Bitcoin Forum

How much does it cost the merchant to accept cash?

It takes time to count notes and coins, and to give back change.
Counterfeits might be a problem.
Money needs to be counted at the end of the day, which takes time.
Employees may steal a little a bit as the sum seldom adds up anyway.
Money needs to be transported to the bank securely, which isn't cheap.
Cash pays no interest until deposited in bank.
Other costs as well?
How much does this all add up to?

My local supermarket has a lcd monitor at each counter where it shows the price (among other info). It could very easily also display a bitcoin QR code. Assuming zero confirmations is secure enough, it would take only seconds to make a payment. The supermarket could exchange bitcoins to euros several times a day, and only face fees and spread which adds up to 1% or so. Would a payment in bitcoin be more lucrative for the supermarket than cash?

Bitcoin's dirty little secret is that it is not ready for mass adoption. With the 1MB block limit, that apparently works out to about 7  transactions per second world-wide. If it got really big really fast: it would replace wire transfers, not credit cards/cash.

I've never actually thought about it this way, but I guess you're right. Theft from tills by employees is a big problem. Counterfeiting is also a massive issue which Bitcoin solves too. I think it's only natural that digital payments in some form will replace coins and notes, but I guess half of cash transactions are actually done electronically with either bank transfers or credit/debit cards as well anyway.

Well they can't refuse cash so they have to accept it if that's what the customer wants to pay.

How can employees steal if the they use cash registers?  If the receipts don't balance out then the employee has to pay out of pocket.  This was common when I used to work as waiter.

Most businesses don't care about interest.  They usually just have checking account.  They need cashflow for payroll, supplies, pay vendors, etc..

Easy. Never actually put it through the till or cancel the last transaction. And a lot of places will change cashiers several times without kittying up so you wouldn't know who was dipping in the till.

There are also things like discounts. For example, Wal-Mart does price matching (as do more stores). Want $10? Ring up your $20 item and price-match it to $10. Boom, free money.

The same thing can happen with Bitcoin as well though, really.

(Also, I'm not condoning theft!)

This is not true in most countries.

True, but don't staff normally have to get permission from a supervisor or manager to do a price match? I think that's how it works over here, otherwise stuff like this will happen.

Not locally for sure. In fact, stores that offer other types of discounts usually don't need permission from anyone either. Sometimes they'll be like "I just need to see your ID card (senior, military, whatever) so the camera can see that I looked" before they do it, but most stores do price matching with no problems.

Also, with the comment about stores having to accept all money, that's true in the US. Here it is "legal tender" and they can't even deny paying in change (I think there was a rule about like 100 pennies being the cap on those or something, but I'm not 100% sure about this one). The general idea here is that if it's cash, it has to be accepted.

Correct.  Anyone can open a store in the US that sells, for example, ice cream and not accept cash.  In fact, they don't even have to accept US dollars in any form.  They could only accept bitcoin for their ice cream if that's what they chose to do.  

The only time someone in the US is required to accept USD is for the settlement of debts.  For example, if the store owner gave Bobby an ice cream coin because he didn't have any bitcoins, Bobby could legally settle the debt in dollars.  

True. In some countries it may be illegal to refuse cash. In countries where it is legal to refuse cash it is still in most circumstances foolish to refuse it. You may lose a customer otherwise. For the same reason most merchants accept credit card despite the cost.

I just wonder what the percentage cost is for cash as payment. For bitcoin it is the time value of ~10 second (compared to maybe 40 seconds with cash), a tiny fee (for buyer only), the exchange rate risk and the exchange to fiat (~1%).

I think it's hard to determine the percentage cost because there are different factors. For example:

1) The risk of holding on to cash (think about theft/robberies/loss/etc.)
2) The transferring of funds (which may require a security team, Brinks, etc.)
3) The removal of funds (I am not sure what happens if a business gets tainted funds but I am assuming they are just confiscated and counted as a loss?)
4) Counterfeit money (which would really be part of #3 but figured I'd toss it in there)
5) Miscounts of change (I can't count the number of times someone has given too much/too little change)

All of these have their costs associated with them.

I agree. But I'd be surprised if big retailers don't have analyzed these costs.

For example one cashier handles $3,000 a day according to the receipts but only $2,998 is counted at the end of the day. $0.50 is declined by the bank as counterfeit. During one hour, twenty minutes is spent handling cash which would have been reduced to ten minutes with credit card payments and to seven minutes with bitcoin. These are wild numbers I came up with. Would just like to see such an analysis from a real company.

It's a great idea, but I don't think we're going to get any real answers here. That may be something that the community would have to push for. Like an "how about we SHOW you how much money/time you'll save by offering Bitcoin as a payment method?" I just don't see a lot of stores doing that on their own. At least not yet.

The IRS will steal your money (more than just via taxes) if you deal mainly in cash.

http://www.washingtonpost.com/opinions/george-f-will-the-heavy-hand-of-the-irs/2014/04/30/7a56ca9e-cfc5-11e3-a6b1-45c4dffb85a6_story.html

What exactly is a 'secret warrant'? They just took the money and emptied the entire bank account without serving them a warrant or actually telling them about it?

It is necessary to fight terrorists. Because...terrorists.

