Attack of the Plastic People

illustration/The Fuge

Attack of the Plastic People
The financial industry’s assault on working-class Mainers intensifies

by Chris Busby

The precursor of the classic board game Monopoly was The Landlord’s Game. Developed at the dawn of the 20th century by Elizabeth Magie, a devotee of the writings of 19th century political economist and reformer Henry George, The Landlord’s Game was intended to be more educational than recreational — a “practical demonstration of the present system of land-grabbing with all its usual outcomes and consequences,” Magie, an anti-monopolist, explained.

The “usual consequences and outcomes,” of course, are the financial ruin of every player save one, who becomes fabulously wealthy through a combination of dumb luck and ruthless greed. Now marketed, accurately, as “The World’s Most Popular Board Game,” Monopoly has long been considered a pastime, rather than a “practical demonstration” of the theory that private ownership of land is the root cause of inequality. But the game’s lessons remain relevant and have evolved to reflect the latest financial trends.

Ten years ago, Hasbro, the multinational gaming and toy company that acquired Monopoly (and its then-publisher, Parker Bros.) in 1991, released an updated version of the game, called Monopoly Electronic Banking, that replaced all the iconic Monopoly money with a Visa-branded debit card. The newest version of that edition, released last year, is called Monopoly Ultimate Banking. In both versions, players insert bank cards into a machine to do everything they used to do with the game’s multicolored currency: buy properties, collect rent, pay taxes.

Say what you will about the virtues of a game that compels children to adopt the mindset of Donald Trump, at least the classic version of Monopoly gave kids a visceral appreciation for the value of money and made them practice basic math. In the new Banking editions, money is not a physical thing you stack on your side of the board; it’s a number stored in a machine that tells you how much you have. The player who used to be the “banker” has lost that job, replaced by this battery-powered gizmo called the “Ultimate Banking Unit.”

Numerous rule changes have also been made in the new editions to speed up gameplay. For example, if you land on an available property and don’t buy it, that automatically triggers an auction by which other players can snatch it up. “The stakes [rise] quickly and the downward spiral towards bankruptcy becomes inevitable,” a reviewer in the U.K. observed. (Perhaps to mitigate the harshness of Monopoly Ultimate Banking, the game ends when the first player goes bust; the player with the most wealth at that time is declared the winner and need not grind all the remaining players into utter destitution to claim victory.)

Hasbro considers Monopoly Ultimate Banking suitable for children ages 8 and up, but parents familiar with the dangers and downsides of using credit and bank cards may not deem this edition “fun for the whole family.”

If Ultimate Banking were a truer representation of today’s economy, the Ultimate Banking Unit would win every time. That’s because every time a property was purchased, or rent or tax was paid, the unit would take a cut. Players who failed to maintain a minimum balance would have additional fees automatically deducted. And all manner of frauds and hacks and other fees buried in fine-print contracts would decimate the players’ accounts without their knowledge and in ways well beyond their understanding.

Monopoly Ultimate Banking reflects the transition now underway in the real world from a cash-based to a card-based economy. The winners in this competition are the big banks and credit-card companies. The losers are retailers, especially small-business owners, and consumers — which is say, you.

The financial perils of using credit cards have been painfully apparent to Americans since the 1970s. That’s the decade when workers’ wages stagnated and families began trying to compensate for the loss of income by relying on this newly available form of extremely high-interest borrowing — often with catastrophic consequences. The problem has ballooned ever since. According to a recent report by the Federal Reserve, Americans collectively had $1.021 trillion’ worth of credit-card debt in June of this year, which topped the record level of such debt amassed in April 2008, at the advent of the Great Recession.

photo/Chris Busby

An even more nefarious trend is emerging in cities like Portland as the transition from cash to cards continues. Ready access to acres of prime downtown real estate, from One City Center to Thompson’s Point, has been effectively denied to drivers who don’t carry plastic, because the “public” parking lots and garages are “managed” by machines that don’t accept bills or coins. Last December, a café opened in the Old Port that only accepts credit and debit cards — your greenbacks are no good there. And a café in the West End has been adding extra fees to purchases processed on one of those sleek new Internet-connected point-of-sale systems that are quickly becoming ubiquitous, opening yet another shady avenue for fraud that customers must now be vigilant to detect every time they buy anything. [See sidebar at the bottom of this post.]

