As anyone who’s been reading this blog knows, I’m a big fan of making purchases with cash. You can read my opinion on this on another article where it comes down to the fact that every transaction is now traceable. I object to the idea of anyone having a ‘digital diary’ of where i am every time I make a transaction. But there’s another reason to keep using cash I didn’t really think of which I’ve outlined below:
This is a point I saw made on a post on facebook. I clicked on the post to read it but then my phone refreshed and I now can’t find the post. I saw enough of the post to think to myself “this guy/girl is onto something”. The point this person made was every time you pay for something via the credit card or eftpos network you (or the merchant) are charged a fee. On a ten dollar purhase its something like $0.20c for the transaction.
It tall adds up
It doesn’t sound like much, but let’s say you buy a meal for two for $100 or something that means you’ve probably lost $2-3.00 in transaction fees. This goes to the bank. Then that resterant pays a server $100 he or she takes that $100 and buys a tank of petrol or something and again looses the same $2-3.00 in transaction fees. then that $100 goes on to the next service provider so every time this $100 changes hands the banks cash in a couple of percent. If the $100 changes hands 50 times the entire value of that $100 has been made again by banks for providing a service that lest be honest, costs them f–k all.*
If you pay cash the banks make nothing on that transaction. Thats why it’s no so hard to find an ATM here in Australia. It forces people to either pay electronically or via the Eftpos or credit card network. Most of which it will make money on, or another bank will make money on. Either way it either diminishes the purchasing power of the $100 purchases outlined above or it provides the banks with easy money for what is really just an electronic impulse transferring data across a network.
* I should point out that cash also costs bigger retailers as they need to pay security companies to come take the cash of premises, count it and deposit it. So for the purposes of this discussion it probably applies more to person to person or small business transactions. That’s still a lot of transactions that we should be making in cash!
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