Australian (ASX) Stock Market Forum

Cashless society

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Value Hunter said:
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.
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That jogged a memory. Way back in 2019.

www.itnews.com.au

Coles taps off Visa debit in transaction network tussle

Sends contactless debit down Eftpos Payments Australia pipes instead.
www.itnews.com.au www.itnews.com.au
 
JohnDe said:
And don’t forget the cost of fraud -

How big is credit card fraud in Australia?​

A record 1.8 million Australians saw $2.2bn of their savings spent or withdrawn after their credit card details were stolen across the 2022-23 financial year.​

Loading...

www.news.com.au
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Indeed fraud is huge although you won't hear Value Collector speaking about this massive cost associated with digital payments. Fraud with cash (e.g. counterfeit money, etc) is very rare.
 
One thing Value Collector doesn't want to acknowledge is that by definition there must be at least one fee free payment option otherwise the advertised price is considered false and misleading advertising because its not in fact actually possible to purchase it at that price. Given that is the case if consumers are charged for using cash then digital payments would have to be free. Why should digital payments be free to the consumer instead of cash when digital payments clearly have a cost also?
 
Value Hunter said:
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."
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John De has blocked me, so I didn’t see his post. But, Tender time is higher for cash some instances take Tolls for example, cash booths require stopping, cashless you just drive through.

—————————

On another topic, I noticed a KFC drive thru tonight that is now cashless, it shows big business that are weighing up the real costs, are moving cashless where they can.

IMG_2568.jpeg
 
Value Hunter said:
Indeed fraud is huge although you won't hear Value Collector speaking about this massive cost associated with digital payments. Fraud with cash (e.g. counterfeit money, etc) is very rare.
Click to expand...
Fraud with cash also includes the out right theft of it, and not to mention other common scams like “oh no, I paid with a $50 and you gave me change for a $20.
 
Value Hunter said:
One thing Value Collector doesn't want to acknowledge is that by definition there must be at least one fee free payment option otherwise the advertised price is considered false and misleading advertising because its not in fact actually possible to purchase it at that price. Given that is the case if consumers are charged for using cash then digital payments would have to be free. Why should digital payments be free to the consumer instead of cash when digital payments clearly have a cost also?
Click to expand...
In my opinion all payment options should be part of the cost of doing business, and be free. But if you decide to charge for one, why should the other be free.

Cash transactions are only generally free because the business is leaning on subsidised services while also not valuing their personal time, that the real costs for are not flowing to them.

Eg. A small business person might sneer at the thought of paying $5 in credit card fees, because they can walk down to the bank and deposit cash and save the $5, but businesses that actually have to pay a market rate for labour lean towards cashless, because they know the real costs of dealing with cash.
 
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IMG_5872.jpeg

Not entirely true. VC blocked me ages ago because I proved him wrong in another one of his rants and he didn’t like it, and he blocked me. Recently he decided to unblock me without the courtesy of notifying me, or apologising for the unnecessary block.

So I continue the favour for him.

If he wants to be involved in the real world an apology, or at least acknowledgement of rudeness, will be enough to start over.
 
Value Hunter said:
Great, then lets make all payment options free. Unfortunately I cannot see that happening in reality.
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They already are at most places, it’s only really small businesses that charge to use cards.

Most big businesses allow you to use cards for free, because they know the small percentage cost of processing those transactions digitally is less than the cost they pay to process cash eg staff labour counting tills, armed guards picking up deposits and delivering floats etc etc.
 
Value Collector said:
They already are at most places, it’s only really small businesses that charge to use cards.

Most big businesses allow you to use cards for free, because they know the small percentage cost of processing those transactions digitally is less than the cost they pay to process cash eg staff labour counting tills, armed guards picking up deposits and delivering floats etc etc.
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Any thoughts on way Aldi then charge for credit card use in their stores, well it is here at our local, which we don't patronise.
Not exactly a Mum and Dad small business.
 
farmerge said:
Any thoughts on way Aldi then charge for credit card use in their stores, well it is here at our local, which we don't patronise.
Not exactly a Mum and Dad small business.
Click to expand...