Credit and debit cards are not inherently evil. Used responsibly, the convenience and efficiencies they offer can be a boon to working people. But when their use becomes mandatory — a goal being actively pursued by a growing number of corporations and governments — they screw people over en masse. The fees they impose amount to a secondary, private tax on retailers and their customers. They make everything — from a cupcake to a patch of asphalt — more expensive without adding any value. And they effectively exclude a significant portion of the populace from a growing number of public places and businesses, fostering a type of economic segregation that’s almost as ugly as racial segregation and, by no mere coincidence, tends to affect the same groups of people.


Credit Rules Everything Around Me

The bank cards in Monopoly’s Banking editions no longer bear the Visa brand, probably because they don’t have to. The corporate behemoth already has what amounts to monopoly power.

As Olivia LaVecchia, a researcher with the Institute for Local Self-Reliance (ILSR), notes in a paper published this summer, almost 60 percent of all credit- and debit-card purchases in the U.S. were made with a Visa card last year. Visa’s erstwhile rival, MasterCard, handled another 25 percent of all such transactions in 2016, “meaning that just two card networks now have a near lock on the market,” she wrote.

The “swipe fees” business owners pay to the credit-card monopoly, banks and processing companies for the ability — nay, the necessity — of accepting this form of payment average about 3 percent of their total revenue, ILSR found in a survey. Big companies have more leverage to negotiate lower fees, so they retain a higher percentage of their earnings. Independent mom-and-pop operations get the shaft.

Bob Wirtz, owner of Enterprise Records on Park Street in Portland, put that cut in perspective. “It’s like at the end of the month … if the credit-card processing company went through my books and picked out a slightly better-than-average sales day and just kept that money,” he said. “And for what?”

The use of bank and credit cards has become so common that business owners were forced long ago to raise prices across the board to offset those fees. That means cash-paying customers pay more for a convenience others enjoy. Some small-business owners in Portland offer an informal discount to customers who pull out bills at the register. Others set a minimum of $5 or $10 for credit-card purchases, because otherwise the fees would make small sales unprofitable.

At Enterprise Records there’s no informal cash discount and the card minimum is more like $20. “Some people, if I see them with any regularity, I give ’em real shit for pulling out a credit card,” Wirtz said. “‘Hey, man, if you’re gonna come in here, make sure you got twenty bucks in your pocket. And if you spend more than that, then maybe we can talk about the card, but otherwise nevermind.’

“It’s all about the principle of the thing,” Wirtz continued. “It’s the creeping corporate takeover and people just thinking, ‘How else would I do it?’”

Even the most radical anti-capitalist may be ignorant of the fact that paying with plastic further enriches the one percent at the expense of everyone else. When the Occupy Wall Street protests were happening in Portland six years ago, “there were a lot of people here from out of town, and a lot of them were buying records and they were all using debit cards,” Wirtz recalled.” “I’d call ’em on it every time and it was like a deer-in-the-headlights kind of look, like, ‘Oh, man, yeah, you’re right.’ No connection.”

An amendment passed by Congress in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act empowered the Federal Reserve to limit the debit-card-transaction fees businesses pay. But as Forbes contributor Paul Paradis wrote in a post for the magazine last spring, because the so-called Durbin Amendment only regulates debit-card transactions, “credit card interchange [swipe] fees have skyrocketed to offset the loss of revenue from debit cards.” And in her recent paper, ILSR’s LaVecchia notes that the Dodd-Frank cap is “twice as high as the level initially recommend by the Federal Reserve.”

The European Union has capped credit-card-transaction fees at .3 percent and debit-card fees at .2 percent — “about one-seventh of the rate that U.S. businesses are charged,” according to LaVecchia. She further observed that though Visa and MasterCard claim their high fees are necessary to process payments and prevent fraud, the Federal Reserve found that those processing costs amount to just a nickel per transaction.

A cap on credit-card-transaction fees in the U.S. would have saved business owners over $22 billion in 2012, according to one study cited by ILSR, and three-quarters of merchants support capping credit-card swipe fees the way debit swipe fees have been limited. “But despite their numbers and economic importance, these small businesses haven’t gotten far with lawmakers — in large part because the credit card networks and big banks wield more political power in D.C.,” LaVecchia wrote. “Their sway is such that The Capitol Forum, a subscription news service covering competition policy, recently added Visa and Mastercard to its list of ‘Top 5 Politically Safest Monopolies.’”

