Top secret, self destructing link

[imawino]

Jan 26, 2015 17:05:54 GMT -5 Sum Dum Gai said:

When somebody hands me a card for a small purchase I politely inform them that we have a $3 minimum on plastic. Which is more than fair by the way, the swipe fees are still going to be around 10% on that. I'd say 47.5% of the time they pull out cash and pay that way, 47.5% of the time they add something to the purchase to get over our modest limit. Maybe 5% of them get huffy before doing on of those things or threaten to cancel the sale. The number of people who add items to their purchase to meet the limit far outweigh the number who show any indication of having a problem with it. Nobody has ever actually walked out without buying the items that I can recall, although I have let a few regulars slide on small purchases if they don't have cash.

That's perfectly reasonable.  I've seen plenty of places with a minimum, no big deal.  And if you wanted to switch to all cash, that's a valid (though perhaps not smart) business choice.  What I don't buy is prices going down across the board if swipe fees went away.  That's just not how it ever works.  

[imawino]

Jan 26, 2015 17:37:25 GMT -5 Sum Dum Gai said:

I'm so confused Dark. You say 1) you lose profits on cc... But 2) if there were no swipe fees you'd give a discount, ie. Lower your profits anyway, and 3) actually currently you give the same % discount if they don't use a card... So how are your profits considerably different between the two groups?

I choose to accept the same profit from each group in the hopes of training my customers to use cash. My preference would be a set price and pass the swipe fees onto those that use plastic. I'm barred from doing that by my state legislators. The CC companies know that letting merchants pass the swipe fees to consumers would be the end of everyone carrying plastic.

Why do you care what form of payment they use if you're making the same profit?  Right now you are making MORE money on anyone who hands you cash, and you would like to make less?

[midjd]

Yeah, I'm still waiting to see prices go down now that gas prices have been halved...

[imawino]

Jan 26, 2015 12:28:58 GMT -5 haydentiff said:

imawino, I've given all of the info that I can right now. I know you guys want specific information, especially in regard to security and rewards, but there are many different ways that these things can be approached. VC's in this space are extremely tech savvy. They won't be drilling me with questions because they're trying to understand, they'll be drilling me with questions to make sure I understand. Many of them already have their own teams and ideas for how things should be done. This is all part of agreeing on the "terms" of the funding. There is no point in telling you about the ways we have figured out to offer cash back incentives, if that may never be an option because of who we "partner" with. My updated cv is one of the items that had to be submitted. There is a chance a VC may be gung-ho for Casheer, but take one look at my profile and say "pffft. we don't need her.".

Once we secure funding, we'll build our teams and explain the security architecture very clearly.

The feedback from this thread has been great. I underestimated how much certain groups truly appreciate their credit cards. And that's fine. One app isn't going to appeal to every person on the planet. I'm not dismissing anyone because they are older than 30 (as am I), but it's a fact that the younger generations are more open to new technology. It makes sense to start there. Right now, I can name half a dozen instructors at the community college that I work at that refuse to learn email. I'm sure you can guess what age bracket they might fall into.

I absolutely want to try and think of incentives for the 30 and up crowd to want to use our app. And I don't mind any criticism that's thrown my way because it all helps put together pieces of a puzzle.

I'm sorry that it has come across as fluff but our unwavering, core mission is to provide free payment processing. Period.

Can I ask what message you think you are sending with this response?  Is it the message you want your start up company to be giving off? 

[Deleted]

But you said you give them 4% cash discount... So you'd already make less on cash, no? 

[Deleted]

MIT web.mit.edu/simester/Public/Papers/Alwaysleavehome.pdf

[Deleted]

www.jstor.org/discover/10.2307/2489426?sid=21105709330703&uid=63&uid=3739864&uid=4&uid=3739256&uid=2&uid=2460338175&uid=83&uid=2460337935

vorige.nrc.nl/redactie/next/geld/monopolymoney.pdf

forum.johnson.cornell.edu/faculty/mthomas/VisceralRegulationofVices.pdf

A McDonald’s focus group, as an example, when they decided to take credit cards years ago, they did focus group studies on card users versus cash users. At that time, the difference was 42%. A person using cash purchased 42% less in a fast-food impulse setting than with a credit card. In a vending machine, it’s 178% more that you spend with plastic. That’s a percentage, and it’s a small amount because it’s a Coke and a candy bar, right? It’s not a lot of money. On other things that are more expensive, the percentage drops down, but generally, people spend more. The pain centers of the brain are activated based on MRI studies when you use cash. They are not activated when you use plastic. You feel pain when you spend with cash, so you have a tendency to spend less. That’s pretty scientific. That was published in Carnegie Mellon magazine, study by MIT.

[haydentiff]

How will you protect bank data?

Bank data is stored offline. Likely with some sort of multi-signature implementation.

Are charges reversible if my information is hacked.

If it’s a verifiable hack to our system…yes. We would eat the loss. If it’s just, “I lost my phone and someone accessed my funds because I didn’t setup solid security measures”, then no.


Is there a dispute process?