There's a crucial factor to consider: the costs of processing cash in businesses like Aldi are high but largely fixed, such as armed guards, totaling around say $1,000 per week (as a minimum) regardless of cash volume. This creates an interesting dynamic. When cash transactions are high, it makes sense to incentivize even more cash payments, as each additional transaction doesn't incur extra costs beyond the fixed $1,000, while saving 0.5% in fees. Conversely, if cash transactions are low, but fixed costs remain high, businesses may implement strategies to shift transactions to lower-cost digital payments, optimizing their cost structure.

So Aldi preferring cash might be a legacy situation due to the choices they made years ago, and how they have trained their customers to act.

It may change over time, if they switch their preferences one way or the other and decide to push digital.
 
farmerge said:
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.
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that wasn't the one i was talking about but i had one of them as well ( it soon got over-full and the excess went into pockets )

the other one was like a funnel with multiple ends

you just put all the coins on the table and sweep them in and the coins were sorted by size ( and value ) as they fell down the slope
 
Value Collector said:
John De has blocked me, so I didn’t see his post. But, Tender time is higher for cash some instances take Tolls for example, cash booths require stopping, cashless you just drive through.

—————————

On another topic, I noticed a KFC drive thru tonight that is now cashless, it shows big business that are weighing up the real costs, are moving cashless where they can.

View attachment 183443
Click to expand...
AWESOME , am not a KFC fan .. one more reason to go elsewhere ( there is usually 3 or 4 fast food outlets in a cluster )
 
divs4ever said:
AWESOME , am not a KFC fan .. one more reason to go elsewhere ( there is usually 3 or 4 fast food outlets in a cluster )
Click to expand...
I think it’s just the drive thru that’s cashless, but I am not sure.

If it’s a choice between paying high fixed costs for cash handling or missing out on ok me or two sales a week I think they will choose to miss the one or two sales.

With people moving more and more away from cash I think it’s the cash only businesses that are at risk of losing business.
 
Value Collector said:
There's a crucial factor to consider: the costs of processing cash in businesses like Aldi are high but largely fixed, such as armed guards, totaling around say $1,000 per week (as a minimum) regardless of cash volume. This creates an interesting dynamic. When cash transactions are high, it makes sense to incentivize even more cash payments, as each additional transaction doesn't incur extra costs beyond the fixed $1,000, while saving 0.5% in fees. Conversely, if cash transactions are low, but fixed costs remain high, businesses may implement strategies to shift transactions to lower-cost digital payments, optimizing their cost structure.

So Aldi preferring cash might be a legacy situation due to the choices they made years ago, and how they have trained their customers to act.

It may change over time, if they switch their preferences one way or the other and decide to push digital.
Click to expand...
She Who is Never Wrong at my insistence did this week's shopping at the local Aldi. Well, though and behold all but one that she saw were using a myriad of cards to pay for their purchases with.
She, of course used cash.
Aldi just collecting that little bit extra because they can.
The sheep of the world will one day wake up to this fact.
 
farmerge said:
She Who is Never Wrong at my insistence did this week's shopping at the local Aldi. Well, though and behold all but one that she saw were using a myriad of cards to pay for their purchases with.
She, of course used cash.
Aldi just collecting that little bit extra because they can.
The sheep of the world will one day wake up to this fact.
Click to expand...
.
Even with Aldi’s 0.50% fee, it still makes sense for me to use my card, because it pays me 3% in benefits and saves me a trip to an ATM.

But, yeah because some people use cash at Aldi, they want to get as many others to use it to, because as I said their cash costs are fixed largely.

However at some point the scale tips and businesses try to get rid of some of those high cash processing costs, and then they will want to do the opposite and discourage cash. Fees on cash would be unpopular so sometimes a total move to cashless happens
 
farmerge said:
She Who is Never Wrong at my insistence did this week's shopping at the local Aldi. Well, though and behold all but one that she saw were using a myriad of cards to pay for their purchases with.
She, of course used cash.
Aldi just collecting that little bit extra because they can.
The sheep of the world will one day wake up to this fact.
Click to expand...

The thing about sheep is that they don’t know what they are, they bleap all the way to the slaughter.
 

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