Visa and MasterCard aren’t content to wield the plain old monocle-wearing, robber-baron-style monopoly power over businesses and their customers. They want the Ultimate Banking version in which everyone, everywhere in the world, pays for everything with one of their cards while they take a cut on both ends of the transaction.

LaVecchia begins her paper — titled “Visa Wants to Rule How We Pay for Purchases. But Its Market Power Has a High Cost” — by citing an initiative Visa launched last July. The corporation is offering restaurateurs and other food vendors up to $10,000 to upgrade their point-of-sale systems, but in order to qualify for the help they must agree to stop accepting cash money.

“The initiative was the ‘opening salvo,’ as one Visa executive put it, in the credit card company’s plan to increase its market power by eliminating cash,” LaVecchia reported. She quotes Visa CEO Al Kelly, who recently told investors, “We’re focused on putting cash out of business.”

Visa and MasterCard are members of the Better Than Cash Alliance, a “global partnership committed to moving from cash to digital payments in order to reduce poverty and drive inclusive growth,” according to its website. This unholy alliance also includes the Bill & Melinda Gates Foundation and the Clinton Development Initiative (part of the now infamous Clinton Foundation), as well as the United Nations Secretariat and the governments of over two dozen countries, mostly impoverished, war-torn or “developing” nations like Afghanistan, Ethiopia and Vietnam.

What would it be like to live in a cashless society where you need a bank or credit card to conduct the business of daily life? Portlanders are already getting a taste of that future, and to many it tastes like a shit sandwich.


“Not rock and roll”

Baristas + Bites is a café that opened last December on Fore Street, in Portland’s Old Port. It sells sandwiches and salads and pastries, like its signature “Kupcakes.” Owner Amy Alward previously operated a stall at the Public Market House in Monument Square for this business, called Love Kupcakes, and still has a food truck with that name.

Although no single item at Baristas + Bites costs more than $10, and a small coffee costs only a buck, you can’t buy anything with cash. The café is a credit-and-debit-card-only business.

During an interview at the café last month, Alward told me she read an article in the New York Times a year or so ago about a Scandinavian country that was experimenting with a cashless economy. “I was really fascinated with the fact that it helps with crime, and the fact that it helped with process, it helped with accountability, streamlining accountability, [and] reporting tools, and I thought, ‘You know what? That sounds really, really interesting and I’m gonna try it.’”

I asked Alward if the fees she now must pay for every transaction were a drawback. “I look at it as the cost of doing business,” she said. “I’m a business person, I’m a numbers person, and the way I look at it is, OK, so I’m paying up to four percent for these fees, [but] the reality is that I’m probably saving at least that on [not] having a manager run back and forth to the bank to make change, to proof the drawers, to count the money.

“I’ve dealt with cash for 35 years,” she continued, “and once you start counting cash and you’re dealing with lots of cash, it becomes a situation where you’re having to get more cash, deposit cash, transfer cash to coin, and it’s very labor-intensive.

“And one thing I love is the cleanliness of no money,” Alward added. “I mean, plus storing money. So the safety for my employees … on soooo many different variables it’s a plus, plus, plus, win, win, win for me.”

I asked Alward what the response from customers has been like so far. “Ninety-nine percent think it’s really interesting,” she said. “They’re fine with it. We get the one percent [from whom] we might get a complaint on our point-of-sale system.”

Is Alward concerned that her policy effectively bans people without credit or debit cards from patronizing her business? “Gosh, I haven’t run into that yet,” she replied. “We have people who say, ‘I don’t have [a card] on me,’ and then they’ll bring it to us” later.

“We have had homeless people in here,” she added, “and we just give ’em a sandwich and a coffee.”

My informal poll of people who live and work in the neighborhood indicates that more than 1 percent are pissed off. In fact, I first heard about Baristas + Bites from the proprietor of a small shop who was outraged by the policy and vowed to never return.

Jim Baldi, who works at The Bar of Chocolate, on Wharf Street, told me about his experience at Alward’s café. “I went in and the coffee was good, the prices were fair, the people were pleasant, and I went to give [the cashier] some money and I thought she was joking with me — she told me she doesn’t take cash.” Baldi had a debit card, so he used that, but he told the barista, “‘This is not a personal issue with you, it’s just a business thing. I’m not coming here ever again.’ She’s like, ‘OK.’ I guess she heard it before. It didn’t matter.”

“It’s very elitist to say you can’t use cash,” he added. “It seems like a way of screening out your clientele.”

