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Philadelphia may mandate cash acceptance at stores

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Established Contributor

Philadelphia may mandate cash acceptance at stores

Video of news program talking about the proposed law: https://www.youtube.com/watch?v=dPOgllKRFwU

 

Personally, I'm not sure this is the right solution. Cutting down on the number of unbanked (such as providing free accounts with debit cards, among other measures) seems like it'd fix the concerns that triggered cash mandates in the first place. On the other hand, if the number of unbanked isn't likely to go down much any time soon...

 

Also, I'm not sure about anyone else but I don't really run into all that many merchants around here that don't take cash. If anything, I suspect many prefer that people don't pay with cards, even if they don't surcharge or take other overt steps to discourage their use.

Message 1 of 12
11 REPLIES 11
Super Contributor

Re: Philadelphia may mandate cash acceptance at stores

Many thanks to the OP for his article.

 

The article below provides a helpful counterbalance to the many prevailing articles about how bad CC swipe fees are, and how we need to return to the halcyon days of cash:

 

https://hbr.org/2014/06/the-hidden-costs-of-cash

 

Not claiming that they have it completely right, but it's a helpful and different perspective.

Message 2 of 12
Contributor

Re: Philadelphia may mandate cash acceptance at stores

I would not say that the article neccesary states we need to return to those days, specially indicating how much the poor suffer because of cash (Ironicallly) or Mom and Pop stores, I doubt that relying completely in cash would help very much to the second group, to the first group, maybe 

Message 3 of 12
Moderator Emeritus

Re: Philadelphia may mandate cash acceptance at stores

I suspect a lot of the economy and potentially society would be better if cash simply went away.

 

I worked near the PDL (pay day loan) space, and the fees are exorbitant compared to even banks that get plenty of grief here on these forums.

 

Really what I want is full and egalitarian access to the banking system: pick what the regulatory standards are, maybe this is one area we do need a government sponsored agency since the market doesn't seem to be sorting it out: a bank, no fees, for a basic checking account and debit card and that's it.  Oh you can take an external ACH off it too.

 

Really the required storefronts are a problem, buy Western Union or one of the similar ubitquitous cash transfer places as a sunk cost and then see if the interest keeps up with the property taxes frankly.  Chase it from the other side too, mandate direct deposit for everyone, get it sorted.

 

There'd be some classes of crime that just are gone; some of the worse elements of the black market / shadow economy, gone too: agreed it's necessary in some countries for basic access to stuff, but that's not here.  Hell it'd probably come close to winning the "War on Drugs" overnight if cash were no longer legal tender, much illegal immigration would be gone and maybe, just maybe, we could get real immigration reform then.   We'd have to push more money into shelters as the homeless would have to come in at that point and heck at that point how much further would the money cities are spending on the homeless actually be more effective as now they're in a specific known place and you can help them directly; I don't fully know, there's a bunch of unintended consequences and it'd be a giant Charlie Foxtrot so there'd need to be a long transition time (possibly 1-2 decades even) and I'm just spitballing here but ultimately there is no right to use cash, it's just a current legal tender.

 

Sure it means everyone would have to put more trust in the Fourth Amendement, but there are a ton of places where getting people into the system would help.

 




        
Message 4 of 12
Frequent Contributor

Re: Philadelphia may mandate cash acceptance at stores


@Revelate wrote:

Really what I want is full and egalitarian access to the banking system: pick what the regulatory standards are, maybe this is one area we do need a government sponsored agency since the market doesn't seem to be sorting it out: a bank, no fees, for a basic checking account and debit card and that's it.  Oh you can take an external ACH off it too.

 

Really the required storefronts are a problem, buy Western Union or one of the similar ubitquitous cash transfer places as a sunk cost and then see if the interest keeps up with the property taxes frankly.  Chase it from the other side too, mandate direct deposit for everyone, get it sorted.


Postal banking has been proposed as a similar solution to your proposition.

 

See this TEDx talk by law professor Mehrsa Baradaran: https://www.youtube.com/watch?v=VYdNKMkBYuQ

 

Post offices have much of the infrastructure in place already and the post office system is really underutilized in proportion to the investment in infrastructure (due to the rise of email and the corresponding decline in letter mail, of course).

 

I think it's a great idea to help the unbanked become banked as our society moves towards a cashless one.

Message 5 of 12
Moderator Emeritus

Re: Philadelphia may mandate cash acceptance at stores


@beutiful5678 wrote:

@Revelate wrote:

Really what I want is full and egalitarian access to the banking system: pick what the regulatory standards are, maybe this is one area we do need a government sponsored agency since the market doesn't seem to be sorting it out: a bank, no fees, for a basic checking account and debit card and that's it.  Oh you can take an external ACH off it too.

 

Really the required storefronts are a problem, buy Western Union or one of the similar ubitquitous cash transfer places as a sunk cost and then see if the interest keeps up with the property taxes frankly.  Chase it from the other side too, mandate direct deposit for everyone, get it sorted.


Postal banking has been proposed as a similar solution to your proposition.

 

See this TEDx talk by law professor Mehrsa Baradaran: https://www.youtube.com/watch?v=VYdNKMkBYuQ

 

Post offices have much of the infrastructure in place already and the post office system is really underutilized in proportion to the investment in infrastructure (due to the rise of email and the corresponding decline in letter mail, of course).

 

I think it's a great idea to help the unbanked become banked as our society moves towards a cashless one.


