Background: I spent 40 minutes typing up a reply to a different post, but decided that it ran on for too long. I’ll include it at the bottom, but I’m curious to know how much cash is still used in this country.
Certainly, a like-for-like Giro (Europe) system doesn’t exist in the USA, with ACH, checks, and Zelle almost filling the void – albeit incompletely – which I suspect is responsible for the remaining cash utilization. But is that right? Is cash only used for when there isn’t another option? Or is it a matter of consumer preference?
I can understand tipping in cash, or paying for a Craigslist purchase in cash. But maybe I’m missing another dimension? Do some folks pay rent in cash? Or taxes? I’m genuinely curious, but please make sure not to dox your finances in the comments.
My original comment
It’s annoying when they get suspicious of a 25k USD withdrawal for instance (even if you managed to prove the purpose of such a withdrawal, it remains at the banks discretion whether they’ll approve the transaction).
Let’s break this down into multiple points:
- Suspiciousness of a 25k USD cash withdrawal
- Suspiciousness of a $25k USD electronic or check withdrawal
- Necessity to “prove the purpose” of any withdrawal
- Bank discretion and considerations regarding withdrawals
- Necessity of approval by the bank
I don’t believe any of these five points are actually issues. As background, cash withdrawals within the USA are still very commonplace, as the country is fairly rather cash-centric when it comes to businesses, due in part to the lack of a system like Giro (Europe) that has both low, fixed transfer costs and can be sent or received by third-parties. The Federal Reserve’s ACH system requires established relationships between accounts, whereas Giro does not. Debit card systems aren’t a replacement for Giro either. Zelle (USA) is closer, but still isn’t quite as full-fledged. Hence, businesses often deal in cash, pay employees in cash, and consumers pay other individuals in cash (eg buying an automobile).
To that end, for point 1, $25k as a cash withdrawal is not a daily occurrence but it does happen. I can’t really think of ever paying for a private party used car by check, and such a cash-heavy transaction is often performed at the buyer’s bank, so the seller is assured that the cash is good. In this setting, requesting to withdraw $25k cash is ordinary and mundane, if done very rarely. I doubt even prolific car buyers have this problem, but would be open to hearing evidence otherwise.
For point 2, electronic and check withdrawals have even less suspicion than cash, because they always leave traceable evidence. Money laundering concerns are reduced because the entire money trail can be reestablished later, whereas as cash can easily disappear or be “forgotten”. To that end, the suspicion isn’t about the cash amount but the source and destination. Even a $1 million check is not suspicious, if it’s coming from a law firm’s client account to a client’s personal bank account. That is, again, a thing that happens fairly regularly. More down to earth, people can and do pay housing deposits by check, and property taxes are often drawn electronically. When one or both accounts to a transaction is prominent and established, there is a low probability of money laundering.
Point 3 is often though to be an issue, due to confusion about regulations for bank clerks on when to file a Suspicious Activity Report (SAR). Bank tellers are required to follow Federal Reserve regulations that aim to prevent abuse of the American financial system for money laundering. An SAR must be filled in whenever the teller: a) thinks money may be laundered, or b) the transaction is above the bank’s or regulation’s fixed amounts. The latter is often pegged at $10k, so this is where people think that it’s disallowed to withdraw over $10k. This is not correct.
An SAR is something the teller fills in, and to do that, they might ask the customer some questions about the transaction. For the grand majority of people, the purpose is quite simple: cash purchase of a car, housing down payment, loan for a friend. Would the teller know if the customer is lying? Nope, not at all. But the SAR forms part of a trail of records, so that money laundering investigators can trace funds in the future. But note that the clerk can fill in an SAR for any type of transaction, including checks, and don’t strictly need the customer’s truthful answers (or any answers) anyway. An obligation to fill in an SAR does not prevent the transaction from going through. It’s a speed bump, not a stop sign.
As for the actual stop signs, that’s what point 4 covers. A bank obviously cannot allow a withdrawal if it would exceed the customer’s balance, or if they don’t physically have enough cash, or if the withdrawal is not authorized (ie not named on the account, or PIN not known), full stop. But other situations may arise where the withdrawal must be delayed, either for the bank’s own convenience or because the account agreement specifically requires certain holdings times.