Ah one of them kinda deals. Surely they were not meant to be exploited or used in such a fashion, especially on American soil? I thought it was still illegal for that sort of stuff?

banks charge a high price for accepting cash
having cash in your registers increases the changes of armed robbery

Supermarkets I go to have very simple two or three line LCD price displays.
They couldn't display a QR code.
So you'd have a significant investment cost to replace them with terminals that could. And, of course, of developing, testing and validating the software.
You'd also have the issue of ensuring that you had sufficient phone network coverage at the tills for all major networks, otherwise people wouldn't be able to pay.
You might save on per-transaction costs, but there would be significant up-front costs.
At the moment, would there be enough Bitcoin transactions to recoup those costs?
Plus, are people currently paying in cash likely to be those who would switch to paying digitally? Isn't it more likely to be those customers who are already paying with debit or credit cards?

That is ridiculous. "You did nothing wrong and as far as we know are operating under the law... but we're going to steal all your money anyways!" This is how businesses get destroyed. This could be detrimental. How do they pay all their bills if they were putting all their income in the bank? How do they pay suppliers to continue going on? If they did nothing wrong, they shouldn't be subjected to these things.

Yes they can refuse cash and any number of merchants, especially insurance companies do just that.

This could easily be changed in the future.

With advances in CPU speeds, and increases in amounts of bandwidth that is easily accessible to consumers the block size could be increased.

The block size cap was put in place with the users in mind as if the block size cap was loo large people's computers could not handle it and they would not use Bitcoin. 

the question is: why spend bitcoin if it will be worth more in the future?)

Or, why acquire bitcoin in the first place, because it might be worth 999 decillion dollars in the future? At what point do you stop converting your fiat to something you will never use because you're waiting for it to be worth infinitely more?

To acquire other things that you need or want today, obviously.

Seems like a rather silly question.

This is an issue with bitcoin. With people thinking that it will increase in price in the future, it makes people hesitant to spend it unless they absolutely need to.

Sounds like a benefit, not an issue.

Instead of being afraid that you will lose purchasing power if you don't waste all your money (and all your borrowing power) on useless trinkets that have no longevity, you're encouraged to think about your purchases, buy things that will last, and avoid wasting money on things you don't need and don't really want.

Besides, in reality, you have the exact same problem with any money you spend (bitcoin, U.S. dollars, or otherwise).  The existence of bitcoin makes me hesitant to spend my U.S. dollars unless I absolutely need to (because, if I don't waste my U.S. dollars on useless trash, then I'll have more U.S. dollars available to exchange for bitcoins that may increase in value).

The issue with this is that if people think the value of their coins will appreciate indefinitely then they will not spend unless they absolutely have to. People will only buy necessities and will in general live a lower standard of living. The incentives to invest your bitcoin are there but are diminished by the fact that you expect a return by keeping them "under your mattress"

If you have a small amount of inflation, you do have a small incentive to buy something sooner rather then later if you are going to purchase it regardless (say for example you have a refrigerator that will need to be replaced in the next 6 months, you may purchase now instead of later to get a better, more efficient refrigerator as you think the price will rise slightly by the time you are forced to buy one). Small inflation also gives you the incentive to invest "smartly" (in investments that are likely to produce a positive return) and to innovate (if you invest the time, energy and money to make something better then what exists today then you will earn a profit) and gives you a disincentive to hold money "under the mattress"   

"Why spend bitcoin, if it'll be worth more tomorrow? Spend cash, it will be worth less in the future."

This is not correct.

There is no incentive to spend inflationary cash.  That same cash could be used to acquire something like bitcoin (or gold) instead of the refrigerator.  There is no incentive to purchase the refrigerator sooner than later, since by spending your inflationary cash, you are actually spending the deflationary bitcoins (or gold) that you could have purchased with that cash instead.

It's like gold , it might go up or down in future but cash has inflation :(

So it's up to you to decide on what to do with it , either invest more or spend it

that's why power of mining is important for futur ... more faster network if difficulty decrease because of the needed speed and integrated transaction in block.

now, 10 per day, it has a heavy block with 900 transaction : 2 transaction per second.

in progress ... and we have a strong marge of progress.

Theft from employees via employers [= "profits margin"]  is a far, far, far, far, far bigger problem. Ditch the polyglot oligarch parasites, my fellow wage-slaves. It will only continue getting worse (https://www.youtube.com/watch?v=TZU3wfjtIJY) until you wake up. Yes, you. We are the ones we've been waiting for.


http://2.bp.blogspot.com/_BWD3jaICbzg/TUBLOvaSX3I/AAAAAAAAAu4/lAvNGcpmPTA/s400/income+share+cocktail.jpg

Our time has come (https://www.youtube.com/watch?v=3YR4CseY9pk).

The nice part about cash is that no one knows how much you have received unless you over-do it.

Same is true of Bitcoin if you do it right.

Would you like to know more?

Even if you use that cash to purchase bitcoin (or gold) you still have the same incentive to spend it sooner rather then later regardless on what you are spending it on.

i think his point was that if bitcoin were ubiquitous like paper notes, and were the main medium of exchange for goods/services, then people would not spend it.. which doesn't help with growth in the economy. it can't be used like the way cash is for that reason.

Just going back to the OP. Yes, it costs businesses money, certainly in the UK to deal with cash. For example when a business actually deposits the money into their account at the branch level they are changed a fee. HSBC is instance charges its banking customers 60pence for every 100.00 pounds. If a small business turns over allot of cash this fee can add up to hundreds or even thousands of pounds