Thanks for that link!  I hadn't known 10% of income was being lost in fees for the unbanked and I've worked near the PDL space previously so I understood most of the economics of that presentation.

 

Post office does have some advantages: ton of locations in pretty much everywhere you want to go, doesn't have the stigma of buying up the PDL storefronts or whatever from a distribution perspective... though would need different security and connectivity model than the existing Post office: it would be an interesting exercise to math out.

 

Sadly it would require a massive amount of capital to go do or it wouldn't be a bad thing to go chase, I can't think of any cheaper way to do it as you probably need a metric ton of real estate to say nothing of the regulatory hurdles... easy checkmark in that "benefit to humanity" box though.

 

ETA: Further thoughts, you are probably right it would need a public sector solution.

 

If we get to a cashless society AND we reduce the fees AND access to smart phones is getting cheaper along with improving wireless connectivity over the next decade: what do we need physical storefronts for?  That may be why it hasn't been solved in the market: would have to be something like a real estate play... which actually, would be a long game but if you reduced the cost of banking how does that not increase the access to capital and not move all the current underbanked neighborhoods to a somewhat higher peg on the economic ladder toward middle class, and property values would increase commeasurately.

 

Meh, if I had a few billion dollars laying around I'd really consider trying it - decent chance it might all get blown but given money shouldn't be sitting around doing nothing and if one did this instead of giving it to charity or a foundation (none of which appear to even be addressing this problem) at least it would help if by nothing else promoting a healthier economy and social equality if it got any traction at all... and this could be done right now, nothing to invent just buy a bank and therefore it's license and go.

 

I really need to do something else with my life, so many problems and I'm not doing a damned thing to fix any of them =/.

 

 




        
Message 6 of 12
Frequent Contributor

Re: Philadelphia may mandate cash acceptance at stores


@Revelate wrote:

If we get to a cashless society AND we reduce the fees AND access to smart phones is getting cheaper along with improving wireless connectivity over the next decade: what do we need physical storefronts for?...

 

Meh, if I had a few billion dollars laying around...


I think there will always be some people who are just not comfortable going totally digital - for them, having a bank account with a debit card is just on the cusp of their comfort level. My dad for example, his bank account for many years was just a conduit to cashing his paycheck, he dealt mostly in cash even after acquiescing and getting a debit card, but he would never, ever use direct deposit. He didn't trust it. Every other Friday meant a trip to the credit union to deposit his paycheck and take out cash. I think this mindset is common among low income earners, especially those that don't like math (and therefore would never keep a check ledger or a budget). When you're poor and/or bad at math, budgeting is easier with cash - your budget is basically the cash in your pocket - I think the physicality of it just makes it easier for some people.

 

I, too, would love a billion dollars with which to effectuate social change, haha.

Message 7 of 12
Senior Contributor

Re: Philadelphia may mandate cash acceptance at stores


@beutiful5678 wrote:

@Revelate wrote:

Really what I want is full and egalitarian access to the banking system: pick what the regulatory standards are, maybe this is one area we do need a government sponsored agency since the market doesn't seem to be sorting it out: a bank, no fees, for a basic checking account and debit card and that's it.  Oh you can take an external ACH off it too.

 

Really the required storefronts are a problem, buy Western Union or one of the similar ubitquitous cash transfer places as a sunk cost and then see if the interest keeps up with the property taxes frankly.  Chase it from the other side too, mandate direct deposit for everyone, get it sorted.


Postal banking has been proposed as a similar solution to your proposition.

 

See this TEDx talk by law professor Mehrsa Baradaran: https://www.youtube.com/watch?v=VYdNKMkBYuQ

 

Post offices have much of the infrastructure in place already and the post office system is really underutilized in proportion to the investment in infrastructure (due to the rise of email and the corresponding decline in letter mail, of course).

 

I think it's a great idea to help the unbanked become banked as our society moves towards a cashless one.


From personal (professional) knowledge I will add that Postal banking was an idea floated for a few years but dropped out of USPS interest in 2017. This proposal is no longer being considered by either the USPS or legislative solutions.  Personally, I thought it was a good idea, but the USPS is no longer considering "banking". 

Message 8 of 12
Contributor

Re: Philadelphia may mandate cash acceptance at stores

Strange that anyone is enthusiastic about losing cash when negative interest is now standard central bank policy. Money will disappear from your account every day, and you can never withdraw it. Did you really ever get paid for working? But people turned in their gold for paper, and the working class has been in decline ever since, so I guess they will accept anything

Message 9 of 12
Senior Contributor

Re: Philadelphia may mandate cash acceptance at stores


@fuzzle wrote:

Strange that anyone is enthusiastic about losing cash when negative interest is now standard central bank policy. Money will disappear from your account every day, and you can never withdraw it. Did you really ever get paid for working? But people turned in their gold for paper, and the working class has been in decline ever since, so I guess they will accept anything

********

 

I'm not aware the the United States Federal Reserve ever used "negative interest" as a counter measure. Negative central bank interest rates has been used in Europe and parts of Asia, but not that recently and generally has been considered a failure as far as controling national economies - not too hot not too cold is the attempted balancing act. 

 

This link will offer an overview: https://www.thestreet.com/story/14492328/1/how-negative-interest-rates-work.html

 

I'm starting to feel that conspiracy theory and politics are creeping into this thread which really has nothing to do with the thread subject IMO.  


 

Message 10 of 12
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