Morning!
Lots of talk lately about stores going completely cashless, and wondering where you stand on this? Are you a big cash and coin lover like me, or do you say good riddance to it all?!
Here are some of the major pros and cons that are making businesses think twice:
Pros to abolishing cash:
- It’s more convenient for everyone
- It’s faster to process transactions (1-2 seconds vs 6-7 using cash (or 6-7 minutes using check – hah!)
- It’s safer, so long as it doesn’t get hacked
- It supposedly lowers crime and theft as there’s no tangible money to steal
But the CONS?
- You don’t have squat if technology breaks (you need electricity at all times, an open communication network at all times, and most importantly – security at all times)
- People can steal your info and money just the same electronically as they can physically (and much more of it in one swoop!)
- Not everyone uses or has access to credit cards/apps/bank accounts, particularly the underserved
- And then perhaps the biggest issue of all for us finance people – most people tend to SPEND MORE using plastic/apps than cold hard cash! Great for the economy, not so much the average person!
My friend Joe recently summed it up nicely on that last one:
We live in WA State. I recently heard on the radio that our local stadium is going cashless! This got me thinking about how our society is clandestinely separating us from our hard-earned money. At what, like $10 or $12 for a beer, a lack of physical cash leaving your wallet can be a scary thing! And not actually having empty pockets to indicate you’re cut off, no more beer?? Just whip out that card! Scary.
Yup – it is scary.
Now obviously most people are ALREADY using their cards and apps and such this way so it won’t be much different for them if stores go through with this, but there’s still a slew of people who prefer (and budget) using a cash system – not to mention all the wee little kids who learn about money using coins and dollars and such! Sure they can still learn through modern technology, but there’s still something to be said about holding (and smelling!) cold hard cash.
Shouldn’t we at least have THE OPTION to continue using it if we want?
My curmudgeonly two cents on it, anyways…
How do you feel about this coming trend? Have you already stopped using cash? Have you shopped at any of these stores doing this already, like the physical Amazon ones?
I don’t think I’ll have any real say in what businesses choose to do or not do over time, but my hope is that whatever route they go they at least think hard about the inclusiveness of it all. Most of us will cope just fine as it’s mainly a personal preference, but there’s a whole slew of others out there who don’t have a choice in the matter.
Here’s just a few of the top articles that come up when you Google the side effects of this:
- A cashless society is dangerously disruptive for the poor, elderly, and homeless – Quartz
- How the Cashless Economy Shuts Out the Poor – NY Times
- Millions would be put at risk in a cashless society, research warns – CNBC
How fortunate are we that we don’t even have to worry about this!
*****
Cool pic up top by @thefreak1337
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For me personally, I think it’d be great. For society in general, I don’t think it’s feasible… at least not yet. Give it 2-3 years, and I think we’ll see the level of cash transactions equal to what check writing is now.
I agree it seems to be heading that way as much as I don’t want it to…
I disagree with it for stores that sell to all income groups. Poor people get screwed over and over again.
Sadly the people making these decisions live in their middle class or upper income bubbles and examine spreadsheets and often forget that an actual human being is attached to that figure.
Also the customer facing employee (who has zero influence in this decision and are usually poorly paid themselves) has to bear the brunt of the customer’s frustration/rage all day long. The spreadsheet does not show the emotional toll this takes on both customer and employee.
Very well said!
+1000
I’m honestly not sure if it should be legal for a business to not accept cash. It is the legal tender in this country. Seems to me that businesses should be required to accept it.
Oooooh hadn’t even considered the LEGALITY of it all!! Super interesting!! I guess they do still accept it in general, but are there rules that it has to specifically include *physical* money?! I doubt it since stuff like that takes forever to catch up to modern technology…
philly banned cashless stores https://bit.ly/2T5gPfR and the people seem to be happy, some business that never accepted cash, now have to reconfigure their system. for small businesses, it may cost more to go cashless as they have to pay a fee for their credit card machines. i prefer to have cash in my pocket as you never know what might happen.
