Cash v Cashless.

[Bubblegun]

Today I read this article how the company basically forced people to purchase their goods via their app by refusing to take cash.
Now I have read people touting how great digital is, speed, convenience, and sense of freedom, without considering any pitfalls, and putting down the very real benefits of cash too.

Now I have personally made the choice to remain with cash, partly through being an older git, but also through dogma, and dare I say it, I believe it can also keep someone in job. But the main reason i have refused to go digital is the psychological aspects of spending on the digital system, which is very similar to the behaviour of people using a credit cards. Namely it APPEARS to be painless to buy with a credit card or digital system. The emotional disconnect between the shopper, cash, the retailer, and what I would call the "VISUAL BRAKE",causes people to overspend. After all, anything that takes your eye off the account/cash is good for the retailer and bad for YOUR pocket, and that's why we are encouraged to track our spending.

In April and May, food, beverage and merchandise sales at the Eagles' stadium in the northeastern city of Sendai jumped 20% from the same two-month period of 2018, in part because taking cash out of the equation changed spending habits.
Experts say that when queues move faster, more people join. Customers don't see cash leaving their wallets and focus on the satisfaction of a purchase, so they spend more.

In fact it appears to be one reason why the JP gov is encouraging this kind of payment system further to increase consumption and with the new sales tax coming that will be an even bigger windfall.
1or2% of an increase in sales is certainly worth billions of yen to Japans exchequer.

I still personally like cash, and I like to slot 500,100 yens into a tins, and crack them open for something, and see the look on my wife eyes when its counted. In fact she's started it herself. I also think its a great way to teach the kids about money.It's a tangible commodity, and not some digital thing on the cloud out of sight!

Do you prefer cash or cashless? Is it something we should be teaching the younger generation about?

https://japantoday.com/category/busines ... -purchases

[mule96]

I shop my daily groceries, what is basic living and Nomikai needs by cash. I still want to feel the money and it gives me more control over my budget and the sometimes outgoing drinking that happens. Utilities if possible by bank transfer. Stuff like clothing, furniture, larger investments I pay by credit card, but only after I accumulated the necessary amount through monthly allocation in my budget category.

[adamu]

I only use cash when no other option is available.

I use credit cards, debit cards, IC cards, mobile payment apps. Set up automatic furikae for all the regular bills. I get a few thousand yen cashback every month.

I also put every single transaction into a budgeting app, which keeps me honest. If I overspend in one area (eating out, gifts or travel are common ones), I have to adjust elsewhere. Having the digital trail helps for this hugely; with cash it's very easy to lose track of where the spending went.

[Cracaphat]

Not a big fan of credit cards though I'll use if online shopping.I prefer cash and in my job I get paid cash in the hand,or should I say the envelope.Cashless just leads bad spenders to go nuts like it's 1999 again.In fact, that is probably one of the hopes.Get people drowning in their debt or in their sorrows, makes establishments money.

[Bubblegun]

Not a big fan of credit cards though I'll use if online shopping.I prefer cash and in my job I get paid cash in the hand,or should I say the envelope.Cashless just leads bad spenders to go nuts like it's 1999 again.In fact, that is probably one of the hopes.Get people drowning in their debt or in their sorrows, makes establishments money.

Totally not a fan of credit cards either. Except for online purchase and if they could i would prefer to use a debit card, but i remember when I first came to Japan, went out with the wife, and i asked if we could pay by debit card. It took them ages to A) find the machine, B) set it up, and C) actually work out how to use it.That was 15 years ago.Totally shocked at a country that prided itself on tech but i couldn't even swipe my bank card then.

I think you're right, bad spenders are more likely to spend even more, and I do expect more people to start to drown in debt in the future. The psychology of impulse and speed of payment make a huge difference.
So for example people with ADHD who may not impulse control, or the person who is bipolar, especially in the manic phase, or depressive phase, are some of the people who may well, fall victim to the speed, and ease of the system, and the buzz of the purchase, and yet face all the consequences, while the company cream it in and pay out the dividends.

