Re Brick & Mortar Store Goes Cashless

["Dave Farber" <dave () farber net>]

---------- Forwarded message ---------
From: Rahul Tongia <tongia () cmu edu>
Date: Fri, Feb 3, 2017 at 2:54 PM
Subject: Re: [IP] Re Brick & Mortar Store Goes Cashless
To: David Farber <dave () farber net>


Dave,

The India effort was ostensibly less about a cashless economy per se
(though that's a major additional goal) but about reducing counterfeits,
black money, etc.

Note, a thousand rupees is well over $50 in PPP terms.  Of course, PM Modi
didn't get rid of 1000 rupee notes - he just declared the old ones void, to
be turned in for newly printed ones (in 500 or 2000 denominations).  This
was why it was dubbed a "surgical strike" on black money.

Cashless transactions have two worrying points.  People have already talked
about anonymity.  It's interesting, there is metadata at hand to worry
about.  It's like a phone call where one may not tap the conversation but
still know whom I called, one may not know what I bought, but cashless
systems (some of them) would know where I shopped, and for how much.  If I
spend $50 every day at a liquor store...hmmm.

Even if we have truly anonymous debit cards, who will pay for their
transactions?  A $100 bill remains $100 a thousand transactions later.  IF
we assume we have mastercard type solutions (which are changing), these
charge, say (?) 2% or 25 cents, whichever is higher.  That means $100 is
now worth (to the consumers) only $98 one transaction later, and this
figure falls to zero about 153 transactions later.  Even a 1% or lower
transaction cost falls to zero at some point (assuming a minimum threshold
transaction charge).

India has a lot of mobile/digital wallets.  They are NOT charging
transaction costs as of now.  That means their investors are paying for it
- when one uses a Mastercard to load money onto the wallet.

Rahul

On Sat, Feb 4, 2017 at 12:59 AM, David Farber <farber () gmail com> wrote:



Begin forwarded message:

*From: *Suresh Ramasubramanian <suresh () hserus net>
*Subject: **Re: [IP] Re Brick & Mortar Store Goes Cashless*
*Date: *February 3, 2017 at 2:14:52 PM EST
*To: *<dave () farber net>
*Cc: *Rollie Cole <rolliecole () gmail com>

Kenneth Rogoff you mean?  For all that, here he is, talking about the
recent botched efforts to eliminate cash by government fiat in India

http://blog.press.princeton.edu/2016/11/17/kenneth-rogoff-indias-currency-exchange-and-the-curse-of-cash/

Funnily enough, Rogoff’s bio cites Jagdish Bhagwati of Columbia U as one of
his mentors, and it is several of Bhagwati’s former students, now working
for the Indian government’s Niti Aayog economic think tank, who appeared to
have pushed through the decision to demonetize 500 and 1000 rupee notes
(which, at the most, would buy a few days worth of groceries, rather than
1000 or 500 dollar bills – a thousand rupees works out to just under $15).

Bhagwati and his students are among the most vocal supporters of the move,
which has, otherwise, received widespread criticism.

https://www.wsj.com/articles/indias-demonetization-debacle-1481851086
https://hbr.org/2016/12/indias-botched-war-on-cash
[etc]

Bhagwati himself calls such criticism “cockeyed” and throws in a snide
reference to “stupid economists” (that he declines to name) in this TV
interview he gave on the subject -
https://www.youtube.com/watch?v=Oeii-4tvs1Y

Right now things have sort of limped back to normal, if you count a huge
(possibly short term) GDP hit of 25-50 bps growth among other factors.
https://www.entrepreneur.com/article/288522 but well ..

--srs


*From: *Dave Farber <dave () farber net>
*Reply-To: *<dave () farber net>
*Date: *Friday, 3 February 2017 at 10:57 AM
*To: *ip <ip () listbox com>
*Subject: *[IP] Re Brick & Mortar Store Goes Cashless


---------- Forwarded message ---------
From: Rollie Cole <rolliecole () gmail com>
Date: Fri, Feb 3, 2017 at 1:48 PM
Subject: Re: [IP] Brick & Mortar Store Goes Cashless
To: Dave Farber (by way of Bernard A. Galler) <dave () farber net>


The Harvard professor who has written a book on this is not worried about
small cash transactions, but large ones (like buying a house or car with
cash). His idea is to keep small bills, but cut way back or eliminate the
large ones ($1000, $500).


We also, currently, lack widespread access to "stored value cards" that
would preserve anonymity. I did get a rebate via one of them recently -- it
operated like a debit card without a pin code. I suspect we will see many
more such cards in the future.

[image: hoto]
*Rollie Cole*
Co-Founder, Wholesale Economic Development
512-537-0898 | rolliecole () gmail com | http://wholesaleecdev.com |
5902 Westslope Drive, Austin TX 78731 | WHOLESALE ECONOMIC DEVELOPMENT Vol.
I http://preview.tinyurl.com/wholesaleeconomics |wiseintro.co/rolliecole

<http://wiseintro.co/rolliecole>

On Fri, Feb 3, 2017 at 11:35 AM, Dave Farber <dave () farber net> wrote:


---------- Forwarded message ---------
From: Edward Biebel <edward () biebel net>
Date: Fri, Feb 3, 2017 at 12:17 PM
Subject: Brick & Mortar Store Goes Cashless
To: Dave Farber <dave () farber net>


Dave,

I thought IP might find this interesting.  This is the first retailer
that I've encountered that has gone completely cashless.

Thinking sustainably — one of our core values is all about making
decisions that will last longer than we will. We run our business with
an eye on the future, always thinking about choices that will make the
biggest impact and will resonate with you, our consumers, who embrace
evolution and innovation. It’s through that lens that we’ve decided to
go cashless.

By March of 2017, sweetgreen will no longer accept cash — we’ll accept
payment by credit card, debit card or mobile app.* Welcome to the
future, baby.

https://medium.com/@sweetgreen/cashless-49f64f24dd0f#.ch0ssajyj

Ed



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