George Kamel - VISA’s War on Cash

Episode Date: November 8, 2023

It seems like more and more retailers are going completely cashless these days, only accepting cards and digital payments. But is that even legal? I mean, it says on the bill, “This note is legal tender for all debts public and private.” In today’s video, I’ll explain why some stores are going cashless, why it’s totally legal, and what you can do about it. Links: This episode is brought to you by BetterHelp. Give online therapy a try at https://www.betterhelp.com/george and get on your way to being your best self. being your best self. Preorder George Kamel’s new book, Breaking Free From Broke, and get more than $100 in FREE bonus items. What a Cashless America Looks Like EveryDollar budget deal: I love a good deal, and when you sign up using this link, I’ll hook you up with a 14-day free trial and $15 off your first year of the premium version of EveryDollar. Learn more about your ad choices. Visit megaphone.fm/adchoices

It seems like more and more retailers are going completely cashless these days, only accepting cards and digital payments. Here in Nashville, for example, we've got a brand-new soccer stadium, and it's completely cashless. And if you're wondering, yes, I'm now a bandwagon fan, I've been to two whole games. Couldn't tell you what was happening on the field, but I had a good time and ate some nachos. Football is life. But this move away from cash is not all that surprising. Okay, Pew Research shows that in a typical week,

41% of Americans make zero purchases using cash, which is honestly less than I was expecting. And even though I rarely pay with paper presidents these days, there's just something about not accepting cash that feels wrong. You know what I mean? What do you say in Mr. Squidward? Everyone's money is good here. You'd think these retailers and restaurants would prefer cash,

since they have to pay a processing fee every time someone makes a purchase with that card. And is it even legal for them to reject cash? I mean, it says on that dollar bill, this note is legal tender for all debts public and private. Right there, right by Georgia's face. So in today's video, I'll explain why some stores are going cashless, why it's totally legal for them to do so, and what you can do about it.

By the way, you know what else is still legal? Hitting those like, subscribe, and share buttons. Seriously, you can hit them as many times as you want. There's no law against it. It's your American right. All right, there are several reasons why a business would go cashless, despite losing a small chunk of every transaction to processing. fees. One reason is to reduce robberies. I mean, think about it. If everyone knows there's no money in the cash register,

the sticky bandits are going to be less inclined to throw a brick through the window of your toy store. Another reason is to provide faster service. You see, a card transaction is usually faster than cash because no one has to fumble through bills, counting out exact change, or check for counterfeits. By the way, Target does not, in fact, accept Jucky cheese coins. Don't ask me how I know. They do, however, except Saka Jua's. Love a Saka Jua. Love saying Saka Jua. Now, a few years ago, the restaurant chain Sweet Green found that employees at their cashless stores could process up to 15% more transactions per hour than the workers at their other locations. And if you've got a steady stream of customers coming through, that can make a difference.

Another benefit of accepting only electronic payments is that it can help stores track their sales and inventory a whole lot easier. When it's all done electronically, you automatically have a record of everything that happened. And there's lots of other reasons like less employee theft, less bulky equipment, less trips to the bank, and less germs. Oh, you're spreading germs everywhere. And one big reason a retailer would go cashless is that customers tend to spend more when they aren't using cash.

So there's a good chance that higher spending will offset those transaction fees. But there's a dark underbelly behind why some stores are going cashless, and I'll tell you what it is. But first, I want to shout out today's sponsor. This episode is sponsored by BetterHelp. Hey guys, it's George. You knew that.

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that were awarded the money were required to use it to upgrade their checkout technology to be cashless, and any money left over could be used for marketing. Hmm, I wonder why Visa would want nobody to pay with cash. Oh, that's right, because when you pay with cash, they don't make any money. No money. Remember the processing fees we mentioned earlier? Well, that fee is typically around 2 to 2.5% of the cost of the transaction, but could go all the way up to 3.5%. So let's say you own a Dolly Parton-themed fried pickle food truck called Girkin' 9 to 5.

First of all, well done, solid name. But let's say you do 25,000 in sales per month, which is common for a food truck. Now, at 2.5%, that means you're paying $7,500 a year, in processing fees. And I don't care who you are, that's a big deal. And when you think about all the restaurants and businesses that pay these fees, it adds up real quick. According to a Nilsson report, U.S. merchants paid over $160 billion in processing fees in 2022 alone.

