Small Payments are Big Business

There is a growing trend of using credit cards in place of cash. This is surprising given the fees and usability for credit cards for small payments.

Many of us know that using credit cards online or in retail businesses is a poor experience and the experience is only getting worse. Do you swipe or use the chip? Do you have to sign? Is the security risk worth it? Can I trust this site with my financial information to complete this transaction? Why am I being charged 50 cents for using a credit card?

Seems like a lot of hassle when I just want to buy a bottle of water.

Now some large restaurant chains have signs saying they don’t accept cash.

Critics have noted that the practice also excludes the unbanked….

But wait, how is this even allowed? Doesn’t the dollar bill say it’s “legal tender for all debts, public and private”? The Federal Reserve’s website says that notwithstanding that language, there is no federal law compelling a business “to accept currency or coins as payment for goods or services.”

Do you notice in this article that your currency isn’t worth anything (except as a vehicle to enrich the bankers)? “How dare you hand me money! Now insert your card so Uncle Goldman gets their cut.”

Small payments are the new front in The War on Cash.

The real reason for this war on cash–start with the big bills and then work your way down–is an ugly power grab by Big Government. People will have less privacy: Electronic commerce makes it easier for Big Brother to see what we’re doing, thereby making it simpler to bar activities it doesn’t like…

A growing trend is the small business that charges extra for using a credit card on purchases under $10. The credit card companies are charging their flat rate, generally ~3%, plus an additional fee for charges under $10. On a $10 sale those fees can consume all the profit a small business may make on that credit card transaction, especially on loss leaders in retail, so small businesses are forced to pass a credit card fee along to the consumer. Those poor bankers families need to eat after all.

report from the New York State Comptroller said Monday that the average Wall Street salary rose by 13% in 2017 to $422,500, the highest compensation since 2008. Much of that boost in take-home pay came from bonuses, which rose 17% last year to $184,000 on average, which was also the highest in a decade.

Why do credit cards charge those fees? The short answer: because they can. The longer answer is the fees are there to offset fraudulent charges. The even longer answer is the banks are charging 3% every time you use your credit card as a hedge against those fiscally responsible users who aren’t fleeced monthly for carrying a balance. Pay me now or pay me later. Could you imagine if you could get 15%+ interest on your checking account? Well, 15% is a competitive rate for carrying a balance on credit cards! Hmmm, maybe we’re starting to see how Wall Street affords those salaries.

Reminds me of this scene from Goodfellas (link not safe for work environments). Paulie is the bank.

Banks would love for everyone to use credit cards so they can collect fees for moving bits of data around on their databases. The centralized banking system benefits the financial elite at the expense of everyone else.

A decentralized system of money benefits all participants.

And that’s where there is an opportunity for us. Small payments are big business and banks want those charges (and fees) on their cards.

Here’s what found when it polled 674 holders of credit cards last month about their preferred payment method for in-person purchases of $5 or less:
Credit cards: 17 percent (up from 11 percent since last year)
Cash: 55 percent (down by 3 percent)
Debit cards: 24 percent (down by 3 percent)

Credit cards up. Cash and debit cards down. See the trend? Cash is a dinosaur and banks want to be the meteor.

Counter to the banking system for less than a penny in fees Bitcoin Cash users can send payments instantly to anyone anywhere. This is an ideal solution for online commerce and works great for retail businesses. Verification can be instant, funds are not reversible and fees are near zero. Plus, once you’ve sent a payment using Bitcoin Cash you learn it’s easier and faster than a credit card. Win/Win.

Quick example: imagine the cost of your favorite record if you could exclude the record company and pay the artist directly. The cost of the album is likely cut by more than 50% and the artist would receive a bigger check. The artist wins and you win. The loser: the middle man record company which provides the lowest value and charges the highest fee.

Now, imagine a world where payments are based on Bitcoin Cash. There are numerous services for BCH.

A NFC wallet called Handcash that is great for retail or person to person transactions.

Money Button for online transactions (used on this website). Simply create a Money Button account and then use the button slider to support this website.

Several other Point of Sale systems are available including which I tested personally:

The services above running on BCH are nearly free to use and very fast. Advantage: Bitcoin Cash.

And like clockwork we have the CNBC counter indicator to verify our thesis. CNBC is reliable for providing info that is the opposite of what you should do.

17 percent of people have used their cards to buy something that costs less than $5, up from 11 percent from last year, according to a new survey from of 1,001 adults

The increase can be tied to the rise of cards that give perks for high monthly spending.

Yes, I’m sure those perks are truly free. We aren’t paying for them with our 3% fees and 15% interest charges at all!

There is a better way. We are early in this cycle but rest assured peer to peer cash will grow. Here’s what you can do today to speed things along.

  1. Help a friend install a BCH wallet and send them a couple bucks. Having someone experience Bitcoin goes a lot further than trying to explain Bitcoin.
  2. Next time you want to show appreciation for a person or service or donate to a fundraiser or buy an item from a merchant ask them to accept Bitcoin Cash.
  3. Use (and replace) your Bitcoin Cash. Bitcoin is NOT a store of value.

Imagine a world that is not based on a financial system taking 3% on nearly every purchase or charging 15+% for carrying debt. This system has caused numerous crises and is poised to impact everyone once again as interest rates rise and debt levels again reach a tipping point. Do you want to be in the banking system when it needs another bailout?

The only reason we accept this scenario is that it’s the status quo. If you had a choice, would you choose a system where you pay 3% for the privilege of using your money? No. But you were never given that choice.

Well, make a choice now.

For Bitcoin to flourish it must become cash. The easiest place to start is with small payments. Let’s take back our financial sovereignty one coffee at a time.

About coinspeak

20 years as an IT consultant. Escaped the rat race in 2015. Addicted to travel and tacos.

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