Cashless society

[JohnDe]

A few years old but still a lot of good information here - PAYMENT COSTS IN AUSTRALIA

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2. Measuring Costs​

2.1 Cost concepts​

Measuring the costs associated with making payments is far from straightforward. There are many different cost concepts, and participants in the payments system face significant challenges in accurately identifying all the costs associated with a payment, and allocating costs across the various payment methods.​

The main resource cost directly incurred by consumers is the cost of their time to make payments. Consumers also incur charges by financial institutions (and in some cases merchants) for payment services.... Of these various time costs, the easiest to measure is tender time – the time spent at the check-out while the payment is being processed. The estimates below draw on the tender times discussed in Section 4.1, which showed that the fastest processing times are for cash payments, followed by EFTPOS, credit cards and cheques.




Resource link - https://www.rba.gov.au/payments-and.../paymts-sys-rev-conf/2007/7-payment-costs.pdf

 

[Value Hunter]

A few years old but still a lot of good information here - PAYMENT COSTS IN AUSTRALIA

​

2. Measuring Costs​

2.1 Cost concepts​

Measuring the costs associated with making payments is far from straightforward. There are many different cost concepts, and participants in the payments system face significant challenges in accurately identifying all the costs associated with a payment, and allocating costs across the various payment methods.​

View attachment 183348

The main resource cost directly incurred by consumers is the cost of their time to make payments. Consumers also incur charges by financial institutions (and in some cases merchants) for payment services.... Of these various time costs, the easiest to measure is tender time – the time spent at the check-out while the payment is being processed. The estimates below draw on the tender times discussed in Section 4.1, which showed that the fastest processing times are for cash payments, followed by EFTPOS, credit cards and cheques.



View attachment 183350
Resource link - https://www.rba.gov.au/payments-and.../paymts-sys-rev-conf/2007/7-payment-costs.pdf

The issue I take with this is that tender time is only a theoretical cost its not an actual cash cost to consumers (or businesses).

 

[JohnDe]

A few years old but still a lot of good information here - PAYMENT COSTS IN AUSTRALIA

​

2. Measuring Costs​

2.1 Cost concepts​

Measuring the costs associated with making payments is far from straightforward. There are many different cost concepts, and participants in the payments system face significant challenges in accurately identifying all the costs associated with a payment, and allocating costs across the various payment methods.​

View attachment 183348

The main resource cost directly incurred by consumers is the cost of their time to make payments. Consumers also incur charges by financial institutions (and in some cases merchants) for payment services.... Of these various time costs, the easiest to measure is tender time – the time spent at the check-out while the payment is being processed. The estimates below draw on the tender times discussed in Section 4.1, which showed that the fastest processing times are for cash payments, followed by EFTPOS, credit cards and cheques.



View attachment 183350
Resource link - https://www.rba.gov.au/payments-and.../paymts-sys-rev-conf/2007/7-payment-costs.pdf

I was thinking about the 'main resource cost directly incurred by consumers is the cost of their time to make payments', and now with phone & watch swipe payments that they may be faster than cash. But then I remembered all the recent and current issues with the electronic payment system - eftpos facility downtime, power blackouts, hacking, etc.

 

[macca]

I was thinking about the 'main resource cost directly incurred by consumers is the cost of their time to make payments', and now with phone & watch swipe payments that they may be faster than cash. But then I remembered all the recent and current issues with the electronic payment system - eftpos facility downtime, power blackouts, hacking, etc.

Well I do know that in the time it takes for many people to delve into their handbag, find their purse, think about which card to use, scan it once or twice (or three times), wait for the online processing to occur, enter their pin when necessary, ask for a receipt.......................

By paying cash I would have been out the door and halfway to my car by now.

Payment time by card is often measured in minutes, payment time by cash is measured in seconds.

 

[farmerge]

Well I do know that in the time it takes for many people to delve into their handbag, find their purse, think about which card to use, scan it once or twice (or three times), wait for the online processing to occur, enter their pin when necessary, ask for a receipt.......................

By paying cash I would have been out the door and halfway to my car by now.

Payment time by card is often measured in minutes, payment time by cash is measured in seconds.

And to add to the card payment system.
How many times do you see people saying try this card , this one it might have enough on it to pay the bill.

 

[divs4ever]

I was assuming if you are buying a girl or boy an engagement ring, that you are yet officially married.

a surprise gift .... i definitely prefer cash for that ( i don't like the recipient to understand how cheap/generous i have been )

if forced to withdraw from a bank account i normally bundle the withdrawal with several other upcoming expenditures

 

[Value Collector]

And to add to the card payment system.
How many times do you see people saying try this card , this one it might have enough on it to pay the bill.

Those people probably don’t have cash either.

 

[Value Collector]

Well I do know that in the time it takes for many people to delve into their handbag, find their purse, think about which card to use, scan it once or twice (or three times), wait for the online processing to occur, enter their pin when necessary, ask for a receipt.......................

By paying cash I would have been out the door and halfway to my car by now.

Payment time by card is often measured in minutes, payment time by cash is measured in seconds.

Mate, I bet it takes less time to tap my phone than it does for you to get your change, at to that time the time it took you to go out of your way to an ATM, to get the cash in the first place.

Sure some people fumble with cards etc, but people also stand there counting out coins.

 

[Value Collector]

The issue I take with this is that tender time is only a theoretical cost its not an actual cash cost to consumers (or businesses).

You don’t think Woolies having armed guards a few times a week picking up cash and delivering change to all their stores is a real cost?

