Are we ready for a 'cashless' society ?

[Ali Gator]

A short while ago, I read an article in USA TODAY about how we are fast approaching a 'cashless' society.  TARGET stopped taking checks for a form of payment on July 15 of this year, and they say the customers who complained the most were Boomers and GenXers. Many stores went 'cashless' during the pandemic, when they believed cutting back on the exchange of paper money and coins would somehow protect customers and employees from spreading germs (though the handling of merchandise between employees and customers seemed perfectly fine). They favored method of payment among the younger generations (Millennials and Zoomers) are Credit Cards, Debit Cards, and electronic pay phone apps (such as Zelle, Venmo, PayPal, etc.).

 

This morning on NPR, they discussed this in their 'marketwatch' report. They agreed the younger generation - especially the Zoomers - have moved away from cash, and pay with credit cards (not even debit cards) and phone apps (quite often linked to a cc). A few of the 'commentators' suggested the rise in credit card usage by Zoomers is why that generation has 'the highest amount of low credit scores, as well has highest amount of credit card defaults (missing / late on at least two payments). According to the NPR report, more than 25% of Zoomers aged 18-30 are in default of their credit card payments. Millennials were slightly lower (but not by much) while Boomers and Xers were more in the 10% and below range when it came to credit card defaults. 

It's an interesting snapshot of the economy, and how we go about paying for items. Thoughts ? 

[+ DynamicUno]

I can't believe GenXers are complaining in significant numbers about Target not accepting checks. I stopped writing checks years ago and don't know anyone in my age group who hasn't switched to other payment methods.  

Checks are not the same as cash, however.  Retailers certainly don't consider checks as good as cash, they are the riskiest payment method.

I still see customers paying with cash, but less frequently since retail prices have soared in recent years.  It's less convenient to pay with cash when getting a few things at the supermarket now routinely exceeds $100.  People have to remember to hit the ATM more frequently before shopping and using a debit or credit card is perceived as more convenient.

As for Zoomers having worse credit than older cohorts, that's easily attributed to many of them having less consistent incomes and lower paying jobs (i.e. shiftwork or gigwork) since many are still getting established. They're using credit cards the same way older people used "float" years ago, deferring payments until they have been paid, and sometimes finding themselves short when the bills are due. Also splitting a restaurant tab is less hassle when everyone can settle up using Venmo than pooling cash and trying to make change when almost everyone has 20s and no smaller bills.

In short, cash usage has declined as even small trips to the store are more expensive, but I don't see it going away any time soon. Generational trends are more attributable to where people are at economically, and their comfort level with newer payment methods.  Checks will become a niche reserved for mostly business payments and slowly disappear as the boomers shuffle off the mortal coil.

 

[+ DERRIK]

I love paying with Apple watch 

 

[+ Vegas_Millennial]

10 hours ago, Ali Gator said:

A short while ago, I read an article in USA TODAY about how we are fast approaching a 'cashless' society.  TARGET stopped taking checks for a form of payment on July 15 of this year, and they say the customers who complained the most were Boomers and GenXers. Many stores went 'cashless' during the pandemic, when they believed cutting back on the exchange of paper money and coins would somehow protect customers and employees from spreading germs (though the handling of merchandise between employees and customers seemed perfectly fine). They favored method of payment among the younger generations (Millennials and Zoomers) are Credit Cards, Debit Cards, and electronic pay phone apps (such as Zelle, Venmo, PayPal, etc.).

 

This morning on NPR, they discussed this in their 'marketwatch' report. They agreed the younger generation - especially the Zoomers - have moved away from cash, and pay with credit cards (not even debit cards) and phone apps (quite often linked to a cc). A few of the 'commentators' suggested the rise in credit card usage by Zoomers is why that generation has 'the highest amount of low credit scores, as well has highest amount of credit card defaults (missing / late on at least two payments). According to the NPR report, more than 25% of Zoomers aged 18-30 are in default of their credit card payments. Millennials were slightly lower (but not by much) while Boomers and Xers were more in the 10% and below range when it came to credit card defaults. 

It's an interesting snapshot of the economy, and how we go about paying for items. Thoughts ? 

It was thought we would be a cashless society with the invention of checks.

Retailers not accepting checks is a sign that within a half century retailers will not be accepting digital payment applications.

Cash is king. 

The poor use cash. 

The poor are susceptible to bank fees to cash their paychecks or to use their government assistant payments.  More and more businesses are reverting away from credit cards, charging customers a fee for payments other than cash.

In New York State, a recent law makes it illegal for any business to not accept cash.

Edited September 18, 2024 by Vegas_Millennial

[Ali Gator]

Quote

In New York State, a recent law makes it illegal for any business to not accept cash.

I thought I heard/read  that most vendors at sports stadiums in NY and other states no longer accept cash. I wonder if they're exempt ?

 

[BuffaloKyle]

28 minutes ago, Ali Gator said:

I thought I heard/read  that most vendors at sports stadiums in NY and other states no longer accept cash. I wonder if they're exempt ?

