I remember reading a comment here a while back about merchants being offered a discount on the processing fee if they also transmitted detailed data about the purchase (essentially the data that would be on the receipt). That data could then be resold on to advertisers. Does anyone remember this or have links to more data? (Not having much luck with search, maybe I'm hallucinating the whole thing.)
Level 2/3 data: https://docs.adyen.com/payment-methods/cards/enhanced-scheme...
It's only available in the US, many countries have lower interchange fees and prohibit sending this data.
Importantly, there is only an incentive for L2/L3 data on business/corporate cards, which have an inflated interchange rate above personal cards anyway.
This is not a scheme to get enhanced targeting data for personal transactions.
I believe most prepaid visa gift cards are being monetized in this way. https://www.walmartgift.com/AcctMgmt/Controls/WalMartGiftCar...
Ive heard of casinos trying to pay out winnings using some kind of prepaid card, where theyd also get info about how people spent their casino winnings. Lots of ways to leverage that data.
Also available in Canada now!
I would love if it was transmitted to the bank for my own use so I can easily remember what I purchased or run budgeting software against it! Obviously wouldn't be excited about it being resold tho.
It's crazy it is resold but we don't even get it for our own use. Budgeting with credit card statements would instantly become so much more useful with less effort.
Just provide Plaid your login credentials to your card account /s
How does that help if the bank doesn't have the data?
It does, at least in some cases. When I book flights directly from an airline, the bank knows the name of the passenger, the date of the flight, the origin and destination airports, as well as the cabin class. For one bank (Chase), the information is printed on the statements; for another they have a web lookup tool.
Flights are one of the very few cases where this happens automatically though the card providers systems. It's called L2 data, and it's sent a little while after the transaction goes through.
the main purpose of that data is for fraud detection, anything downstream (i.e. selling it to advertisers) is just the cherry on top. Merchants are always financially incentivized both implicitly and explicitly to do anything that would reduce fraud and increase the rate of successful authorizations.
This would explain why so many damn coffee shops dont deal with cash now - the double as a coffee shop and data reseller
Well, they still pay a fee, it’s just reduced.
They primarily don’t deal with cash because cash is a pain. It needs to be physically taken to a bank and protected from theft by both staff and random robbers with guns, it needs to be counted all the time, and you need to maintain the right denominations to make change.
I have reservations about businesses getting rid of cash, especially if they’re turning away people who don’t have alternative ways to pay, but I certainly understand why they do it.
It’s also always awkward when a coffee shop is like 95% credit, and you try to hand them cash and they look at you like you’re Rip Van Winkle.
Also anyone handling cash is supposed to wash their hands before handling food, unless perhaps they're using tongs or something. Ideally an establishment dedicates one person to the register, but with the cost of labor that can be expensive without enough sales volume.
Yes, cash is also physically dirty!
Another advantage of credit cards is you normally don’t have to touch anything customers bring into the store, since they can tap their own cards. You probably still should wear gloves to handle food and take them off or switch them to work the computer.
Merchants aren't going cash only to sell your data, they're doing it because it's expensive to handle cash and makes their taxes a whole lot more troublesome too.
Not to mention the crime risk of cash
Huh, I thought accepting legal tender was a federal rule, I guess not. Looks like a salad variety of regulations that vary by state and city.
> Huh, I thought accepting legal tender was a federal rule, I guess not.
I think the key word is debt when bills state "for all debts, public and private." (And a couple more categories under the law. [0])
At the moment you're asking for the drink, you are not in debt to the coffee shop, they're setting a precondition on an exchange. [1] Now, you might have a case if they let you run up a tab...
[0] https://www.law.cornell.edu/uscode/text/31/5103
[1] Yes, there are a positive number of milliseconds where somebody owes somebody something, but pedantic software intuitions don't always apply to law, and overall that's a good thing.
Note the wording on dollar bills:
> This note is legal tender for all debts, public and private.
See also USC §5103:
> United States coins and currency [...] are legal tender for all debts, public charges, taxes, and dues.
Thus a private person is only obligated to accept cash as repayment for a debt, not for purchases.
Well technically, all debts denominated in cash must be able to be settled with cash.
Companies simply get ahead of that law by refusing to provide the service or good.
Works in retail bc at the till they can just say 'no cash no business deal'
Doesn't work in other ventures so easily.
It is along the lines of 'we reserve the right to refuse business to anyone'
I don't think this is the reason, cash will always have no fees. In some senses it can have negative fees if you're not very diligent with your tax reporting *wink wink*.
Not accepting cash is probably more to do with not wanting to deal with it, not needing to trust employees with it, keeping poor people out, and preventing robbery.
Credit card companies and banks know basically squat about your purchase except in certain circumstances (buying gas or flights causes more data to follow, called L2 or L3 data), or if they work with a data enrichment provider. There is a lot of action in this space right now, but the banks are hardly equipped to handle more data even if it became available.
I mean, cash is also expensive in its own way. It has to be handled and insured, coins may need to be rolled before being taken to the bank, a register is a mechanical device to power and maintain, petty theft by employees is a concern.
It's not really that hard to see why a business charging $5-20 per transaction from people who all have phones and credit cards anyway might choose not to accept cash.
> a register is a mechanical device to power and maintain,
surely a million times less expensive than a subscription to a POS....this is not a strong argument.
if you cut out all the other details they mentioned I guess. how much do you think taking the cash to the bank weekly costs?
Nothing, because the owner is rejoicing every step of the way.
I'd say employee theft is the only reason a coffee shop would be "no-cash", and fear of robbery in a few places.
You think the owner is taking the cash to the bank?? Unless they are an one-person operation, they likely have an employee do it (among their other duties).
Coffee shops don’t qualify for l2/l3
Level 3 data.