I quickly perused a random account agreement for Wells Fargo and the Available of Funds section describes that new accounts (less than 30 days old) will have elongated hold times for withdrawal against newly-deposited funds. This is applied in a first-in-first-out fashion, so only fully-draining the account would incur the longer hold time. In other cases, the bank may take more time but is required to inform you of that, and provide a definite date for when the withdrawal will clear. This verbiage does not distinguish cash vs non-cash, so they’re within their rights to delay a check, as long as they obey their own agreement. If this is not tolerable, find a different bank.
Finally, this also gives us some insight into the default behavior for banks subject to Federal Reserve regulations, which is point 5. A bank may not deny a withdrawal of unencumbered, unheld funds (cash or otherwise), except when the bank has actual knowledge that the withdrawal definitely is for laundering. It is, after all, not their money: it belongs to the customer and they are just the regulated custodian of it. A bank can certainly advise a customer not to fall for a pig-butcherint scam, but they cannot block the customer from obtaining their own money back out. They can, as described earlier, apply a temporary, finite-time hold on the funds, but that’s it.
To my knowledge, there is no Fed-regulated, FDIC/NCUA bank or credit union that requires pre-authorized approval to access a customer’s own funds. I am open to hearing evidence to the contrary, but I don’t believe such a thing exists. How would they even stay in business? To be clear from point 4, a bank can certainly ask for a few day’s notice to prepare $50k in new $2 bills. But that’s easy enough: just call the bank and verbally request the withdrawal, then collect it in-person days later.
Who is disadvantaged by this? Mostly money launderers and con artists trying to abscond with their scam proceeds. But I’d be remiss if I didn’t also mention rich people that prefer to suddenly go on vacation and pay for everything in cash. But the system is designed to be no obstruction to those that plan ahead, or are dealing in such small amounts that it’s not a big issue. Normal everyday people all share the costs of money laundering, so it’s not fair to disadvantage them just so rich people and scammers aren’t inconvenienced by their inability to plan ahead. They don’t even have to plan ahead: just keep a few racks in the safe.
It is to me, frankly, a non-issue to withdraw money for me or anyone in the working or middle class, because the very issue of being “flagged by US banks” just rarely even a speed bump. And the rich folks have private banks that will gladly give them inordinate amounts of cash to spend.
What exactly is the problem here, specifically?
So I am a lot closer to 60 than I like, but hey the only alternative is a lot worse.
Day to day, I never use cash.
The only time I use cash is if it is preferred.
I go to a mom and pop (unfortunately the pop is unable to work anymore so it is just a Mom) dry cleaning place and the credit card fees hurts her bottom line. So I will make a point of having cash for her. I dislike that as I churn points like crazy, but I love how she treats my clothes so I get her cash.
That is a weekly transaction.
Pretty much all contractors (carpenters, electricians etc) prefer cash. Yeah I know why but I look the other way and get them cash depending on the size of the job. The last thing I had to have done along those lines was getting my roof repaired, I have a roofing guy I have used for years and that like 350 so I just paid him cash.
That is maybe a once a year thing.
Personally I find using cash to be a pain in the ass so I have been using plastic predominately for 25+ years.
You could ask some of those guys how they prefer to be paid. My electrician likes Venmo and my house cleaner prefers Zelle. I can pay them instantly like with a credit card but they’re not hit with the fees
I do
Where do you live? If you don’t mind me asking and prying?
I live in the Washington DC and Baltimore MD, metropolitan area.
Thank you for answering that rather probing question.
Here is another one.
Do you keep cash on you, or only if you know it will be needed?
I keep cash on hand.
I’m going to answer my own question.
I don’t keep a lot of cash on me because I have a very bad habit of just giving it all away, everywhere I go.
And I’ll answer as well to keep the train running, even though i wasn’t part of this…
I don’t pay with cash unless specifically asked. I don’t regularly carry cash. If I need to pay cash I get it first that purpose, but usually get a larger amount. I’m a bit more likely to use it if I gave it but don’t refill it when it’s gone, until I’m forced to
It depends on your age and area. The elderly prefer cash and may not have access to cards. Gen-X (people in their 50s-60s) have cards but will still carry and use cash for things here or there. Young people in urban areas almost never use cash. We mostly use tap to pay with our phones. Poorer, rural areas don’t always bother to get the new card readers though, so when traveling in rural areas it’s best to bring a physical card or cash.
