America moves closer to being a cashless society
America moves closer to being a cashless society
By BOB SULLIVAN Published: Sept 11, 2018 10:34 a.m. ET
If you want to buy a beer at Flatstick pub in Seattle,
don’t whip out a $10 bill to pay—you’ll walk away thirsty. Flatstick, a hot new
mini-chain in the Pacific Northwest, doesn’t take cash. Neither does Bluestone
Lane, a coffee chain with locations in New York, Philly and D.C. Patrons there
have to pay with plastic or an app called LevelUp. Want to grab a Sweetgreen
salad for lunch with cash? No can-do at many locations.
Cashless commerce is popping up around the country,
particularly in restaurants catering to a younger crowd, which is likely to
leave home without any greenbacks, or even a wallet, and instead choose to live
life with a smartphone and a few credit or debit cards attached.
Businesses who’ve gone cashless rave about the results.
Flatstick owner Sam Largent told me plastic-only reduces error rates during
times of complex accounting, such as calculating tips when shifts change.
Cash sure seems to be on the ropes. The dollar value of
cash transactions sank 7% from 2010 to 2015, according to The Nilson Report,
while credit and debit card payments rose nearly 50%. Meanwhile, ATMs, which
had their 50th birthday last year, are disappearing around the block and around
the world, signaling the decline of the “cash run.”
Of course, cash-free environments aren’t brand new.
Airlines went cashless a long time ago (for meals and other onboard purchases),
as did parking lots and other unmanned spots. And with the meteoric rise of
friend-to-friend payment apps like Venmo, Zelle and Splitwise, we’re no longer
throwing $20 bills on the table after a meal (or handing over cash or checks to
roommates for the gas bill).
So you’re saying cash is over?
Not exactly. The Federal Reserve said in 2016 that 35% of
U.S. transactions were still made in cash. And the amount of cash—literally,
legal tender notes—being used around the world continues to rise. Plus, there
are still plenty of obstacles to going cashless.
For starters, the FDIC estimates that 7% of the U.S.
population is still unbanked. In other words, they live an all-cash life, so
would be entirely shut out in a cashless society. Some also like the anonymity
that comes with paying cash. Others use cash for budgeting reasons (when you’re
out of cash, you stop spending).
Still, on a global scale, eliminating cash offers some
intriguing possibilities. Merely the elimination of large denominations, which
the EU has done, makes life much harder for large-enterprise criminals, like
drug dealers. It’s far more conspicuous to carry around large piles of small
bills. If all financial transactions were electronic, hiding crime would become
much more difficult. There’s also the convenience factor of pulling out plastic
(or your phone) instead of counting bills.
What does this all mean for law-abiding citizens like me?
Forces will undoubtedly continue nudging us toward a
cashless life, which comes with plenty of benefits. Just remember that cashless
spending is frictionless—it’s just a swipe of a card or a wave of your phone.
So, if you’re already prone to overspending, get creative about curbing those
tendencies and making sure your savings goals are on track.
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