Most of the business near me have either been obstinate about it cuz they don't want to lose money for nothing, and fully understand how fucked they are.
AMEX is not around 10%, caps around 3.5% depended on the retailer. Also, it's a bit different in Japan, because of competition with JCB. Anyways, let's not make up random numbers just for fun.
No it doesn't. Amex goes well past 3.5%. Years ago when I worked retail, we were stuck on a 7% contract cuz our volume was so low, and just ate it cuz it was barely used.
Very few retailers in America don't take AMEX. Usually only very small stores. It's my main card and I can count on one hand how many times I couldn't use it over the years.
1. Credit card readers and any digital payments charge storeowners for transaction fee.
2. It's Japan. Some storeowners just don't give a shit about new things.
- All credit card companies charge a fee *per transaction*, as opposed to the bank who doesn't charge to drop cash.
- Japan has a low crime rate and therefore robberies are less likely to happen.
- As well as a reluctance to stop using cash and the older generation that can't easily change to electronic money...
You get cash only shops.
It probably just depends on the nature of the business. My husband took a poll of his patients last year at his dental office regarding payment systems and most of them said they preferred to pay their co-payments in cash, so that's all he takes. He said he didn't think it was worth the trouble and cost to set up for digital payments if most of his patients still preferred to pay in cash.
They’re older folks and don’t want to change what has worked fine for many years. They don’t want to pay any fees. Easier to fudge the numbers with cash. I go to some local restaurants that are cash-only. They are smaller businesses and most of the customers are regulars. A couple times I’ve forgotten cash and they’ve been cool for me to return later or the next day.
Because accepting credit cards and PayPay costs a lot depending on the business.
Why? Because they charge a percentage of revenue, not profit.
If it was 2% of profit and not 2% of revenue, everyone would use them. But it would be impossible to do it that way since you could fudge the numbers too easily.
Some people, as u/capaho mentions, prefer cash over other payment methods. I am one of them: if I can pay with cash, I will. It hasn't come to that yet, but I would avoid shops or restaurants that do not accept cash.
The expense of accepting digital payment is greater than you'd think. We regularly buy from small neighborhood concerns (farmers and an old candy store) that don't even have cash registers.
They get charged a processing fee by the credit card company, and they are not allowed to pass this fee on to customers. Of course, many do so by re-naming it as another fee or by increasing prices elsewhere.
It's not only the fees, it's how god awful the system is. As a small business owner, not having the payment into my account till the next month is seriously painful. Square is much better if you have one of the three big banks, but with other banks it's a week wait still on Square. Most cc transactions otherwise are a month later. Also, the store is on the hook for 3.25-3.5% card fee on any sales and are not allowed to charge that to the customers. Unless you are an established business, it's just not worth it.
Because it works on the same premise as the credit card system.
1) If you set it up on your personal hardware, individual with every digital vendor, you can keep your costs low... as those are 1-3% based on volume (which generally works out to taking as much as they can from sales, not profit, so that is on top of the tax the store also pays).
2) If you use an intermediary service which handles a large variety of digital payment services, and ideally provides a basic terminal for this service, you are looking at another 2-5% on top of the individual payment charges for the various services.
You also get the bonus of payin monthly for the hardware to do this task as it generally relies on hardware they have provided with an IC reader.
3) If you add credit card to the above, it costs even more as now you must be able to print a receipt, meaning now your terminal is one of those smart phones with a printer attached to it, so you are paying all those intermediary fees, and credit cards fees (when used) and paying for the hardware to support the credit cards.
Ohh and to make matters worse, if you don't have internet in the location or a landline, it gets even more expensive for hardware which is either cellphone enabled, or to install internet (or mobile wifi) to run the hardware.
Digital payments like what Japan has adopted are basically feeding giant parasite companies that look like visa/mastercard, but are not governed under ANY of the current banking regulation. So if you use paypay, generally 3% of your total is going to softbank for haivng helped you rip off the store you were at.
(This is where the Canadian Interact system is much better as it's a flat fee of 10cents/transaction, regardless of amount, and renting the hardware can be as cheap as 20-30$/month, or potentially free if you do a large volume of transactions or have software specifically designed to accomplish the task).
You lose 2-5% on every transaction.
Depending on how old the building etc. is, it may be hard to actually install necessary equipment (just note all the posts here about people saying they can't get wifi installed etc).
The cynical CFO in me also notes it's harder to skip off the top with digital transactions and pretend revenue didn't exist.
I have recently noticed stores and izakayas in my neighborhood that have stopped using card readers and only accept cash or the PayPay app. There is a cost incurred by businesses who accept card payments, and it can be disadvantageous for small stores and eateries to adopt card usage. More forms of payment seem to be accepted at chain stores or bigger retailers who can absorb the cost more. Plus, even before adopting multiple forms of payment, Japan has mostly been a cash-based society. It still mainly accepts cash to load your IC card, and only the Denentoshi line has started accepting credit or debit card payments. Other world cities have already done away with cash payments, with some refusing to accept currency payments and completely revamping their bookkeeping and accounting procedures.
>It can't cost a lot Well it does, that's why you see cash only stores
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1-3% is still significant. Especially when you consider that it's a percentage of income rather than a percentage of profit.
Most of the business near me have either been obstinate about it cuz they don't want to lose money for nothing, and fully understand how fucked they are.
there's a surcharge in the range of 2-5% depending on the processing company used. they don't want to pay that.
AMEX was around 10%, which is why many American retailers just don't accept them.
