[Dave Birch] At dinner, a colleague mentioned his payment experiences on a recent trip to Greece. Apparently no merchants would accept cards, not even gas stations. My colleague asked if this was because of high fees charged by banks for card payments. Well, I guess it might be, but to be honest I imagine it’s got more to do with tax evasion on a massive scale. Greece is an extreme example, admittedly, but one of the advantages of using cash is precisely to evade taxes. Fortunately, in developed nations with stable economies, you don’t get that kind of thing and e-payments work everywhere at point-of-service with no problems.

No, wait… I’m in New York right now, and my payment experiences on this trip have been mixed. The good, the bad, and the ugly.

The good. I went into Duane Reade and bought a hat. You’ve no idea how hot is here (actually, it was like 104) and I was going to get sunstroke without protection. They had contactless readers. I tapped by iPhone (equipped with splendid MasterCard prepaid sticker) and it worked perfectly. So perfectly, in fact, that Dominique (the sales clerk) told me that it was “mad cute” and asked if all new iPhones could do it. I told her that they could not, but that one day, all iPhones would be able to do this.

The bad. When I tried to use my UK contactless debit card it didn’t work so the terminal here are still not configured to read EMV contactless cards (or, for that matter, phones). Couldn’t they get started on killing two birds with one stone here! Earlier this year, Scott Lofteness said, perceptively as ever, that there’s a block on EV deployment.

Yet, US issuers and the major card networks can’t really make decisions to invest in EMV because the business case still doesn’t make sense.

[From The Case for EMV Chip Cards in the US? — Payments Views from Glenbrook Partners]

Correct. But perhaps there is another route. Perhaps the transition to EMV can be disguised inside the transition to contactless? If US retailers aren’t going to install chip card readers for contact EMV, they might at least configure their contactless readers to accept EMV via the wireless interface.

The ugly. I went to a deli with three other people to get some authentic NY dinner. I had gefilte fish, latkes with applesauce and a pastrami sandwich with pickles, served by an authenticate Asian gentleman. When I went to pay, I was told “we don’t take cards, cash only” and was directed to an ATM at the back of the restaurant. The check was almost exactly $100, so I drew $100 from the ATM, for which I was charged a $2.75 fee. How does this benefit anyone? Had I paid with a card, I would still have paid the $2.75 without having the hassle of messing about with the ATM.

I had the same annoying experience the next day: I went to grab coffee and a snack at lunch time near Madison Park. I didn’t have any cash, and the deli wouldn’t take cards. There was nothing on the door to warn me about this. They, once again, directed me to an ATM at the back of the store. It I wasn’t so dammed English and polite and afraid of embarrassment I would have just put the coffee and snack down and walked out. I’m beginning to suspect that either the US is going backwards when it comes to payments or the rent the store owners get from the ATMs is pretty substantial.

Here is my plea: retailers, please feel free to not accept cards for whatever reason. I don’t care if you are sticking it to the man, avoiding taxes, a triad front, engaging in money laundering or paying off the cops, you should be forced by law to put a sign at least six inches by six inches on the door at eye level so that customers can decide not to patronise. Just like you have Visa decals, and MC decals, and Amex decals etc, so there should be a “cash only” decal, perhaps showing someone hiding a pile of notes under a mattress. Perhaps I will make this the art competition for next year’s Digital Money Forum!

These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers

2 comments

  1. I’m not sure I agree that retailers should be required to tell you up front what payment types they don’t accept. I often use American Express and quite a few merchants don’t accept it (because they charge significantly higher rates than others). I often ask first before attempting to purchase something whether they accept it. Merchants can’t be expected to accept all forms of payment.

  2. I’m intrigued to know why the UK debit card didn’t work? Even if the terminal couldn’t support a contactless EMV transaction I understood that the cards had to support both EMV contactless and the MSD contactless version for this exact scenario?

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