Personally I only carry my phone in daily life. My bus pass, student ID, credit card, etc. are all on my phone. The last time I used cash, which was many months ago, the cashier verbally said to me “It’s been so long since anyone has paid cash” and had to ask his manager to show him how to operate the cash register.
I don’t use a lot of cash but that has been the case since I have been eligible for credit cards. I pretty much do not like any other kind of payment except check or cash. To much stuff wants to pull money and that I absolutely do not like. Bill me and I will push the money to you. Actually the basic billpay system at my bank is my second favorite way to pay things. Maybe actually first. Detest things like zelle which just feels like a scam to me. I absolutely wish the bank bill pay system was more advanced. Like I could have a qr code and say bill me here and they could have one to say set us up as a place to pay for with this qr code. When they use it they send a bill and I acknowledge them as a vendor and they go into my space. Then I can download the bills or statements from the bilpay in my bank and authorize payment. It basically works kinda like this but only some things integrate with it. In addition for some reason if you integrate something with it some will basically want to take your portal access directly to the vendor away which I don’t get at all. In the end cash for me is a fallback that I don’t want to go away and that im always prepared to use.
Detest things like zelle which just feels like a scam to me. I absolutely wish the bank bill pay system was more advanced. Like I could have a qr code and say bill me here and they could have one to say set us up as a place to pay for with this qr code.
Does your current bank not do this with Zelle QR codes? At least in my bank’s mobile app, it’ll happily generate a QR code for my account as a Zelle destination, which other people can scan and then pay me. Or they can scan and send me a request, which I can then accept and pay them. I use Zelle precisely when everyone else would use Venmo, because I don’t want yet-another institution to have my bank details, and since Zelle is integrated with my bank, I already have to trust them anyway.
It’s not a bill.com-esque invoicing system, but maybe somebody will build atop Zelle to do exactly that. I will say that tying Zelle to a phone number or email is a bit limiting, though, and maybe one day there will be “usernames” for Zelle, encoded purely in QR codes.
yeah I don’t want the QR to actually pay but more like just a billing destination or payment destination. The way I look at it is they scan it and then it will give my name and address (something they would need to send an invoice so the information is not exactly confidential for a purchase) which they could ask for my id to verify im not like trying to use someone elses. Basically I want a system much closer to the old fashion send you a bill in the mail and you then pay it but with my banks bill pay as the central portal. Many places now don’t want to send phsical statements in the mail but also don’t want to send pdfs of statements by email so being able to get all your bills pdf in one place would at least be not so bad. The idea of logging in every month to every vendors portal is just annoying. I always compare it to companies back in the day rather than sending the statemnent each month would send postcard saying. hey come to the office and pick up a statement.
They’re trying to remove cash, and make it a cashless society. Not so much in Small Town USA, though.
People are moving away from that fiat nonsense more and more.
Less than they should be. In the last week I’ve been told “we are cashless” by three separate locations in Seattle. This is objectively asinine and I tell them as much.
Because using cards is “seamless,” most people opt for that over cash. Cards don’t mean credit. Often it’s debited from your bank. Usually there’s an added transaction fee, which is why it’s so common.
A $1 fee is accepted by most people as nominal. Rinse, wash, repeat millions of times per day, financial institutions are raking it in.
U.S. dollars literally say “this note is legal tender for all debts, public and private.” That sounds to me like a cashless business should be illegal.
Until you have received the product or service, there is no actual debt. They don’t have to serve you if you won’t pay cash, don’t have to let you walk out of the store with merchandise, etc.
Arguably at a sit-down restaurant where you’re ordering and being served before you pay, then there is a debt and they may have to accept cash payment
But, and I’m not a lawyer so take this with a big grain of salt, I think it’s still their right to only accept payment in whatever form they want to, you’re effectively agreeing to their rules when you choose to patronize their business, and the thing about it being legal tender only really comes into play when they get the courts involved to collect on that debt- if you refuse to pay with electronic payments, gold coins, crypto, shiny beads, or whatever they insist on, and they take you to court over it, then they have to accept cash to settle that debt once that’s all sorted out.