 

They don't accept cash at the sports stadiums by me but I just googled to see this law and I did read that they can have a machine on site to convert cash into a card to use at vendors. I did see that machine at the Triple A ballpark here and at the County Fair this summer.

[+ PhileasFogg]

I’ve not used cash for decades.  In the pandemic, I stock piled about $4,000 cash in my safe and didn’t visit an ATM for nearly 4 years.

there is one more recent evolution of cashless society I like.   Now when I park my car at en event, they read my license plate and charge based on my exit time.   No more cramming quarters and dollar bills in that little slot on the kiosk. 

Edited September 19, 2024 by PhileasFogg

[mike carey]

20 minutes ago, PhileasFogg said:

I’ve not used cash for decades.  In the pandemic, I stock piled about $4,000 cash in my safe and didn’t visit an ATM for nearly 4 years.

there is one more recent evolution of cashless society I like.   Now when I park my car at en event, they read my license plate and charge based on my exit time.   No more cramming quarters and dollar bills in that little slot on the kiosk. 

I use cash irregularly and I'm quite happy to use electronic means of payment. I resented the surcharges some businesses apply but I've since accepted it is what it is (even though they suck up the cost of handling cash). Charging them is illegal here if they don't accept cash, but it seems not to be enforced. The regulators are looking at banning them.

Several years ago the airport here installed gates where you could insert your card on arrival and the same one on departure and they charged for the elapsed time, and most shopping centres seem to scan your number plate, then you type it into the machine to get your exit ticket. Helps if you can remember your registration number. I'm happy with those developments. One of my credit cards sends a message to their app on my phone whenever I pay something with it. It's still kind of mind blowing if I pay $3 for parking my phone beeps straight away to tell me I've done it.

[+ PhileasFogg]

1 hour ago, mike carey said:

. One of my credit cards sends a message to their app on my phone whenever I pay something with it. It's still kind of mind blowing if I pay $3 for parking my phone beeps straight away to tell me I've done it.

If you enjoy that, awesome.   I set mine to a minimum threshold so it’s a backstop to my card being compromised (which has only happened once in 20 yrs). 

[pubic_assistance]

On 9/17/2024 at 10:12 PM, Ali Gator said:

the younger generation - especially the Zoomers - have moved away from cash, and pay with credit cards (not even debit cards) and phone apps

I have a friend who's 28. He claims he hasn't touched cash for years. He pays virtually everything with his phone. Doesn't even carry a wallet with credit cards. If a place doesn't accept his phone app, he just walks away and goes somewhere else.

[marylander1940]

When it comes to escorting cash is (still) King!

Untaxable and untraceable!

Back to subject: I know many guys under 30 who never even owned a check let alone using one.

 

 

[+ Vegas_Millennial]

8 hours ago, pubic_assistance said:

I have a friend who's 28. He claims he hasn't touched cash for years. He pays virtually everything with his phone. Doesn't even carry a wallet with credit cards. If a place doesn't accept his phone app, he just walks away and goes somewhere else.

I do the same but I'm reverse. 

If a business does not accept cash, I walk away and find a business that does.  But first I offer them cash, so they know why they are losing my business.  The only exception is travel which I must pay for in advance (airline, hotel, and cruise reservations).

[BSR]

On 9/18/2024 at 5:57 AM, Vegas_Millennial said:

The poor use cash. 

The poor are susceptible to bank fees to cash their paychecks or to use their government assistant payments.  More and more businesses are reverting away from credit cards, charging customers a fee for payments other than cash.

In New York State, a recent law makes it illegal for any business to not accept cash.

I wonder if requiring businesses to accept cash should be a federal issue because all currency is US legal tender.

I agree that the trend to a cashless society discriminates against the poor.  The poor have it tough enough as it is.  I hate seeing anything, like not accepting cash, that makes things even harder for them.

[+ DynamicUno]

27 minutes ago, BSR said:

I wonder if requiring businesses to accept cash should be a federal issue because all currency is US legal tender.

I agree that the trend to a cashless society discriminates against the poor.  The poor have it tough enough as it is.  I hate seeing anything, like not accepting cash, that makes things even harder for them.

There's another side to the cashless trend that also penalizes lower income people who don't have access to banking.  Many employers have adopted payroll systems that issue debit cards for employees that don't have a banking account for direct deposit.  The debit cards usually have high transaction fees and prevent the holder from taking the cash out in a lump sum.  It's one step removed from using company store scrip.

There's other challenges that unbanked people face, but forcing poor people to pay fees to access money they've earned is immoral and should be illegal.

[+ PhileasFogg]

3 hours ago, DynamicUno said:

There's another side to the cashless trend that also penalizes lower income people who don't have access to banking.  Many employers have adopted payroll systems that issue debit cards for employees that don't have a banking account for direct deposit.  The debit cards usually have high transaction fees and prevent the holder from taking the cash out in a lump sum.  It's one step removed from using company store scrip.