This is my belief, no evidence, but companies like Rakuten know, thousand of people will never use their points.
The financially educated maybe able to use them well, but for people who struggle, the young, and inexperienced they don't really see the debt and the interest.
I think this girl had it spot on.
https://www.nbcnews.com/better/pop-cult ... ncna902516

I think I will always prefer cash, as there is a reason those companies are pushing cashless systems, they've done the number crunching, had the Consumer psychologist in, and they know it works.

[RetireJapan]

I use credit cards for almost everything. It makes it easier to track spending, and I can use the miles for travel. However, there are many studies that seem to indicate that people spend more money on cards than they would do if they were using cash.

I haven't seen much of a case to switch to a proprietory cashless system.

If someone is trying to rein in their spending I recommend only using cash until things are under control.

[N00bster]

For all expenses that are static or cover the basic needs (phone/internet bills, subscriptions, regular investments, but also food at supermarket or restaurants) I see no reason to not use credit card and benefit from points and miles. These expenses are going to happen all the same anyway.

I have started using cashless systems (Edy notably) as it was a good way to dispose of the Rakuten points I accumulate through the above-mentioned credit card (free stuff at the combini!). Then realized that if I charge using my credit card through Google Pay I get the same point benefits as other purchases (basically 1% back in points, and then 0.5% back as I spend using Edy). That's 1.5% savings on top of the benefit of not having to carry bills and coins since everything happens on the phone.

I tend to prefer contactless payment to recent proprietary "advances" like Line Pay, Rakuten Pay and the infamous PayPay. Having to scan a barcode is as cumbersome as reaching out for cash, and with these you cannot charge by credit card, so I'd rather use the latter and get more points.

So my payment methods of choice are, in order:

1. Suica/Edy for small purchases and credit card for bigger ones (having to reach out for the CC is as cumbersome as reaching out for cash),
2. Rakuten/Line pay for their smaller but still existing benefits,
3. Cash because it's 2019.

I know about the psychology studies that say people pay more on cashless system, and they are not hard to believe, but I also think with some discipline you can benefit from the system without necessarily spending more:

• Actively track absolutely everything you spend. This will add the friction that can act as a disincentive for mindless spending.
• Decide on what you need/can afford to do every month and stand by it.

Like Ben I tend to maximize payments using a credit card with big benefits, because they are a pretty good deal. I also come from the position of only using a debit card to not spend money I don't have, but at the end of the day if you pay your balance every month it's exactly the same. Debit or credit, just don't spend money you don't have and voila.

This doesn't account for the occasional, impulsive buy. The solution is the limit them as much as possible, cash or cashless, because they are rarely a good idea anyway.

[TokyoWart]

Interesting discussion. I think there is no question that the move away from cash will continue. Governments prefer cashless transactions because they are easier to track and tax and companies have long known that spending is higher when it is invisible to the spender.

It's hard to completely opt out of cashless transactions but an even more important thing may be to recognize this as an investing theme. The Motley Fool has a "War on Cash" theme for selecting stocks (Visa, MasterCard, American Express, Paypal, Square, etc.) which has worked well for me in the part of my portfolio that isn't core index funds.

[StockBeard]

I like the privacy aspect of cash. No company is tracking which restaurants I enjoy or what day of the week I do my grocery shopping, and I think this is important. For the same reasons that I don't have a personal facebook account and that my linkedin profile will remain mostly empty until I look for a new job.

[ricardo]

When I visited the UK in May I didn’t need ANY cash. Anywhere. Everything was done contactless with my Apple Watch.

That’s the future.

If you don’t agree, please send your answers to Ben on a postcard/fax ...

Or you could message him...

(Oh, there was one famous Chinese restaurant in London which posted an apologetic message on their door saying ‘cash only’. I just didn’t go there.)