While researching this article I saw a social-media post by Bruce Merson, who plays drums in the Portland band Nuclear Bootz and lives up the street from the café. “Well, I go into Baristas and Bites today for a lovecupcake and a coffee … with money, green cash,” he wrote [some punctuation has been corrected here]. “We don’t take money, only debit and credit cards, they say. Oh, I say. That’s not rock and roll. It’s yuppie. If you look outside [on the sidewalk board] it says nothing about not taking cash. … It’s [a] yuppie, brainless, business-turd way of doing things. It’s not right.”

Merson is among the nearly 10 percent of Americans who are “unbanked” — they don’t have a debit or credit card. As Lisa Servon, author of The Unbanking of America, has documented, there are many valid, rational reasons — aside from the usurious interest rates and risk of identity theft — why even people of means choose not to carry plastic.

A few years ago Servon worked at check-cashing/payday-loan businesses in California and New York to better understand why people were using a service that’s generally considered too pricy, if not downright predatory. Customers cited the fact that, unlike most banks, the check-cashing place clearly displayed the fees it charged, which makes it easier to keep track of one’s finances and avoid overdraft fees. It also gave people access to their money the same day they were paid, which is a big deal for workers who live paycheck to paycheck — about half of all Americans these days.

Rising (and confusing) fees imposed by banks have greatly contributed to the explosive growth of the payday-lending/check-cashing industry over the past couple decades. In addition to the 25 million who are “unbanked,” another 68 million Americans were “underbanked” in 2013, according to Servon: “they have bank accounts but also rely on these sorts of alternative financial services,” she wrote in a 2014 op-ed for the New York Times. “Meanwhile, policy makers continue to insist that we all need bank accounts.”


What’s not in your wallet

Policymakers in Portland appear to be headed down that road. In 2012, the city began replacing its coin-operated street meters with solar-powered, Internet-connected parking “kiosks” that accept credit and debit cards, at a cost to local taxpayers of about $10,000 each. But as I wrote in a 2012 column for the Bangor Daily News, that’s just the down payment.

City parking director John Peverada told me at the time that the monthly wireless-service charge for each parking robot was $45. The city now has 93 kiosks, which works out to a wireless bill of over $50,000 annually. In addition, Peverada said the company that processes card payments made at the new meters took, on average, 10 percent of all that money. Total revenue from parking fees (excluding tickets) has grown from 2.1 million in 2013 to $2.6 million in the 2016 fiscal year, according to the Portland Press Herald.

Some of that additional half-million bucks was undoubtedly the result of more people parking downtown, but I suspect much of it was the result of the fact drivers can no longer save some change by pulling into a metered spot that still has time left. With the kiosk system, everyone’s on their own. And because there’s a one-hour minimum if you pay to park using plastic, plenty of people running short errands have grossly overpaid for public parking for the “convenience” of not keeping coins in the cup-holder.

The city raised parking rates this summer, in part to pay for the rollout of a cell-phone application that will enable people to “feed” meters remotely, though the two-hour limit still applies. City leaders’ gee-whiz obsession with kiosks and apps results in de facto surtaxes its poorest residents can ill afford to pay and technology they can’t afford to use.

So, to summarize, street parking in Portland has become more expensive for drivers and taxpayers, much more complicated, 100-percent less secure (coin meters can’t be hacked) and a hell of a lot less “convenient,” as anyone who’s had to march halfway down a block and back in rain or snow to use a kiosk can attest.

But at least the city kiosks still accept coins. (And public parking garages still accept cash; some private garages, like the one at One City Center, are now card-only.) That isn’t the case at the dozens of private parking lots managed by Unified Parking Partners, a company whose popularity among locals and visitors ranks lower than that of syphilis (at least the latter means you actually, rather than figuratively, got fucked).

UPP seemingly came out of nowhere a few years ago and has quickly attained a monopoly position in Portland’s private-parking market. Complaints about the company’s practices have been constant — confusing signs, outrageously high rates, aggressive booting and towing of vehicles, etc.

Because UPP kiosks only accept credit and debit cards (or payments made via an app, which also requires a card, plus the resources to buy and maintain a smart phone), the poor and unbanked are unwelcome everywhere it does business. In August, I was shocked to discover that Thompson’s Point, the hip new development just south of I-295 in Portland, had become UPP’s latest conquest.

illustration/Mike Lewis

I’d driven there to conduct a 15-minute errand and had no choice but to pay UPP $2 for an hour of parking (the minimum at the time) using my bank card. Unlike city parking, which is free on Sundays, holidays, and after 6 p.m., UPP demands payment on the Point 24/7/365. I looked at the wooden statue of Bigfoot standing outside the Brick North complex and daydreamed about what he would do in my situation.