I live in rural Wisconsin so the idea of being cashless seems crazy. Most small bars around here dont take credit cards so it is cash all the way. Personal, I always have cash on me and use it if I’m spending less then 10 to 20 dollars. My parents own a small business though and grew up with a mom that complained about people using credit cards because of the fee for the business to process.
I always have cash on me too just in case…. and a spare $20 in the car which I’ve used on a number of occasions!
Most of us in the FIRE community have a pretty good handle on the spending so cashless is not a big deal.
Whenever I spend money, it’s 90% cashless, I get a receipt. I’ve been tracking my spending since 1998.. I review the spending during entry into my excel spread sheet and a deep dive monthly when I close the monthly books.
Not much chance of over spending going cashless for FI guy,
That’s a rigorous system you’ve got there, sir! Love it ;:)
I personally don’t use cash for anything but my bus pass and laundry, I pull out $100 and paid $90 bus and the $10 for coin op laundry. Everything else is my cards and apps. I prefer it that way, I’m too busy to add 30 minutes to walk to an Atm and get cash, I got stuff to do lol.
I was recently in an ice cream shop this past weekend with the lady, we had extra spending money for our day and wanted a sweet treat. They only accepted cash. For me personally I feel like I’m not the customer they want, the odds I even return are significantly lower if I’m being honest. We live in a digital society and I think we need digital options to keep up, I also think with that cash needs to move to the wayside.
Just my input, I’m not much of a somebody so I think it’s just a lonely opinion but I figured I’d share :)
Have a great day J!
I was thinking over how often I use cash and your post really struck a chord. I consistently use it for just two things:
– Every four weeks at my barber, who has done business the same way at the same location since 1961 and isn’t about to change anything but his prices (up $1 every five or ten years).
– The ice cream truck, driven by a retiree who does it for fun, and for which we keep a ceramic jar of $5 and $1 bills on top of our TV furniture to be opened whenever we hear the dulcet synthetic tones of ‘Popeyes the Sailor Man’ nearing our street.
That said, I wholly agree that these fancy modern “cashless” places a huge burden on those who need it most. :(
I think as long as we have an *option* as a customer we’re good and people can choose to pay however best fits with them… It only becomes a problem when it’s “this way or no way” :(
(and now I want a damn ice cream!! Thank you for that!! :))
I don’t use cash often but I want to be able to do so when I want!
I do think it will create a problem for the poor who don’t have the app on their phone to get into the store. I also think that spending with cash makes it easier for some who can not add in their head what they have put on their card for the day, week, or month! Kinda scary unless we start educating our young about credit card use. Kinda scary to teach the old a whole new system too!
How will you mail a card to your little grandson that has $5 for his piggy bank or a trip to the ice cream shop? It is just taking the fun out of the ownership of the money you make or give :(
Wow lots to think about in this new technology world. We have given up many jobs because of the computer, smart phone and apps. Pretty soon we will all be sitting in our house holding our phones because we need them for everything! It won’t just be the teenager it will be ALL!
PIGGY BANKS!! They would go away over time, you’re right!!
… and tooth fairies!
YES!! Eek!
In Seattle there’s also that (creepy) Amazon convenience store where NOTHING at all gets whipped out to pay. They just “know” you’re there and charge your Amazon payment method with whatever you walk out with. Wow……in the immortal words of Filmore (George Carlin), from Cars – “it’s a conspiracy, man!” :-)
I too find that concept creepy. Yes, it’s convenient to not have to wait in a long line to check out. But how many times have you been watching a register only to find out that something didn’t ring up for the price you expected. That easily happens if an old ad tag was left up, the item was in the wrong place, the central database didn’t update for a bonus item (ie – 50% more shampoo in this bottle for the same price) to also be rung up at the sales prices, or in the case of Amazon “this item was on a flash sale only for an hour and it has been 62 minutes,” I want the ability to be able to say, “no way. Put that back.” if something doesn’t ring up the way I expected it to. It is far harder to go back for a few dollars and deal with the hassle of a return after the fact (assuming that you can even get one).