There's other challenges that unbanked people face, but forcing poor people to pay fees to access money they've earned is immoral and should be illegal.

I am very familiar with reloading debit cards as a method of paying employees. I am not familiar with situations where there would be any ongoing fees different from an ordinary debit card.    In fact, I think it’s much cheaper than maintaining a low balance checking account and prevents accidental overdraft fees. 

[Ali Gator]

Quote

I resented the surcharges some businesses apply but I've since accepted it is what it is 

And this is called 'double dipping' which is illegal. 

 

These businesses are writing off their cc fees at the end of the year when they do their taxes (taking a deduction on the net sales) yet they are also recovering those fees from the surcharges on the purchases (and not including them on their net sales).  TOTALLY ILLEGAL. Why aren't the feds paying attention to this ? 

[mike carey]

16 minutes ago, Ali Gator said:

And this is called 'double dipping' which is illegal. 

 

These businesses are writing off their cc fees at the end of the year when they do their taxes (taking a deduction on the net sales) yet they are also recovering those fees from the surcharges on the purchases (and not including them on their net sales).  TOTALLY ILLEGAL. Why aren't the feds paying attention to this ? 

Mainly because I was talking about Australia and the 'feds' here aren't doing anything because it's completely legal if the business also accepts cash. At present, at least. As I noted later in the same paragraph, the regulators (the competition and consumer commission or the reserve bank) are considering banning it.

[SoCalBaseball]

On 9/19/2024 at 10:09 PM, PhileasFogg said:

I am very familiar with reloading debit cards as a method of paying employees. I am not familiar with situations where there would be any ongoing fees different from an ordinary debit card.    In fact, I think it’s much cheaper than maintaining a low balance checking account and prevents accidental overdraft fees. 

I will try that. Thanks for the idea

[+ Vegas_Millennial]

As of today, my pest control company will start charging more to accept credit cards.  I will begin paying him by cash each month when he visits.

[Kevin Slater]

4 hours ago, Vegas_Millennial said:

As of today, my pest control company will start charging more to accept credit cards.  I will begin paying him by cash each month when he visits.

My Fidelity Visa gives me 2% back on every purchase, so I'm ok with fees as long as they're not over that.  I put a ~10k charge four times a year to pay property taxes for which the city charges me 2%, so it's a breakeven. (Or technically slightly in my favor as I get 2% of that 2%-- a whopping $4!-- refunded to me.). Also, as this is a business expense (rental properties), I believe I'm correct in that I get to deduct the processing fee yet don't have to claim the cashback.  (Hey, I don't write the rules.)

Kevin Slater

[BuffaloKyle]

11 minutes ago, Kevin Slater said:

 I believe I'm correct in that I get to deduct the processing fee yet don't have to claim the cashback.  (Hey, I don't write the rules.)

I never even thought of cashback as being income that you have to claim so I looked it up and found this:

https://www.bankrate.com/credit-cards/rewards/credit-card-rewards-count-taxable-income/

In most cases, credit card rewards are not taxable — which means you won’t owe any surprise taxes on the rewards you’ve earned. When credit card issuers offer rewards for making purchases, the IRS considers the rewards to be a form of rebate on the purchases. Thus, the cost of the purchase is reduced and the rewards are not considered taxable income.

This is akin to a store offering you a $10 mail-in rebate after you purchase a $100 toaster. The rebate is not considered income to you — it just helps make the product more affordable and drives sales for the business.

Edited January 4 by BuffaloKyle

[+ JamesB]

Credit card cash back rewards are not considered income and are therefore non taxable. However, it's important to keep in mind that any deductible expense paid with the credit card can only be deducted for the amount of the expense minus the cash back received.

[+ Vegas_Millennial]

13 hours ago, Kevin Slater said:

Also, as this is a business expense (rental properties), I believe I'm correct in that I get to deduct the processing fee yet don't have to claim the cashback.

I believe you are supposed to deduct the cash back from your business expense deduction.

[+ sniper]

I generally tip waitstaff in cash and also use cash at small local businesses like my comic shop, where I know it's making a difference to the owner. (Seriously, that character Stuart from the Big Bang Theory was not an inaccurate representation of these guys' financial position...). 

[+ Charlie]

I regularly go to the bank and get a supply of $5 and $10 bills, because it is the most reasonable way to pay my dog-walker (the daughter of one of my neighbors), who walks my dog while I am playing tennis. She charges $10 per walk, but I often don't know what my schedule will be until the day before the match, so I leave the bill for her in an envelope on my hall table (she has a key to my house, so she can pick up and return the dog). There are also many times when I give a small tip to someone for providing some kind of service, and I can't imagine handing the person (for example, a worker at the car wash) a credit card or a check. I have entered the 21st century enough to pay a lot of my regular bills directly from my bank account online, but I can't imagine never having cash on hand when I need it. I don't go as far as my late partner, who never left the house without a bunch of coins in his pants or jacket pocket.