I knew that the developers of Thompson’s Point, Chris Thompson and Jed Troubh, are reasonable people committed to making their development accessible to all [see “That’s Our Dump,” Nov. 2016], so I contacted Thompson and the pair agreed to meet with me to discuss the situation.

They made some good points. It is expensive to build and maintain parking, and patrons who drive to the Point would have to pay for that one way or the other — either via meters or increased prices at businesses (like Big J’s Chicken Shack or Bissell Brothers Brewing Company) whose rent was made more expensive to help pay for that infrastructure. Thompson and Troubh decided meters were the better option. As Troubh explained, “If you bike there or walk there, you are effectively paying less for your beer or your chicken. Or if you come with five people in the car versus one, you’re paying less. So there is a real incentive to do it this way. Fundamentally we believe in trying to incentivize these other uses and to dis-incentivize single-occupant-vehicle use down there, for a lot of reasons” — including traffic, pollution, and the ugliness of big parking lots.

The developers also made a key point about UPP: it’s just a contractor; it doesn’t set policy at the lots it manages — that’s up to the property owner. Thompson and Troubh said the rules they set for UPP’s management include no booting, towing only in egregious cases, and an hourly rate ($2) that’s almost double the city’s rate, but well less than half the rate at most UPP-managed lots.

The pair acknowledged that they had not considered the issue of how card-only kiosks exclude the unbanked, and have since directed UPP to install a kiosk at Brick North that accepts cash (bills only, no coins; UPP claims coin-operated meters get broken or vandalized too often). They also agreed to halve the minimum time required to park from an hour to 30 minutes, and have since put up the signs indicating the handful of spaces reserved for people like me who are just running in and out on business (those spots are safe for sixteen-and-a-half minutes).

So I’m happy to report that the Thompson’s Point square on the Portland Monopoly board has become a little less expensive to land upon. But the old Landlord’s Game is still rigged against workaday players, and these days there’s no Free Parking to be found.

A “Square” Deal?

In July, a reader named Marc contacted us about a “unique transaction” he had when he bought lunch at Aurora Provisions, a gourmet sandwich shop in Portland’s West End. “A large number of surcharges” were added to the price of his wrap, Marc wrote, “WITHOUT any disclosure.” They included a 5.5 percent charge for “RETAIL,” an 8 percent charge for “LABOR,” another 8 percent for “ONPREM” (on premises?), and more.

“When I mentioned the tax seemed high, they pushed back and said Maine’s restaurant tax is what it is,” said Marc. “I expressed surprise, and the cashier in a curt manner called someone else over, who accessed a back-end screen that showed six iPad toggle slides all turned to *on*.”

“’Oh, all the taxes must be turned on,” this employee said to the cashier. “He slid them off, told me my new amount, and they both walked away without a word.”

When Marc mentioned this on Facebook, a friend of his posted her receipt from Aurora, showing several of the same mysterious surcharges. I’ve since heard of additional occasions when this has happened to people in the neighborhood.

I contacted Aurora owner Melissa Carr, who took over for longtime proprietor Marika Kuzma last June. Carr passed my request for comment along to manager Liz Koenigsberg, who responded via e-mail. “I can let you know this was a error in programing by our POS [point-of-sale] company square and has since been corrected,” Koenigsberg wrote. “We only apply the normal 8% sales tax to bills and there are no other surcharges applied.”

So, Square, the giant Silicon Valley-based payment-processing corporation, erroneously programmed Aurora Provisions’ iPad register so it added extra charges to customers’ bills? This was the first of many questions I had for Koenigsberg, but she declined to discuss the matter in person (she said she was too busy), and did not return a phone message seeking comment.

I went to Aurora in September and paid for a sandwich and coffee with my bank card. The only surcharge was the 8 percent “ONPREM” charge, which in the common tongue is called “tax.” Perhaps the “error” really was corrected, but who knows how many people were overcharged before that? Granted, a glance at even one receipt should have alerted staff that something was wrong.

The incident is yet another example of how the “convenience” of e-business must be accompanied by a hyper-vigilance applied to every purchase to catch “errors” by scammers and hackers who can screw you out of a buck or screw up your credit for years.

— C.B.