Payment Choice - Not Everybody's Cup of Tea?

I started scribing this article on July the 4th, so it is perhaps natural that my British mind turned to tea.

However, my own brain had no room for thoughts about Boston.

No. My Gray Matter was focused on a Street Cafe near to the UK Payment Systems Regulators (PSR) palatial offices in Stratford, London.

There I was, readying myself for a meeting with the CEO of the PSR – and badly in need of an invigorating beverage. I noticed a humble Street Cafe, a tea-bags throw from the PSR HQ and soon found myself at the counter, cheerfully ordering a strong black tea.

My cheerfulness soon evaporated - and the tea might as well have done the same - when my proffered £10 Note was refused. Not because it wasn’t enough - London isn’t THAT expensive - but due to the fact the said Street Cafe did not accept cash.

I told the member of staff to deliver the cup of tea to their company boss (when he recovers from what was obviously a significant head knock) and left with my £10 note intact. Sadly, my temper was not in the same happy state.

I have to say that this has never happened to me before in London - but others tell me it is becoming a quite a frequent occurrence.

Let me be very clear of my view of this apparently increasing trend of restaurants and shops refusing cash for in-person payments.

IT IS A TOTAL DISGRACE.

Cash has been a Payment Choice for the public everywhere, stretching back 2500 years. In all that time, no leader of any nation, however otherwise misguided, has openly sought to remove cash from the Payment Choice Menu, yet we are now supposed to allow cafe owners the right to dictate how the public pay?

NOT WHILE I DRAW BREATH.

Of course such “entrepreneurs” have been emboldened by the public pronouncements – and, in some cases, financial backing – of some very significant Corporations

Here is a memorable statement by such a Corporation, made in 2017

“We are declaring war on cash,” Visa spokesman Andy Gerlt proudly proclaimed after the program was announced.

The program in question was one where Visa pays restaurants in the United States $10,000, providing they agree to refuse to accept cash.

I doubt my cafe owner in London had received Visa’s largesse. He almost certainly decided to betray the public interest all on his own.

Fortunately, in some countries at least, action is already in progress to halt the theft of Payment Choice from the long-suffering public.

In China, home of the payment Beasts from the East, Alipay and WeChat, the Peoples National Bank decided last year that they had seen quite enough of businesses starting to refuse cash. This very wise Central Bank told the restaurants and shops in question that they had just one month to correct the error of their ways “or they would be punished”.

Unsurprisingly perhaps, “cashless” signs are now nowhere to be seen in China.

Now I think of it, time for a little detour.

One of my targets this year is to remove the ludicrous word “cashless” from the payment lexicon.

No one with a brain larger than an amoebas would ever call a cash payment “cardless”, so why allow the anti-cash brigade to make “cashless” a badge of what they tout as success?

LET’S RIDICULE THIS WORD – IT THOROUGHLY DESERVES SUCH TREATMENT!

Anyway, now that is off my chest, let’s get back on track and examine what is happening outside China in terms of ensuring cash remains on the Payment Choice Menu.

Interestingly, although the US and China may disagree on thorny issues such as Trade Tariffs, American politicians seem to share the Chinese Central Banks views of cash being refused by businesses.

In California, New Jersey, Detroit and Philadelphia, to name just four States, laws have been passed, or are in the process of being passed, which ban shops and restaurants from refusing to accept cash.

Better still, a Democrat politician is proposing that there should be a Federal Law to ensure cash is accepted for in-person purchases in all 50 States of the Union.

I am pressing very hard for similar legislation in all 50 European countries.

What’s absolutely certain is that Legal Tender, as currently defined on the Bank of England website, is totally useless as a tool to protect the public interest.

Here is what the Bank of England says

“Legal tender has a very narrow and technical meaning, which relates to settling debts. It means that if you are in debt to someone then you can’t be sued for non-payment if you offer full payment of your debt in legal tender.”

So, in plain English, if your local shop allows you to run up a bill which you settle each month, if you offer cash as payment and the shopkeeper refuses to accept it, the shopkeeper cannot sue you for non-payment of your bill.

However, if you walk into the same shop and offer cash for a can of Coke, the shopkeeper can refuse to accept your payment and keep his Coke.

The genius who created this definition of Legal Tender must have been on the other kind of Coke at the time….

I have exchanged letters with Mark Carney, Governor of the Bank of England, asking that the Bank review this definition. Mark tells me it up to the politicians in the UK to make such a change.

Unfortunately, UK politicians are a little pre-occupied with a tiny thing called Brexit at the moment, so I have pointed out to Governor Carney that a strong recommendation from the Mother of all Central Banks could play a key role in getting the government to focus on this crucial issue.

Given Mark Carneys reported ambitions to head-up the International Monetary Fund, it would be timely to see him show leadership in ensuring cash remains a viable Payment Choice in the UK. This would also almost certainly encourage other major European nations to take the same vital step.

What happens when the public enjoys perfect Payment Choice?

In this fortnight of Wimbledon tennis, it is perhaps appropriate to look no further than the birthplace of Roger Federer for our answer.

Here’s what the Swiss National Bank said last year

“The results [of our survey] indicate the well-functioning coexistence of cash and cashless payment methods, as well as a high level of satisfaction with existing payment options on the part of households.”

SNB, Press Release, 31 May 2018

I like this statement so much that I will not criticize their use of the word “cashless”!

Essentially, what the Swiss National Bank are saying is that the Swiss public have perfect Payment Choice.

In this climate of Payment Choice nirvana, would you hazard a guess as to what percentage of payments the Swiss public make using cash?

A very cool – it’s all those mountains – 70%!

As King Roger himself might say - Game, Set & Match to cash!

 But only where, as in Switzerland, the public have perfect Payment Choice.

Over to you, Mark Carney. Time to serve up a new definition of Legal Tender so that the UK publics Love Match with cash can continue - and Payment Choice is safeguarded forever.