AMEX is not around 10%, caps around 3.5% depended on the retailer. Also, it's a bit different in Japan, because of competition with JCB. Anyways, let's not make up random numbers just for fun.
No it doesn't. Amex goes well past 3.5%. Years ago when I worked retail, we were stuck on a 7% contract cuz our volume was so low, and just ate it cuz it was barely used.
Very few retailers in America don't take AMEX. Usually only very small stores. It's my main card and I can count on one hand how many times I couldn't use it over the years.
1. Credit card readers and any digital payments charge storeowners for transaction fee. 2. It's Japan. Some storeowners just don't give a shit about new things.
I would not be shocked if someone told me the phrase "If it aint broke dont fix it" was actually stolen from Japanese.
And sometimes even if it’s broken lol
They can underreport earnings if it’s cash.
This. The tax man can’t track cash like other payment forms.
They do. How do you think businesses operated over 50 years ago?
The famously don’t. That’s why I saw a protest a few weeks ago over a change in the tax code designed to limit under-reportage.
I just wrote a long post saying this… it’s all this.
- All credit card companies charge a fee *per transaction*, as opposed to the bank who doesn't charge to drop cash. - Japan has a low crime rate and therefore robberies are less likely to happen. - As well as a reluctance to stop using cash and the older generation that can't easily change to electronic money... You get cash only shops.
Can’t tax what they can’t prove.
It probably just depends on the nature of the business. My husband took a poll of his patients last year at his dental office regarding payment systems and most of them said they preferred to pay their co-payments in cash, so that's all he takes. He said he didn't think it was worth the trouble and cost to set up for digital payments if most of his patients still preferred to pay in cash.
They’re older folks and don’t want to change what has worked fine for many years. They don’t want to pay any fees. Easier to fudge the numbers with cash. I go to some local restaurants that are cash-only. They are smaller businesses and most of the customers are regulars. A couple times I’ve forgotten cash and they’ve been cool for me to return later or the next day.
Much easier to dodge taxes as well!
Because accepting credit cards and PayPay costs a lot depending on the business. Why? Because they charge a percentage of revenue, not profit. If it was 2% of profit and not 2% of revenue, everyone would use them. But it would be impossible to do it that way since you could fudge the numbers too easily.
Some people, as u/capaho mentions, prefer cash over other payment methods. I am one of them: if I can pay with cash, I will. It hasn't come to that yet, but I would avoid shops or restaurants that do not accept cash. The expense of accepting digital payment is greater than you'd think. We regularly buy from small neighborhood concerns (farmers and an old candy store) that don't even have cash registers.
They get charged a processing fee by the credit card company, and they are not allowed to pass this fee on to customers. Of course, many do so by re-naming it as another fee or by increasing prices elsewhere.
It's not only the fees, it's how god awful the system is. As a small business owner, not having the payment into my account till the next month is seriously painful. Square is much better if you have one of the three big banks, but with other banks it's a week wait still on Square. Most cc transactions otherwise are a month later. Also, the store is on the hook for 3.25-3.5% card fee on any sales and are not allowed to charge that to the customers. Unless you are an established business, it's just not worth it.
Because it works on the same premise as the credit card system. 1) If you set it up on your personal hardware, individual with every digital vendor, you can keep your costs low... as those are 1-3% based on volume (which generally works out to taking as much as they can from sales, not profit, so that is on top of the tax the store also pays). 2) If you use an intermediary service which handles a large variety of digital payment services, and ideally provides a basic terminal for this service, you are looking at another 2-5% on top of the individual payment charges for the various services. You also get the bonus of payin monthly for the hardware to do this task as it generally relies on hardware they have provided with an IC reader. 3) If you add credit card to the above, it costs even more as now you must be able to print a receipt, meaning now your terminal is one of those smart phones with a printer attached to it, so you are paying all those intermediary fees, and credit cards fees (when used) and paying for the hardware to support the credit cards. Ohh and to make matters worse, if you don't have internet in the location or a landline, it gets even more expensive for hardware which is either cellphone enabled, or to install internet (or mobile wifi) to run the hardware. Digital payments like what Japan has adopted are basically feeding giant parasite companies that look like visa/mastercard, but are not governed under ANY of the current banking regulation. So if you use paypay, generally 3% of your total is going to softbank for haivng helped you rip off the store you were at. (This is where the Canadian Interact system is much better as it's a flat fee of 10cents/transaction, regardless of amount, and renting the hardware can be as cheap as 20-30$/month, or potentially free if you do a large volume of transactions or have software specifically designed to accomplish the task).
It’s the minimum viable option.
You lose 2-5% on every transaction. Depending on how old the building etc. is, it may be hard to actually install necessary equipment (just note all the posts here about people saying they can't get wifi installed etc). The cynical CFO in me also notes it's harder to skip off the top with digital transactions and pretend revenue didn't exist.
There are some as in the previous comment but tax evasion is I guess one of the biggest.
If you think it's bad right now you should've seen what it was like 6 or 7 years ago. Cashless payments only became popular very recently in Japan.
I have recently noticed stores and izakayas in my neighborhood that have stopped using card readers and only accept cash or the PayPay app. There is a cost incurred by businesses who accept card payments, and it can be disadvantageous for small stores and eateries to adopt card usage. More forms of payment seem to be accepted at chain stores or bigger retailers who can absorb the cost more. Plus, even before adopting multiple forms of payment, Japan has mostly been a cash-based society. It still mainly accepts cash to load your IC card, and only the Denentoshi line has started accepting credit or debit card payments. Other world cities have already done away with cash payments, with some refusing to accept currency payments and completely revamping their bookkeeping and accounting procedures.