Can cashless societies ever be truly inclusive? Part 1

Last week, a ruling by the New York City Council voted to ban stores and restaurants from refusing cash payments. The ruling comes from the decision that refusing to accept cash as legal tender is a discriminatory act against the unbanked, underbanked and poorer members of society who might not have access to debit or credit lines. The Big Apple’s fight for financial inclusion is just one in a wave of similar such cases throughout 2019 in which Philadelphia (March 2019), New Jersey (March 2019), and San Francisco (May 2019), all voted to ban stores and restaurants from refusing cash. Massachusetts has had a similar law in operation dating all the way back to 1978, stipulating that “no retail establishment offering goods and services for sale shall discriminate against a cash buyer” on the basis that all establishments “must accept legal tender when offered as payment by the buyer”. However, the question that looms large from these developments is this: where has this desire to eradicate cash come from?

The move towards the Holy Grail of the modern payments landscape, the fabled land of wearable payments, and cashier-free supermarkets, the ever-sacrosanct “cashless society”, has both excited and dawned on payments pundits the world over during the past ten years. With increased access to new and dynamic payments methods, where does our acceptance of cash fit in?

In June 2019 alone, the U.S. hit a major milestone in its payments history as for the first time ever, debit card based transactions overtook cash. The study found that cash payments declined from 30% in 2017, to 26% in 2019. Just north of the border, Canada has also seen a 40% decline in cash payments in five years, according to a report by Payments Canada.

With a reduction in consumer intention to use cash at the Point of Sale (POS), the logistical issues that stem from cash handling, such as security and transport costs, tied in with the threat of theft, perhaps it could be argued that outlets in the U.S. are just in their rejection of cash based payments altogether, right? Wrong. This narrative that a “cashless society” equals a progressive, forward thinking one can also be seen as discriminatory against those who aren’t integrated into our increasingly digital society. Why then should cash be kept alive? The answer is choice. The answer is inclusion.