You don’t think banks having to count all their cash at the end of each day is a real cost?

 

[divs4ever]

You don’t think Woolies having armed guards a few times a week picking up cash and delivering change to all their stores is a real cost?

You don’t think banks having to count all their cash at the end of each day is a real cost?

i had a coin counting device ( no moving parts ) to count my coins on the paper rounds back in 1965

if a freaking paper boy can afford to do it back then .. the bankers are over-paid snowflakes

( yes i had 5 paper rounds at the time .. it was a great investment )

 

[macca]

Mate, I bet it takes less time to tap my phone than it does for you to get your change, at to that time the time it took you to go out of your way to an ATM, to get the cash in the first place.

Sure some people fumble with cards etc, but people also stand there counting out coins.

You obviously shop in different places to me, I am talking about what happens at our local supermarkets on a Very regular basis

 

[Value Hunter]

You don’t think Woolies having armed guards a few times a week picking up cash and delivering change to all their stores is a real cost?

You don’t think banks having to count all their cash at the end of each day is a real cost?

I never said that. Those are obviously real costs. I just pointed out that tender time is not a real cost.

 

[farmerge]

i had a coin counting device ( no moving parts ) to count my coins on the paper rounds back in 1965

if a freaking paper boy can afford to do it back then .. the bankers are over-paid snowflakes

( yes i had 5 paper rounds at the time .. it was a great investment )

When I had my paper selling spot on the cnr of Walcott and Beaufort Streets in the early 60s I also had one of those gizmos that held coins of all denominations. A very handy bit of kit.

 

[Value Collector]

You obviously shop in different places to me, I am talking about what happens at our local supermarkets on a Very regular basis

Where I shop there is always cash people lining up waiting for the checkout that accepts cash, only 2 of them do. So is people that use cards are constantly being waved through.

I know this especially because the wife sold some stuff on market place a few times, and I always try to get rid of the cash at Cole’s, but it takes about 6 tries because there is always a line for the cash checkout, so I end just paying with card.

 

[Value Collector]

I never said that. Those are obviously real costs. I just pointed out that tender time is not a real cost.

Counting cash at the end of the day, making trips to bank it, organising floats etc etc are real costs also. Mum and pop shops can absorb them normally by just working more hours so it doesn’t feel real it just lowers their actual hourly rate. But stores that have to employ staff to carry out the tasks definitely feel it. That why you are more likely to have a small business tack on a credit card fee than a big business.

 

[Value Hunter]

Counting cash at the end of the day, making trips to bank it, organising floats etc etc are real costs also. Mum and pop shops can absorb them normally by just working more hours so it doesn’t feel real it just lowers their actual hourly rate. But stores that have to employ staff to carry out the tasks definitely feel it. That why you are more likely to have a small business tack on a credit card fee than a big business.

But that is not what tender time is. "tender time" just means the actual time you are making the transaction at the till not anything else. You are moving the goal posts once again. In that report it was designed to measure the cost to consumers by counting the number of seconds they are waiting at the will. As a consumer waiting for 10 seconds at the till is not a real cost to you.

 

[Value Hunter]

I always try to get rid of the cash at Cole’s

Why not use the cash at small businesses? Usually small businesses charge a fee for credit cards whereas Coles doesn't. So next time you go to a local coffee shop or local small bakery or butcher etc you can pay with cash and avoid the fee.

 

[Value Collector]

Why not use the cash at small businesses? Usually small businesses charge a fee for credit cards whereas Coles doesn't. So next time you go to a local coffee shop or local small bakery or butcher etc you can pay with cash and avoid the fee.

Probably a good idea, but my wallet doesn’t even have a coin pocket (that’s how much I avoid cash), so I just end up throwing any extra cash that comes my way into the bag that I carry my reusable shopping bags in and take it to Cole’s.

Also, I tend to learn which small businesses charge a fee and avoid them in possible, for example I have a choice of 3 sushi shops in my area, 1 charges a fee, so I attend the other two. 1 kebab shop charges a fee but 3 don’t, etc etc

You have to be really good, or have no competition if you want to be a regular place for me and charge a fee.

 

[Value Collector]

But that is not what tender time is. "tender time" just means the actual time you are making the transaction at the till not anything else. You are moving the goal posts once again. In that report it was designed to measure the cost to consumers by counting the number of seconds they are waiting at the will. As a consumer waiting for 10 seconds at the till is not a real cost to you.

Ok, but I don’t think anyone is really saying tender time is the issue.

 

[Value Hunter]

Ok, but I don’t think anyone is really saying tender time is the issue.

You are wrong again. The whole reason I made that statement because in the RBA report refered to in JohnDe's post actually flags tender time as the biggest cost. Go and look at the figures in the table. According to the RBA tender time is the issue. Which I don't agree with hence my previous statement.

I have bolded the important part below:

"2. Measuring Costs
2.1 Cost concepts
Measuring the costs associated with making payments is far from straightforward. There are many different cost concepts, and participants in the payments system face significant challenges in accurately identifying all the costs associated with a payment, and allocating costs across the various payment methods.

The main resource cost directly incurred by consumers is the cost of their time to make payments. Consumers also incur charges by financial institutions (and in some cases merchants) for payment services.... Of these various time costs, the easiest to measure is tender time – the time spent at the check-out while the payment is being processed. The estimates below draw on the tender times discussed in Section 4.1, which showed that the fastest processing times are for cash payments, followed by EFTPOS, credit cards and cheques."