And that adds up to a lot of money for people like Jack Forrestel, who is Visa's head of global merchant solutions at the time of this initiative. And let me tell you, this guy loves payments. And he said this in a statement. To Visa, a cashless culture means convenient. means convenience, security, and ease of use. That translates to freedom for consumers and merchants alike. Aw, Jack, thank you. Thank you, Visa, for caring so much about my security and freedom. So much that you would pay hundreds of thousands of dollars to force me to pay in a way that makes you a

crap ton of money and makes life more difficult for the 5.9 million households in the U.S. who don't have a checking or savings account and rely on cash to buy things. Not to mention, the money you're costing hardworking small businesses and entrepreneurs around the country. And let me tell you, Visa knows what they're doing. Their chief executive Al Kelly told their investors, we're focused on putting cash out of business. Them's fighting words, Al. Fighting words.

Put them up. Put em on. In fact, the spokesman for Visa at the time said, We are declaring war on cash. Pump the brakes, Visa. I understand wanting to make a profit, but a war on cash, it's a little dramatic. What did cash ever do to you, besides not working in a vending machine at one time?

Those are some of the reasons why, reasons why a business would go cashless. And while it might make sense for some stores to do it, it can just feel wrong to us. And some people have questioned if it's even legal, since our paper currency clearly states this note is legal tender for all debts, public and private. And that statement is backed up by a law.

But here's the deal. Technically, debts aren't the same as payments. You see, a debt is money you owe a person or business. So you don't technically owe a debt if you haven't made a purchase and received a good or service yet. Say, for example, you're standing at the checkout, holding a box of cap and crunch oops all berries. Now at this point, you don't owe the store anything because you haven't taken it home and indulged in that sweet, sugary goodness. Yes, a business

generally has to accept legal tender for payment of debts, but they don't necessarily have to accept cash as a form of payment in the first place. And the government is surprisingly okay with this. According to the Treasury Department, private businesses are free to develop their own policies on whether or not to accept cash unless there is a state law which says otherwise. So it's technically legal, but Some people, they're not having it. Take that money, and I will take my strawberries. Okay, first of all, here's just a rule of life for me. Don't harass employees over this.

Cachiers and servers, they don't have any control over a company's decision to be cashless. So be kind, be a good human. They're just following stupid rules made by stupid people. And if you feel strongly about this, just talk to the manager or the store owner. Stores want their customers to be happy, and if no one comes back, they don't make any money. And if they get enough complaints about going cashless, there's a chance they might change that policy, especially if they're going to lose customers over this.

Remember the restaurant chain I mentioned earlier, Sweet Green, who found out that their cashless stores could process more transactions per hour? Well, they ended up transitioning all of their stores back to accepting cash after some severe backlash for excluding unbanked customers. That means people who don't have bank accounts. So if your favorite hot dog stand just went cashless and you don't like it, let them know how you feel. Just don't do it by yelling at the poor kid at the register.

He's got enough to worry about with the acne and finding a prom date and dropping some bags on Luigi skins and whatnot. I think that's what the kids are doing. I don't know. I haven't checked in in a while. So even though it seems like more and more stores are going cashless, personally, I'm not losing any sleep over this. Okay, I mostly use a debit card or Apple Pay connected to my debit card.

But even if you're someone who prefers cash, or if you're using the cash envelope system, which I highly recommend, I don't think you need to worry too much about the whole country going cashless anytime soon. Okay, most stores still accept paper currency, and I think they're going to for a while. And if you want my thoughts around the idea of a cashless,

I made a whole video about that and I'll drop a link below. It was a good one. And if you want to learn more about how this credit card revenue sausage is made and how disgusting it really is and how these companies are screwing over businesses and consumers alike, check it out in my new book, Breaking Free from Broke, which is now on pre-sale. I break all of this down in the credit card chapter and hopefully convince you to ditch the swipes and stick to using your own money. Hope you guys enjoyed today's video. As always, be sure to like, subscribe and share this video. with your friends who still use cash, listen to Johnny Cash, need to clear their browser cache,

or have a stack of Saka Joias burning a hole in their pocket. Thanks for watching. We'll see you next time.