Try making that argument to a minimum wage worker while there’s a line of people waiting for their frappufuccinos, cards and phone-taps in hand. I just walked out and told them the rule was absurd. Plenty of other small businesses in town that accept cash - I just wanted to try the new bagel place that popped up by my house.
Sadly, they cater to the Amazon/Google/Meta crowd that live in the area - not sensible humans.
In my personal, anecdotal experience?
Over the last 2 years, I have seen a sharp uptick in cash transactions as more and more people become poorer and poorer in the western US.
Prior to that, about 30% of all transactions were cash basis for about 10 years.
Before that, at least 50% were cash.
I am probably very late to the game but I think I might take the meager cash liquidity I have and convert it to precious metals. Steel and flour.
The only time I ever touch cash is when I buy weed, since the dispensary isn’t allowed to accept card payments. They have an ATM inside though, so I take the cash out of the ATM, and bring it to the counter. It spends maybe 2 minutes in my possession.
I’m not in a legal state, but yeah 98% of my cash goes to my plug
I like using cash. It’s anonymous and keeps the value more locally. Sometimes you can get cash discounts. It’s so nice to use at a bar so you don’t have to close your tab at the end. Sometimes it’s not convenient or I’m just not carrying enough. But I always carry cash and use it when it’s not too much of a hassle fire me or whoever in giving it to.
But overall, I don’t see too many people using cash these days, besides older people, and some tipping. I think everyone should only tip in cash.
It depends on where you are. Some communities operate mostly in cash. Other communities use other methods.
For example, when I am on rural agricultural communities, the local taco wagon is often cash only. The one in larger towns or cities almost always accepts card readers and now phones.
Larger amounts (more than $5,000) are usually checks and occasionally ACH or bank wire. Checks are free however so it is by far the preferred method.
In my small business I accept cash, cards, phones, ACH, International Wires,and checks. It all gets a little confusing at times. I highly encourage checks or cash because they have no fees.
I thought ACH transactions were typically free too, hence why large transactions typically use them.
Depends on where you are. In Europe they are free and checks have a surcharge.
In the U.S. they generally charge a small fee or do other shenanigans. Example: Intuit puts the money in a holding account for 5-7 business days before delivering (guess who keeps the interest).
If sending an international ACH there is always fees even if they are hidden in the exchange rate.
I generally don’t use cash for anything.
However, I do purchase from farmers’ markets or local artisans fairly regularly. For the most part, they can take card via a cell phone-connected device, but there is also an understanding that they have to pay a percentage of the sale to the credit card company. I, and I think other regulars, often carry cash for these occasions.
Venmo and similar apps are another option, but they also want a cut if it’s a business sale, so some sellers prefer to steer clear of them as well.
For me it’s cash tips or for art like at comicon. Basically anywhere I don’t think Uncle Sam needs to stick his greedy fucking nose
I find it odd that many of the same people who don’t like large corporations, like Visa and MasterCard are, are also the same people who despise using cash.
Every single transaction you use your card, visa and MasterCard gets a percentage of from the place you just spent your money.
You’re enriching those corporations by simply spending your money somewhere when you use their cards.
cash is disgustingly filthy and basically only good for criminal transactions
As waitress, I hate dealing with it — making change takes a lot of time and breals up the flow of service. At a good restaurant the hand sinks are placed well enough that washing hands after is pretty seamless, but I’ve worked at shops where I had to run all the way back the the dish pit after every cash transaction. And the worst part is the knowing winks like “I know you prefer cash” with the implication I’m a tax cheat. Fuck you, asshole! You’re just making more work for me! Now I have to log this myself and report it separately from my W-2s.
And the worst part is the knowing winks like “I know you prefer cash” with the implication I’m a tax cheat. Fuck you, asshole! You’re just making more work for me! Now I have to log this myself and report it separately from my W-2s.
Nice comment, now the government is off your back 😉
Sadly, not prevalent enough.
A lot of younger folks are happy not to carry cash and to have a 3rd party payment processor in their pocket until they die. Carrying cash is too cringe for them.
Many older people, or people with privacy concerns, carry cash.
Compared to either Europe or Eastern Asia, extremely few people carry cash.
In the area I live, I see more people paying for stuff with cash than a card or phone.
As a weed enjoyer, the only thing I really use cash for is the dispensaries, since they only accept cash.