Yeah, how does that work??! I imagine there’s customer service for it at some place (whether at the store or online), but you’re right you wouldn’t find out until *after* the fact and most people are too lazy to even check or find it :(
When I worked fast food our credit card system would stop working sometimes and we could only accept cash. Business suffered some but we still had business and if someone really wanted the food they’d come back with cash. Technology is not always reliable.
Agreed.
I’m mostly cashless, or at least as much as possible.
I’m not a germophobe but I can’t help but think about how many gross things are on your cash, you don’t know where it’s been! (Not to mention trace drug amounts and feces which may or may not be on every piece of paper currency).
Ever seen the grannies at the penny slots and their black fingertips? No thanks!
Put all that cash in VTSAX or interest bearing checking and call it a day.
Haha….. You’re not wrong!
What hasn’t been mentioned is the systemic racism in banning cash sales. While only 3% of white people are unbanked, !6 to 17% of Hispanic Americans and African Americans are unbanked, so they don’t have a credit card or debit card to use.
As mentioned above, this also makes life difficult for ANY poor person. As for the business that accepts only cash sales, that business is likely to be owned by a lower income person who has not yet developed the credit to be able to take credit cards, or (in the case of two businesses I deal with – my hairdresser and a favorite bookstore) are not making enough money to be able to afford to pay a percentage to someone to process their credit card sales.
+1000 My Mother had this issue when I was younger. An old bank that no longer exists put her down in the Chex database saying that she owed them an overdraft fee. She claims she didn’t (But she might have. I can’t defend her there without proof). Because of that she was unable to open another checking account for over ten years. She got lucky in that she was able to open one with Regions, but every single other bank continued to rejected her, and many still do over 20yrs later. She didn’t have the money to pay for that fee (my mother has always been real poor). I often think about all the little things I take for granted that she would be unable to do if not for that lifeline of a bank account. Many employers don’t want to cut physical checks anymore, and even if she got one she would have to find a check cashing store who would charge a fee to cash it out. Then in order to pay bills you would have to buy check books and stamps to mail payments. The delay in bill payments increase the chance that people in these situations accidently spend more money than they have in the account and incur overdraft fees. We all know these have a tendency to spiral. $20-$30 hardly means anything to any of us, but I remember when that amount was the most important thing in the world. All these tiny barriers can amount to quite the regressive “tax” on those who can afford to pay it the least.
All of this is pretty scary :( And you’re right most of us don’t even think about – or know! – about any of this! I certainly didn’t until someone passed me an article on it and then decided to educate myself more… A whole other world out there for some (many) :(
I think I’m in the minority in that I spend more frivolously when I have cash in my wallet vs on my credit card. Because I check my bank accounts nearly daily, those credit transactions sting more (“if I buy this my CC bill will become $x, do you really want this?”). And when I do my yearly budget review, there’s clear evidence of what I bought. But when I have cash, that $300 or whatever was deducted from my bank account already and becomes “free” money in my mind – I will never know what I spent it on!
So, all that being said, I’m okay with going cashless haha. Though I always keep a littleeee cash on me at all times because you never know!
It’s good to know yourself like that! It’s the ones who are clueless about how it affects them that end up getting into trouble :)
We had a cinnamon bun and coffee shop open cashless. They would take cash for the purchase of a gift card only, which could then be used to complete a purchase.
That lasted about a week and a half before they opened it up to accept cash for everything.
That didn’t take long!
I almost never leave the house with less than two or three hundred dollars in my wallet. I usually pay cash most everywhere except for gasoline at the pump. I don’t do it for budget reasons, just out of habit and since my wife keeps a bottomless cash stash for both of us I never have to use an ATM and I never run out of cash. But we are both frugal by nature so having a wallet full of cash does not, ever, lead either of us to buying something. We do not shop for entertainment. If I need something I buy it, period. So having cash or not makes no difference in our spending, nor do I feel any pain when cash leaves my wallet, it feels just the same as using a credit card. Plus in Arkansas there still are places that don’t take credit cards, we are kind of in a time warp here and like it that way.
