17 January 2018
Elizabeth Lumley
Elizabeth Lumley

Elizabeth Lumley

Elizabeth Lumley - Girl, Disrupted

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Finance 2.0

Finance 2.0

A community for discussing the application of Web 2.0 technologies to financial services.

Adventures in cash...less?

04 December 2012  |  5724 views  |  2

In New York, in the early 1990s, there was a spate of serial robberies where muggers specifically targeted young Puerto Rican bus boys walking home late at night (or early morning) after a shift at a restaurant.

Why, you ask? Why did the Gotham thieves target bus boys - as opposed to mailmen or trash collectors or late night revellers or any other array of men and women who might be walking alone in the wee hours in a major metropolitan city?

The answer is cash. Bus boys, walking in their highly recognisable white kitchen scrubs, would probably be pocketing a sizable wad of cash - their share of the nightly tips, which any ethically sound waitress or waiter would have shared out with the support staff.

It got to the point where the NY police department advised many restaurants to instruct their bus boys to change into civilian clothes before walking home.

I often think of those vulnerable boys - with $60 in their trousers lit up like a neon sign reading: Get it here, boys - whenever I'm faced with a demand to take large amounts of cash out of an ATM. (which happens far too often for my liking)

Never mind that I have to pay my son's after school care, in cash, on a weekly basis. This happened two weeks ago:

On my way home from picking up my son from a birthday party, my husband texted me to ask 'if I wouldn't mind stopping by a cash point to take out £600 (!) so he could pay our builders'. (We're having extensive work done on our house at the moment and it's taking a fair amount of Homeland marathons and bottles of Casillero del Diablo to keep me sane.)

Now, although I am no delicate flower, walking home in South London, in the dark, with a child, and £600 in cash - did not fill me with a sense of ease. (I plan on showing our builders the iZettle UK launch videos, very soon).

Many banks, consultancies and providers, stress the importance of 'customer demands' and 'changing customer behaviour'. Now, that's all well and good - but if the merchant, or tradesmen or after school club based in a South London church basement, only accepts cash - your desire for mobile, or contactless, or stickers or whatever is pretty meaningless.

It's not just large cash payments that have been bugging me. My husband has been on at me for weeks to write about the local pub near his work. The pub has a clearly marked contactless-enabled POS terminal at the bar - but refuses to let him buy a pint with his card because "the minimum spend is £5, mate". (my husband is a cheap date)

Just last week, my husband had four black cabs, all with card terminals visible in the back seat, drive off on him because he mentioned he planned to pay with a card. (he wasn't even asking to go south of the river!)

The key to changing payments behaviour does not lie with customers - it lies at the point of sale. Merchants need to be a bigger part of the process through education and favourable monetary incentives.

So, my questions are this:

  • When have you *had* to pay by cash when you really didn't want to?
  • Have you ever *walked* away from a purchase because the merchant would only accept cash? (a purchase that had consequences like, your bathroom remained un-tiled, your child was left to roam free in the wilds of Lewisham, you walked to the train station with heavy bags etc...?)
  • How many times have you seen small, independent traders, taxis, or tradesmen accept card (or mobile) payments? 

No need to send answers on a postcard...comments are allowed below :-)


Comments: (4)

Elizabeth Lumley
Elizabeth Lumley - Girl, Disrupted - Crayford | 04 December, 2012, 16:25

I had put the link to this blog up on my Facebook page and my best friend responded. She is not only my best friend, but manages a Shaws supermarket in Massachusetts (and in doing so deals with Moneygram, the tills, payroll etc...) Here is her response:

Kimberly Smith Since I am not a member of finextra, I am not able to comment on the blog..but here is my perspective.

It is surprising to me the number of people who still only deal in cash. We offer a payroll check cashing to our customers. They pay a $1.00 fee for us to cash it for them(btw far cheaper than any bank would). They in turn buy money orders to pay any bills that have to be mailed.(another $1.00 charge to them for each mo). These people do not have bank accounts. they feel that they are "under the radar" by not having a bank account or debit card. I think they are all still stuffing their mattresses. These people are leaving the store with some times over $1000.00 in cash on them. It amazes me. Who are they hiding from?

I personally have had my debit card compromised. They were able to take over $800. out of my account in just a few hours. Who money is safer? Mine was protected by my bank and was returned, but not after a lot of forms and leg work by me. I know the rest of the world has better safeguards to protect plastic users. But I was still robbed. I very rarely have cash on me. That is my choice. If I have it on me, I am more apt to spend it quicker on those not really needed items that I am limited to use only cash on. I think no matter the situation we are putting ourselves out there. 

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A Finextra member
A Finextra member | 05 December, 2012, 10:26

Of course paying your builder in cash as opposed to a bank transfer possibly (probably?) means they are evading paying tax thereby increasing the tax demands for the rest of us.

How do you feel about that?

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Elizabeth Lumley
Elizabeth Lumley - Girl, Disrupted - Crayford | 05 December, 2012, 10:33

...or London taxis that refuse to accept cards, hmm? But we're not accusing anyone of anything unless there's proof. (My bathroom still needs to be tiled)

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 06 December, 2012, 15:57

You've hit the nail on the head. I always have a good laugh when SQUARE-and-Clone fans wax eloquent about how they can pay their babysitters, plumbers, et al by credit cards - as though these "merchants" were just waiting on the technology so that they could ditch cash.

Talking about taxis, you pay a cabbie by cash, he gets the money immediately. You pay him by credit card, a 1-on-1 transaction gets corporatized, goes through bureaucracy at the taxi dispatch company, takes 2-3 days before it reaches the cabbie and, when it does, there's a deduction applied on the amount on account of MDF. At the same time, the daily fee that the cabbie owes to the dispatch company is still due in cash and by the end of each day. Which cabbie in his right mind would accept card payments as readily as cash? Under the prevailing business model, I don't blame them. This has nothing to do with payment methods.

Having said that, it's quite possible that tax avoidance, misconception, old habits, etc. could explain why some other businesses like daycare or plumbers tend to refuse cards.

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Global FinTech commentator. Author of the Girl, Disrupted blog

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