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Business owners and cash

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Legal businesses want electronic payments. No two ways about it.

Well, the gauntlet was well and truly thrown down on Twitter. There was a Twitter exchange (I don’t really want to label these enjoyable interludes “discussions”, but I can’t think of a better word) on the back on Jim Marous’ post on the use of cash in the USA, triggered by the Federal Reserve study on same. I wrote a guest post for Jim to build on his comments about this study, but in the course of the Twitter exchange I happened to see this from an interested member of the general public.

I can do better than that “ben_katz” — is Jonathan at work today 🙂 — I can point to several business owners who say that they would prefer electronic payments to cash. (Yes, I’ll admit, these are the honest ones, but I don’t think it should be core social policy to reduce transaction costs for criminals.) Last week, the Jeremy Vine show on BBC Radio 2 had an interesting phone-in segment on cash. They had a taxi driver complaining about cash and lauding contactless and mobile solutions, a sandwich shop owner talking about the problems of managing cash float (and change) and someone complaining about parking machines. They were all challenging the assumption that the inertia around cash means an insurmountable barrier to change. It does not. The honest retailers also want it to vanish in favour of more efficient electronic alternatives.

I’m a retail manager. Please, please, please, for the love of god, let cash die already. It’s expensive to store, sort, count, and transport. It goes missing. It falls apart. It sticks together. It slows down the checkout process.

[From Paper Or Plastic: How Americans Buy Stuff, In 1 Graph : Planet Money : NPR]

This plea by itself would merit comment here, but what particularly fascinated me was the manager’s subsequent comment about power and fallback, which we have discussed here before. In that particular shop, I imagine that the POS terminals are handheld devices with rechargeable batteries.

And losing power and/or communications does NOT stop us from accepting cards. It will, however, prevent our CASH registers from operating in a secure and audit able fashion.

[From Paper Or Plastic: How Americans Buy Stuff, In 1 Graph : Planet Money : NPR]

And if the POS terminals run out of juice after a few hours, then the store manager could just use a Square or an iZettle and get on with things. Note, however, the manager’s emphasis on the final point: auditable. Getting rid of notes and coins and replacing them with electronic payments has implications for retailers beyond the cost savings of cash handling and paying taxes in a fair market is one of them that we all accept.

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