Yeah, I feel like it would have to take A LOT for it to go completely mainstream, but good for us to be thinking/feeling about it all now so we’re prepared :)
My biggest concern with going cashless would be the folks who don’t have access to bank accounts/credit. I work in a public library in a town with a pretty high poverty rate, so I encounter folks who don’t have access to lots of things I’d otherwise take for granted. Personally I prefer using a debit card, since it means I can’t spend money I don’t have, but I also have a paper trail for my transactions. I am a weirdo who wastes my money if I have cash, but I think harder about my spending if I use my debit card, so I don’t mind not being able to pay cash for my own purposes, but this would potentially prevent some of my library patrons from accessing goods and services they need, so cashless is a big no from me.
Totally… and LOVE that you work at a library!! It recently went on my “things to try one day” list :) I’m enthralled by them.
I prefer to use cash only at some places, because I do not want my purchases tracked and I don’t want my card information compromised. I’m not sure how I would deal with Target if I could not use cash. I believe that certain stores/businesses are more vulnerable – or make the customer info more vulnerable – to exploitation of data.
Target is awful. I once had my online account hacked some purchased stuff on my account with my credit card and it was all shipped to a home in california. I called target to inform them (i canceled it via online already) and I asked the fraud department if they could see if any other packages were being shipped to that address because they are probably fraudulent as well. They said no I was shocked such a large company couldn’t see such a small thing. Maybe they lied to me but I don’t ever keep my card saved on any website after that experience. On walmart.com I once had someone else’s credit card saved to my account! No idea how that happened and walmart was of no assistance.
That is scary :(
At this point I’ve just accepted the fact I’ll have to get a new card every year or two from being hacked somehow/somewhere, but it’s probably not the healthiest way to deal with it haha…
A completely cashless society just isn’t feasible. We are becoming too dependent on technology. How do people pay when the system is down? What about emergencies? What about people who, for whatever reason, can’t or don’t have debit/credit cards? I just don’t see this happening in southern states where we have so much poverty.
It prob will just start in cities, unless more of them ban it like someone just mentioned above! That would help fight it fast!
We are almost 100% cashless…..except trying to pay for parking downtown! Lol. Even those guys are starting to carry little card machines. I need to start keeping at least a $20 on me. I don’t think 100% cashless is smart for personal or corporate reasons…..like power outages haha. One day it will bite me.
I keep a $20 bill in my car at all times :) And my backpack actually! Does feel good knowing you have access to it just in case…
I found out a couple weeks ago that my dad takes that to an extreme: “if anything happens to me, there’s $700 cash in the van’s glove box. Make sure you take that out before you sell the thing.”
That was weird.
oh wow! haha…. I keep $500 in cash in our safe, but that’s pretty hardcore keeping it in your car?! i wonder why $700?
You need to fight against a cashless society with all your might. Your personal and financial freedom depend on it. What I have inserted below is a long read. If you can about individual liberty you need to spend a few minutes. Governments have been waging a war on cash. The following is from Legacy Research (so I did not write it):
Imagine a new type of cash…
Unlike the kind you carry in your wallet, it exists only in digital form.
There’s no more need for ATMs. Tip jars are a thing of the past. Even vending machines are digital.
Every time you spend money, it’s through a digital app. And it’s recorded in a government database.
The feds collect and store details on every transaction you make. They also know exactly where you are in the world every time you buy something.
In today’s dispatch, I (Chris) will show you why this scenario is already becoming a reality around the world… and why it’s a disaster if you value your liberty.
Then tomorrow, we’ll look at why it’s coming to America… and what you can do about it.
We’re not the first to worry about financial privacy in a digital world…
A pioneering computer scientist called Paul Armer sounded the alarm on this back in the 1970s.
In the 1950s and 1960s, Armer headed the computer science departments at the RAND Corporation think tank and at Stanford University.