Only in the case of an escrow transaction. Escrow is an optional feature that merchants can choose to opt in or out of, and users can choose to shop with only those merchants who offer escrow. In the case of escrow…buyer pays…Casheer holds funds…merchant ships and verifies via tracking, etc…buyer receives and inspects, then notifies Casheer that item is as described. Casheer releases funds to merchant.
 Casheer will get involved in disputes based on the requirements of the escrow option.

[Deleted]

Actually there were 3 premises tested in that study. I also chose it for its included background info.

I'm sure you are right dark. People don't buy more with credit cards. 

Now, since you are giving a 4% discount to cash customers, are you making less off them? 

[Deleted]

Thanks for answers tiff. 

[imawino]

Jan 26, 2015 18:20:37 GMT -5 Sum Dum Gai said:

Jan 26, 2015 18:04:49 GMT -5 oped said:

MIT web.mit.edu/simester/Public/Papers/Alwaysleavehome.pdf

You realize of course that this doesn't prove what you think it proves right? All the study subjects are first year college students. They're broke. Both groups valued the items at less than face value, although the group told they wouldn't have to pay cash by 5pm the next day valued them at a smaller markdown. Which makes sense, the students that had only $10 in their wallet and no paycheck coming between the study and the time they were told they had to pay couldn't value the item higher than $10. People don't shop the same way they bid on blind auction items though, especially if those bidders are broke college students that were promised $2 for participating.

Right, only college kids spend money they don't have on credit.  No one else is charging away and paying the minimum each month. LOL.  I did a quick google and got endless results about how if I wanted to save money, leave my credit card home.  C'mon, you know that's a real thing.  here on YM we know that's a terrible way to manage finances - but as a retailer you should be pleased people can spend more than they have.  If they couldn't, you'd be in trouble.  Toys are a discretionary purchase after all.

Don't misunderstand me - I'm not in love with credit cards or the banking industry.  But to get me to switch to a new payment method, it has to give me something better than my current method.  It's not rocket science, despite how complicated the OP wants to make it sound. 

[justme]

Jan 26, 2015 17:24:20 GMT -5 haydentiff said:

Jan 26, 2015 15:36:34 GMT -5 justme said:

They aren't asking for specific details but responding with things like: we'll have the same encrypting banks do for online bill pay, rewards for using the app have been talked about but no specific implementation, you'll have the same protections as a cc if your item arrives damaged or doesn't arrive. So many simplistic answers instead of not answering.

There is NOTHING simplistic about this. There are major changes happening to the current financial infrastructure in the U.S. -and payments are at the forefront. Start following the Federal Reserve meetings while they scramble trying to come up with strategies. They are seeking input from everyone.

I get that things are changing but all those questions are yes/no/I don't know. Not a whole book.

Is the encryption level at least as good as banks? Yes/no

Is cash back like credit cards something that you'll do? Yes/no/not at first/undecided

Are there consumer protections if the paid for item doesn't arrive or is damaged? Yes/no

No one is asking HOW you will they are just asking if this will compete with the services the cc companies provide why their fees.

And I'm quite certain the Fed never talks about cash rewards on cc or whether you get your money back if the item is never delivered so throwing that comment out is at best you missing my and several people's points, and at worst condescending.

[Deleted]

So, not going to answer the question about making less off of cash customers? 

[Deleted]

You are getting the flack because you suggested you dislike the fees because you make less profits. However, this is not true. 

So, PA doesn't prohibit it... Yet I've never been charged one...

[Deleted]

If you don't want to pay cc fees, why do you accept ccs ? 

[Deleted]

Convince more to pay cash so that you can eventually charge them more? 

YOU said you were making the same currently.

YOU said if you could pass on fees you would give the consumer a break... But that wouldn't increase your profits as you currently say you make the same on both sales. So essentially you already pass on the fee...

Now, if you passed on the fee on top, and got rid of the cash discount, your profit would go up... But that's not what you said you'd do... 

[Miss Tequila]

Jan 26, 2015 20:55:47 GMT -5 Sum Dum Gai said:

Jan 26, 2015 20:39:50 GMT -5 oped said:

If you don't want to pay cc fees, why do you accept ccs ? 

No choice. Nobody carries cash anymore. I could insist that everyone pays me with sea shells, but since nobody carries any I'd be out of business in a month. The credit card companies have convinced consumers that plastic is better than cash, and consumers drive business decisions. If the banks convince you all to start using sea shells I'll take those too, and probably complain about it even more. Night deposits will be ridiculous.

So I take it you have always paid cash and shunned credit cards?

I use my credit card to pay for everything. I pay for my $1.90 coffee with credit card! I do pay for gas with cash because the discount I get exceeds my reward points.

If a merchant offered me a discount to pay cash I probably would. But i can't think of any that do

[haydentiff]

Jan 26, 2015 20:02:07 GMT -5 justme said:

Jan 26, 2015 17:24:20 GMT -5 haydentiff said:

There is NOTHING simplistic about this. There are major changes happening to the current financial infrastructure in the U.S. -and payments are at the forefront. Start following the Federal Reserve meetings while they scramble trying to come up with strategies. They are seeking input from everyone.

