That’s when I had reason to look carefully at some of the interest and fees they charge. I noticed a new one that made no sense and I actually called them. I found out it’s now common practice by Wells Fargo and BofA to add interest on PURCHASES! Which means that every purchase becomes essentially a loan. WF’s charge for me is 20.25%; BofA is 12%. Compounded daily.

    I always assumed that if you paid your bills on time, you were only charged interest on past due amounts. Not any more! If you don’t
    keep your balance due at $0, then for the next few months or so you pay interest on every purchase. If, for instance, you have a $1,000 balance due, and pay them $950, then you’ll be paying interest for every purchase for the next few months. It has to be at $0 balance due for a few months.

    And we all know that c.c. companies always had exorbitant late fees. If you owed $100 total, but were a day late, you get a late of $35 from BofA. Along with 20% for any cash advances or 17% for check cash advances.

    The cashless society is a nice name for the bank loan shark society. They already make pawn shops look like a good deal. Of course they want us all addicted to plastic! With so many already paying the minimum due, and others paying less than the balance due, I expect my c.c. bills from them to have a logo reading “Guess who’s your daddy now.”

  51. Nathan Redshield says:

    I am one of those mean people who while he tries to charge anything over $5 at most ALWAYS pays the credit card in full each month. I don’t do debit cards because that’s the same as cash; so I play the float because in 1991 I had to; long story. Back in the early 1980’s I travelled on Amtrak a lot and the delays in their billing system meant I got an effective 2% discount; those were the days. But I need to point out a further need for cash courtesy of my girlfriend’s daughter’s in-laws from Quebec: the 1997 Quebec ice storm. The power grid was out for three weeks; so were the ATM’s. Fortunately the in-laws had a winterized cottage over the border and fled to that once the roads were clear. Ever since I’ve had some “ice money” around for emergencies. Hey, I report my cash earnings; I’m honest and I’d rather pay Trump tax money than Hillary.

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