Then, in 1975, he issued a chilling warning about what would happen to our privacy if governments ditched physical cash and moved to a purely digital money system.
In an article titled “Computer Technology and Surveillance,” Armer said such a system would become a powerful surveillance tool for the state.
This wasn’t lost on the KGB….
In 1971, Russia’s secret police tasked a group of advisors to devise a plan.
KGB higher-ups wanted to figure out how to create a surveillance system that would keep track of everyone inside the U.S.S.R. without them knowing about it.
The computer scientists’ proposed solution was to get rid of physical cash and replace it with digital currency transactions. As Armer wrote…
That exercise… was only a two-day effort. I’m sure we could add some bells and whistles to increase its effectiveness somewhat. But the fact remains that this group decided that if you wanted to build an unobtrusive system for surveillance, you couldn’t do better than an EFTS [Electronic Funds Transfer System, the term Armer used to describe a purely digital currency system].
Why was that so appealing to the KGB?
Because when you’re always watched, you adopt a don’t-stick-your-neck-out attitude. This creates a docile population governments can easily control.
Armer’s warning has been mostly forgotten…
But governments haven’t given up on their dream of creating a surveillance state… And tracking our financial transactions is an important part of that.
As we’ve been showing you, that’s why governments around the world are waging a War on Cash.
They want to abolish banknotes and coins and replace them with purely digital currencies.
These will be based on the digital ledger – or “blockchain” – that underpins bitcoin and other cryptocurrencies. But instead of being decentralized like bitcoin and other private cryptocurrencies… they’ll be centralized and controlled by governments and their central banks.
Central banks in Canada, Britain, and Norway are already studying how to roll out crypto-fiat hybrids. And the Swedish government has set up a formal government inquiry into making the switch.
But China is leading the way…
China is the world’s second-largest economy. And it’s readying a crypto version of its currency, the renminbi.
As our tech investing expert Jeff Brown explained it to readers of our free tech investing newsletter, The Bleeding Edge…
News has leaked that China wants to push out its state-backed digital currency much sooner than we thought. According to anonymous sources, it may happen as early as November.
This is the digital currency that will be issued through China’s central bank, the People’s Bank of China. It will work like a cryptocurrency. But unlike a cryptocurrency, it won’t be decentralized. Quite the opposite, in fact… It will be controlled by the Chinese government.
And Jeff says the rollout of crypto-fiat won’t end with China…
To me, this is a sign of things to come. Most countries are going to issue their own digital currency, phasing out paper currency in the process.
That way, governments will be able to see, and tax, every single transaction using a digital currency. Even those taking place outside of the country’s borders. It’s a central planner’s dream…
That’s a body blow if you value your privacy…
Each transaction on a blockchain leaves an indelible digital record. In the case of bitcoin, transactions are linked to a wallet ID – a long string of digits – not your name and address.
It’s part of what makes blockchain technology so appealing when used in a decentralized way. No one can mess with the record of transactions.
And because the transactions are pseudonymous, you have a lot more privacy than you do when you spend money on a debit or credit card.
But fiat-crypto hybrids will work differently. They won’t be decentralized. And they won’t be pseudonymous.
Instead, governments will record each transaction you make – and where and when you make it – next to your name, address, and Social Security number.
Every last detail of your financial life will be laid bare.
Colleague Teeka Tiwari was ahead of the curve on this…
As Cut regulars know, Teeka was one of the first in our industry to recommend cryptocurrencies to readers.
And even after last year’s brutal “Crypto Winter” bear market, his top open recommendations are up 1,897%… 2,260%… and even 6,973%.
At the end of last year, he told us that governments would try to compete with bitcoin by way of centralized, state-issued cryptocurrencies.
These will have many of the conveniences of a decentralized cryptocurrency. But they will be a disaster for your privacy. Here’s Teeka with more…
With a crypto-fiat, each transaction made in the economy will leave a digital record that the government will be able to see. Which is why fiat money is headed to a blockchain. Governments like to look at where all the money is. A blockchain they control is a way for them to do that.
