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In Urban China, Cash Is Rapidly Becoming Obsolete

nytimes.com

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Re: In Urban China, Cash Is Rapidly Becoming Obsolete

#231

Post by muninn_ »

michaelmrose wrote: post #118
abalone wrote: post #56

Earlier quoted context omitted.

> the transaction fee, for many, is perceived as a rip off Only if you're a merchant. Most of the 2-3% fee is transferred to consumers via reward programs. It's important to understand that merchants and consumers face different incentives and that US card networks have aligned themselves with consumers.

The merchant is charging more to cover the fees. THEN the user often gets 1% or less back in rewards that are both less flexible and less useful than more cash in your pocket.

1% or more is a better phrase. Add to that, if the merchant is charging higher fees then you would have to get everybody to collectively stop using credit cards at the same time, or otherwise every time you use cash you're paying extra on your purchase.

Re: In Urban China, Cash Is Rapidly Becoming Obsolete

#232

Post by em500 »

netcan wrote: post #192
hn_throwaway_99 wrote: post #15

I think this article hit the nail on the head when it pointed out that being ahead of the curve at one time (with Japan and their advanced flip phones in the early 2000s) can make it harder to adopt the next big advance because what you have is already "good enough". Thus, in the US, I suspect that mobile payments haven't taken off as much because they are only very slightly faster to use than a credit card, as oppos…

I think you're right that this is the dynamic at play here. It is similar to the dynamic by which many regions have leapfrogged landline telephones, skipping the older more infrastructure/capital intensive version of technology. The developed economies were already mostly "cashless." Very little cash has run though most malls, hospitals, schools or even supermarkets for decades already. " We hqave something good enou…

> The developed economies were already mostly "cashless." Very little cash has run though most malls, hospitals, schools or even supermarkets for decades already.

Cash share of payments in Germany and Austria (by volume) were still >80% just a few years ago, see p.38 of https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1685.pdf

Re: In Urban China, Cash Is Rapidly Becoming Obsolete

#233

Post by lostboys67 »

muninn_ wrote: post #227
lostboys67 wrote: post #205

Earlier quoted context omitted.

So I have to have a apple phone worth several hundred dollars plus the extortionate mobile charges in the USA instead of a free credit card with tap and go I know which one I prefer

Well you could use Android if you can't afford an iPhone. There are many different options for mobile payments.

So only £150 fo a moto g then a bargain

Re: In Urban China, Cash Is Rapidly Becoming Obsolete

#234

Post by usernam »

HeavenFox wrote: post #24

Born in China and moved to U.S. since college. In my observation, there are several reason for the boom in mobile payment in China that makes it hard to replicate. - Low transaction fee & minimal barrier. For merchants taking WeChat pay, the transaction fee seems to be a flat 0.6%, compared to 2%-3% in the U.S. For the food cart vendors and similar one man shops, they just use the person-to-person payment feature (li…

In EU you have a pin and you also have to sign the receipt. In supermarkets, cards (debit or credit) queue up the checkout line.

Cash is way faster, hands down. I bothered to compare the difference once, since cards here are not the norm. We're talking between 5-10 seconds (cash register) vs 30-45 seconds, most of which are dead times (waiting for confirmation).

Re: In Urban China, Cash Is Rapidly Becoming Obsolete

#235

Post by lostboys67 »

thehardsphere wrote: post #226
lostboys67 wrote: post #202

Earlier quoted context omitted.

Why are you "proud" of removing cash going fully digital allows governments to implement negative interest rates ie steal your monney

They can implement negative interest rates with paper money also.

yes but if you hold cash they don't come and take 1% out of your wallet

Re: In Urban China, Cash Is Rapidly Becoming Obsolete

#236

Post by urethrafranklin »

muninn_ wrote: post #221
nopzor wrote: post #168

Earlier quoted context omitted.

yeah, and Walgreens will allow you to buy a 40 cent pack of gum with a credit card. They are surely losing money on that transaction. Your donut shop is losing over 30% when they let you buy a single donut for 1.50$ with your card. That's why sane merchants (often independent) will have a minimum. This isn't a NYC specific thing at all.

Where do you get this 30% number?

Typical minimum credit charge is 30 cents plus a percentage of the gross.

Re: In Urban China, Cash Is Rapidly Becoming Obsolete

#237

Post by thehardsphere »

lostboys67 wrote: post #235
thehardsphere wrote: post #226

Earlier quoted context omitted.

They can implement negative interest rates with paper money also.

yes but if you hold cash they don't come and take 1% out of your wallet

They don't need to, because they can take the 1% out of your wallet by printing more pieces of paper with dead politicians faces on it.

Re: In Urban China, Cash Is Rapidly Becoming Obsolete

#238

Post by baybal2 »

tristanj wrote: post #23

If you are curious how smartphone payments work in practice, Here's a video of someone using Wechat Pay to order squeezed-to-order orange juice from a vending machine https://www.youtube.com/watch?v=Um53J3shL7I In practice, scanning and paying is much faster than shown in the video. He is using an old phone, on a newer one scanning the barcode takes around 0.5 second and the verification takes 2-5 seconds (not 15 sec…

I want to add to that that this opens door to wholly different types of services: vending machines with no buttons to get vandalized - if zhifubao is the only payment method, it makes sense to let users to only select products on the smartphone; restaurants with no waiters - you scan QR code on your table, and make order online (quite a few of such places are out there already); and online shops that are no more than a banner or a picture of a display in a populous place

Re: In Urban China, Cash Is Rapidly Becoming Obsolete

#239

Post by uiri »

thehardsphere wrote: post #225
StreamBright wrote: post #128

Earlier quoted context omitted.

"In america, credit cards were 'good enough' compared to what was in china" I disagree. CC fraud was unknown to me until I moved to the USA. The security chip was not used for a very long time in the USA and just started to be a thing. First version of chip enabled CCs had no pin. I am not sure about good enough.

The chip doesn't add any additional security to the card compared to what was available previously; US credit card companies have only added it to avoid additional legislation from Congress. Also, the whole reason Europe had the chip and the US didn't was because phone lines in the US were better than ones in Europe, so it was vastly easier to do a quick authorization check in the US. The phone lines were not "good e…

Actually, the data on the magnetic stripe was in plaintext. The chip has a digitally signed copy of that data. This allows the bank to authenticate the card as valid and eliminates attacks where a fake card is made with stolen data put onto the stripe.

This does nothing for online payments but very effectively curbs fraudulent card present transactions.

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