I get that things are changing but all those questions are yes/no/I don't know. Not a whole book.

Is the encryption level at least as good as banks? Yes/no

Is cash back like credit cards something that you'll do? Yes/no/not at first/undecided

Are there consumer protections if the paid for item doesn't arrive or is damaged? Yes/no

No one is asking HOW you will they are just asking if this will compete with the services the cc companies provide why their fees.

And I'm quite certain the Fed never talks about cash rewards on cc or whether you get your money back if the item is never delivered so throwing that comment out is at best you missing my and several people's points, and at worst condescending

I'm sorry you find it condescending, but whatever changes the Fed decides to make will greatly impact what we can and can't do. New FinCen guidelines put out a couple months ago already complicated things for us regarding money transmitter licenses.

There's no point in answering your other questions because, like I said, once we pair up with a VC many things will change. We may want to offer cash back, but that might not work out with the terms we agree on. I answered previously that escrow will be an option for buyer protection. There is nothing more that I can say at this point because too many things aren't decided. I meant it when I said that I'm not here trying to sell you something. I do not have anything to sell at this point. We have a prototype and a mission -to offer free payment processing.

[haydentiff]

Ok, here is an embarrassing interview that I did at the conference. It's a little painful to watch. I mostly talked about (or tried to talk about) the cross-currency conversion feature of the app. <sigh> My first Toastmasters class is tomorrow.

[Blonde Granny]

Jan 26, 2015 20:55:47 GMT -5 Sum Dum Gai said:

Jan 26, 2015 20:39:50 GMT -5 oped said:

If you don't want to pay cc fees, why do you accept ccs ? 

No choice. Nobody carries cash anymore. I could insist that everyone pays me with sea shells, but since nobody carries any I'd be out of business in a month. The credit card companies have convinced consumers that plastic is better than cash, and consumers drive business decisions. If the banks convince you all to start using sea shells I'll take those too, and probably complain about it even more. Night deposits will be ridiculous.

Really? We do. In fact, I paid cash for groceries yesterday. Our debit card is now only used once or twice a month, the CC much more than that. But if DH had his way, we'd use cash for everything. I will also pay cash for my haircut today.

[CarolinaKat]

Jan 26, 2015 20:55:47 GMT -5 Sum Dum Gai said:

Jan 26, 2015 20:39:50 GMT -5 oped said:

If you don't want to pay cc fees, why do you accept ccs ? 

No choice. Nobody carries cash anymore. I could insist that everyone pays me with sea shells, but since nobody carries any I'd be out of business in a month. The credit card companies have convinced consumers that plastic is better than cash, and consumers drive business decisions. If the banks convince you all to start using sea shells I'll take those too, and probably complain about it even more. Night deposits will be ridiculous.

[Formerly SK]

Jan 28, 2015 10:59:33 GMT -5 Sum Dum Gai said:

Really? We do. In fact, I paid cash for groceries yesterday. Our debit card is now only used once or twice a month, the CC much more than that. But if DH had his way, we'd use cash for everything. I will also pay cash for my haircut today.

OK, very few people carry cash anymore. Most of the people who pay me in cash are kids, teens, or spanish speaking. The unbanked basically. Every once in a while I'll get an english speaking adult that pays for a larger purchase with cash, but they're pretty rare. They usually put larger purchases on plastic and only use cash for little stuff.

As the child of drug dealers, I automatically assume if someone has $150+ in cash in their wallet, they're doing something illicit.  Even all my years on Dave Ramsey's board hasn't shaken me of it. 

[haydentiff]

Jan 29, 2015 0:27:29 GMT -5 Formerly SK said:

Jan 28, 2015 10:59:33 GMT -5 Sum Dum Gai said:

OK, very few people carry cash anymore. Most of the people who pay me in cash are kids, teens, or spanish speaking. The unbanked basically. Every once in a while I'll get an english speaking adult that pays for a larger purchase with cash, but they're pretty rare. They usually put larger purchases on plastic and only use cash for little stuff.

As the child of drug dealers, I automatically assume if someone has $150+ in cash in their wallet, they're doing something illicit.  Even all my years on Dave Ramsey's board hasn't shaken me of it. 

Even with all of my complaints about CC fees, the other day when somebody told me their salon does not accept tips on a CC, my immediate thought was that they were trying to get out of paying taxes on those earnings. Then it was explained that the salon owner had to pay the hair stylest whatever the tip amount was, even though CC fees reduced the amount the salon owner received. The owner has several locations and I guess it really starts to add up.

For anyone wondering, Toastmasters sucked. I went to a meeting in a nicer neighborhood because I was hoping there would be more professional people there. It was mostly older people (55+). They have really weird rituals that were off-putting to me. They start the meeting off with the pledge of allegiance. There was some kind of grand poobah theme going on. So many titles and everybody taking turns using the gavel. The "leaders" that had been there the longest gave speeches and they were just awful -long and lifeless.

I'm signed up for a Dale Carnegie class on Tuesday. I'm really hoping for a better experience.

[Formerly SK]

Yikes!  I've been meaning to do Toastmaster for years.  It never occurred to me it could be a bad experience.