Follow the money

FILLERS

BY JOHN CULLEN

When our two children came home for the holidays, I noticed they carried very little cash, despite traveling from Chicago and Washington, DC. They are like all the other millennials, heading towards a cashless society. All transactions are done by credit or debit card, or by direct transfer with their banks.

I asked Justin if he would pay for a stick of gum with his credit card, and he said, “Probably.” He and Bridget rarely, if ever, write checks, which are a vanishing form of payment in cities although they’re still quite common in small town Iowa.

We have seen this movement to a cashless society here at The Times. More of the companies that do business with us now submit their payments to us by direct deposit into our bank account. At first I wondered how well this would work, but it works quite well, and I figure, why make it tough to do business with us? And we generally get paid faster by this method rather than waiting for checks to pass in the mail. Plus, merchants don’t have to worry about chasing down bad checks when payment is made by debit or credit card. They know at the register whether or not they’ll get paid.

The Times still issues payroll checks, but both Bridget and Justin are required to accept direct deposit of their pay.

I have started to join the movement, taking baby steps. I always pay for gas at the pump with a credit card. I only enter the store to use the restroom or buy gum and water — but I revert to cash inside.

The nation has been trending this way. In 2016, 40% of purchases were made by credit cards, 35% by debit cards and only 11% by cash. I suppose the remaining 14% was by check, chickens or bushels of potatoes. The only place where cash is used primarily are coffee shops and fast food restaurants. And even that is changing.

All McDonalds restaurants now accept ApplePay, which allows you to pass your iPhone over a scanner to complete a payment. There are a handful of other places in Storm Lake that accept ApplePay, whose main claim to fame is its ease of use and greater security than credit or debit cards. Android phones have a similar system.

Our daughter has had her debit card compromised several times in Chicago, most likely in cabs where card information can be stolen when it is swiped in the cab’s card reader.  If you use Uber or Lyft to travel in a city, no cash at all changes hands. You hail a ride and pay for it with an app on your cellphone.

Fortunately Bridget and Justin still bank here in Storm Lake, so when a problem occurs with the card, their local bank is easier to deal with than a big conglomerate bank in Chicago. When money is transferred electronically you can live anywhere in the country and still bank right here with people who know you.

There are several reasons for using cards vs. cash: Ease of use, security, and rewards for frequent use. Many credit card companies offer financial rewards for using them. That’s because merchants pay a fee to the credit card company every time you use a card.

A few businesses still don’t accept credit cards because they don’t want to pay the 2-3% merchant fee to the credit card companies. On the other hand, there’s a growing trend of businesses, primarily restaurants, that won’t accept cash. A story in The New York Times last week highlighted several of these dining spots that refuse cash so they 1) don’t have to take the time to handle and account for the money and make bank deposits (isn’t that a shame!) or 2) they don’t want to worry about sticky-fingered employees stealing money.

Most subscribers to The Times still send us checks, but a growing number are using credit cards and a few pay with cash. We are flexible; we’ll take whatever our customers prefer.