A lot of people will ask, “Won’t this kill bitcoin and other cryptocurrencies?” But Teeka says it should make you even more bullish on more private alternatives such as bitcoin…
Private cryptocurrencies, as opposed to the government version, afford users greater anonymity. And you have scarcity with private cryptocurrencies, which you won’t have with crypto-fiat hybrids. This protects you from having your wealth inflated away by governments and central banks.
Bitcoin, for instance, has a hard cap of 21 million coins. You won’t have that guarantee with crypto-fiat currencies. There will still be a central bank that can fiddle with interest rates and balloon the money supply, causing inflation.
Regulators are thinking, “Oh, okay. We can kill the market for private cryptos by creating a crypto fiat.” But my call is that it will end up expanding the crypto market, not shrinking it.
That’s why, if you haven’t already, now is a good time to buy some bitcoin.
If Teeka is right, it’s going to get a lot more popular as folks around the world realize that governments are getting rid of physical cash… and replacing it with surveillance money.
Tomorrow, we’ll show you why what’s happening in China is a roadmap for other countries to follow.
And that includes the U.S.
As you’ll see, America’s elites understand that rolling out a purely digital dollar will give them even more power over the financial system.
Stay tuned…
Until tomorrow…
Okay that was A LOT haha…
But pretty freaky that it was a warning back in the 70s!! I don’t know if I agree with the whole gov’t conspiracy thing, but it’s def. scary to think about…
Hey, I’m not a conspiracy theorist by any stretch of the imagination but the facts plainly are that it’s an Orwellian world that we are headed into.
For instance, China is massively into facial recognition and “social credit”. If you haven’t heard/read about that check it out if you want frightening reading. Many law agencies in the USA have adopted facial recognition too. Check out this article from Vox: https://www.vox.com/recode/2019/12/10/20996085/ai-facial-recognition-police-law-enforcement-regulation
So you need to be mindful when you talk about going cashless. When the government and big business (Amazon, Google, Facebook etc) know every dime you spend you might want to ask just what they are going to do with the information.
There is an old adage about loving one’s country but fearing it’s government. I believe that we indeed have good reason for that fear.
I am choosing *not* to read that article, for now.. :)
PS: Just saw this trending on Twitter:
“The tools you can use to fool facial recognition software”
https://twitter.com/i/events/1233139406531440641
There was a futuristic movie a few years back, I think starring Will Smith, where he was unjustly accused by the State and relentlessly pursued. One of State’s very first actions was to cut off his access to his own money through electronic means … “cashless” society is a nightmare scenario for all freedom-valuing citizens. And no longer is this a futuristic scenario; it is now!
You should read that comment from Martinus up above you :)
J, we run a Retail/Experiential venue in Los Angeles and we have gone completely cashless. For the first week we were open, we took cash but the % of sales were 8-12% cash transactions. It took hours a day to count drawers in and out and make sure procedures were in place for breaks, etc. We went cashless 3 weeks ago and have never looked back. We accept all major cc/debit/apple pay. We have not had any push back on this decision from employees or customers.
Interesting insight!
Pardon me for saying so but, I find America years behind other Western nations. You will never need cash in many of them and it is almost obsolete in some already. We have a local panhandler with an app on his phone to receive donations, because no one is carrying cash anymore. Used smartphones are cheap and free wifi signals are quite common.
Cashless Canadian
Stop!! Panhandling app?!
Maybe in large cities cashless is reasonable, but in my very rural part of Canada, cash is still very much a part of everyday life. For me, the options for internet at home are expensive satellite service or expensive phone data plans. If the card machines go down, it’s not unusual for it to last until the next day, and to affect several businesses at once.
Maybe in large cities cashless is reasonable, but in my very rural part of Canada, cash is still very much a part of everyday life. For me, the options for internet at home are expensive satellite service or expensive phone data plans. If the card machines go down, it’s not unusual for it to last until the next day, and to affect several businesses at once.