[lug] Credit - was: [Letting folks pay from the web.]

[Bear Giles]

Don't forget that ATMs usually dole out only Yuppie Foodstamps ($20) and
many businesses won't accept any bill larger than that.  I remember when
"breaking a $20" was a big deal but now it's in nearly every transaction --
see YF and the tendency of many people to just grab a $20 out of our wallet
and stuff the change in our pocket.  The perception of holding up the line
when getting exact change, or even just the right combination of $5s and
$1s, doesn't help.

In that environment a CC is much more practical than carrying around a thick
wad of 20s.

BTW I'm honestly surprised we haven't seen ATMs start passing out $50s.
Small dollar stores (e.g. convenience stores) might still want to avoid them
due to the risk of loss and risk of robbery, but grocery stores and big box
stores routinely have sales where $50s would be appropriate.

The only explanation I've been able to come up with is that there's such a
huge incentive to keep people from realizing how much they're spending by
using cash, vs. a quick swipe + signature, that there's been an immense
emergent property to keep it from happening.


On Wed, Feb 3, 2010 at 8:10 AM, Rob Nagler <nagler at bivio.biz> wrote:

> Jeffrey Haemer writes:
> > interest, but I started the thread, so I keep reading it. :-)
>
> Silly person.
>
> > On this item, I'll dip my toe back in because I know a related technical
> > trivium.  I've been told that a reason credit cards spread faster through
> > America than elsewhere was also a reason cell phone adoption was slower:
> > landlines everywhere else sucked.
>
> I lived in CH from '86-98.  I saw some rise of CCs and debit cards,
> but cash was king for the entire time I was there.  At that time, CCs
> took off in the US.  Cell phone adoption was about the same rate as
> the US afaik.
>
> Nobody can know for sure, but the fact that using 100 and 1,000CHF
> denomination notes were extremely common.  You could accept these
> bills withut fear, because they had metal wires, watermarks, different
> sizes, etc.  I would argue that the slow adoption of
> anti-counterfeiting technologies in the US helped speed the adoption
> of credit cards.  Today, you can maybe pay with a $100, but you can't
> pay with $1,000 or $500, because they don't exist.  BTW, the Swiss
> were world leaders in money printing technology.  Orell-Fuesli had
> quite a book of business in third world countries when I was living
> there.
>
> Another factor is the quality and orientation of the existing
> electronic payment systems in CH.  They use the "Giro" approach, which
> is what I would call debtor-based, that is, the debtor initiates the
> transfer.  This is much more secure than giving out credit-slips
> (IOUs, checks, whatever) as we do in the US.  This requires the
> creditor to initiate the transaction, and as we know, leads to a lot
> of fraud, because there's no good way to know if a check is forged.
> Many businesses no longer accept checks for a reason.  The
> check-system in the US was built on trust (which was never really
> there, but nice to assume) so it costs a lot when a check bounces.  A
> giro can't bounce, because it's got money attached to it as soon as
> the debtor initiates the transfer.  With credit cards, the merchant
> pays insurance on each transaction, which is a reasonable way to do
> it.
>
> Rob
>
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