Cash makes a comeback

In an article published on June 3, 2019, entitled “Hitting the Brakes on the Cashless Society,” payments risk expert Claire Greene analyzes the pushback against cashless systems taking place in various states and municipalities throughout the country. Greene builds off of the research of Oz Shy, who drew his conclusions from the 2017 Diary of Consumer Payment Choice. The research uncovered about consumers who do not have access to credit and debit cards showed that they tend to make the majority of their payments in cash and that they are more likely to be on the lower end of total household income. Interested in looking for cashless alternatives for individuals who do not have access to credit or debit cards, Shy examined the possible usage of prepaid cards. However, Shy’s eventual conclusion did not change even after factoring in the usage of prepaid cards:

A complete transition to cashless stores imposes a measureable burden on consumers who do not have credit or [nonprepaid] debit cards.

In recent months, cities such as Philadelphia and San Francisco have introduced or will soon introduce legislation that bans cashless stores or requires brick-and-mortar stores to accept cash as a form of payment. Greene points out that her home state of Massachusetts has made it illegal for businesses to not accept cash since 1978, while the state of New Jersey banned cashless restaurants and stores recently in March 2019. This current trend of legislative proposals protecting the use of cash is, according to Greene, “predicated on the idea that people without access to payment cards or digital payments are harmed when they cannot make purchases using their payment instrument of choice: Cash.” However, it should be noted that businesses are also harmed when their customers are not able to pay in the way that they wish to, because having a customer that is not able to pay in the way that they choose is almost as bad as not having a customer at all. Cashless businesses are losing potential revenue by limiting their market only to those who have credit or debit cards.

Green concludes that cash is still very important to certain consumers and that the idea of implementing a cashless society “could be on a collision course with reality.”
To read Claire Greene’s entire article on the website of the Federal Reserve Bank of Atlanta, please click here.

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Comments

  1. KEITHSTER says

    Had to ask the Wallmart lady for a piece of tape yesterday she said she did not have any then asked why? I told her My card had broke in half and if I stuck it in I wound not be able to get it back well she went and found some and all went fine. Then I told her thanks and otherwise I would of had to stick it in one dollar at a time as I get tips money and always have pocket fulls of dollars but never that much fun one dollar at a time. So it pays to always have both on you? Well Good Luck All ‘”>”>”>”>”>”>$$$<"<"<"<"

  2. cagcrisp says

    There will be a Mint price Increase on the Sold Out 2018 Proof Palladium this afternoon…

  3. Throckmorton says

    I smile at all those who bemoan the loss of civil liberties and an intrusive government yet do not hesitate to whip out the plastic for all of their purchases.

  4. Old Big Bird says

    @Throckmorton – Boy are you so correct. They will know everything that you are doing. Not only that they (the government) can demand the banks to stop transactions. That is what is going on in China right not. With AI and cameras if you should jay walk your credit rating is hit. They other problem is during a weather emergency such as a hurricane, whit out power your credit card is worthless.

  5. jayjaspersgarage on ebay says

    “They other problem is during a weather emergency such as a hurricane, whit out power your credit card is worthless.”

    Well, maybe not completely worthless if the server is in another part of the country and a card reader attached to a phone still works. With a satellite phone I bet there are ways to keep the credit rolling. Ask these kids to calculate something with pencil and paper and we will all starve.

    I limit my use of credit in public. I barely shop outside the house these days anyhow but I carry cash and dollar coins when I venture out. I use $2 bills for smaller purchases. People love them and are usually surprised to see them. I use the dollar coins in parking meters rather than swipe a card. Anything to lower my risk of getting skimmed.

    The other thing that is funny is how often a younger person operating the till will look at the dollar coins and ask “Are these real?” It happens at least twice a month. The manager usually accepts them. If they hesitate my reply is “do you want to see yourself on the news for refusing U.S. legal cash?”

    I doubt we will ever see a cashless society. Not a bold prediction but there will always be a need for cash.

  6. So Krates says

    Hey let me keep a low profile by not using cards. Instead I’ll use $2 bills, golden dollars and threaten to call the local News on ya. 😉

    How can card use unknowingly effect you ?

    A while ago, when the fee structure and balance transfer rates where more advantageous, I accumulated, combined and leveraged all my credit cards to the max and invested the total balance. My auto insurance premium increased significantly during the years when I employed this arbitrage. Once I unwound the position and my credit utilization rate went back down the premium eventually returned to normal Thing is, my driving ability and risk of submitting a claim never changed. The insurance crooks only look at one side of the ledger. I long for the days of self insuring. I heard that years ago many states would let you post a surety bond to cover your own auto liability.

  7. just another dave in pa says

    I rarely travel on the turnpike and I avoid toll bridges where possible but I did notice that the EZ-Pass system has many cashless tolls now where cash is not taken. If you don’t have EZ-Pass they take a picture of your license plate and mail the bill to the address that the car is registered under.

    I don’t have EZ-Pass and I don’t plan on getting it. Like the phone, it’s a tracking device. Also, the fitbit and any type of smart appliance.

    I’ve often wondered if you need to go off the grid to maintain any semblance of privacy but then I remember that our mediated reality is simply a computer simulation being done by a far superior alien race and suddenly the absurdity of our existence makes sense again.

    What ever happened to the Land of the Free? Did we get lost in convenience and security?

    Cashless tolling is just the first push toward a cashless society. They say about 80% of drivers on the GSP are using EZ-Pass. Cashless tolling is way more convenient and it saves time and it’s good for the environment. It’s also cheaper (although with transponder fees and other charges it’s about the same). The downside of all this automation is the loss of many decent jobs. When all the toll taker jobs are finally replaced by EZ-Pass the charges will most likely increase even though operating costs are considerably reduced.

  8. So Krates says

    Tolls are the worst.

    How much are you willing to pay for one aspect of life to have partial privacy?

    The cash price for the George Washington bridge (NJ-NYC) is $15 per day or $3900 annually to commute.
    The off peak EZ Pass cost is $10.50 per day or $2730 annually to commute

    So it will cost you about 75 oz of silver every year to give you a false sense of privacy. Every license plate on every vehicle is recorded anyway.

  9. just another dave in pa says

    It’s cheaper to use EZ-Pass now because it’s a cash incentive to get people to adopt EZ-Pass. Once people are on EZ-Pass and the toll-takers are gone into history then the tolls will increase even as operating costs are reduced.

    The mayor of NYC is trying to make it very expensive to drive into Manhattan with congestion fees and other cashless tolls.

    NYC is a place where public transportation is actually cost effective and the subway is a fine way to get around with an MTA card. Even the ferries can be cheaper than the tunnels and bridges. The cost of tolls and parking makes even the Acela train an alternative.

  10. So Krates says

    City living ain’t cheap and the daily back and forth to an island ain’t no cake walk. The Staten Island ferry is free both ways. You can still walk and bike the bridges without paying but you’ll need a bike horn that sounds like a car like this dude if you want anyone to make way:

    https://www.youtube.com/watch?v=3qUi1IsRKPw

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