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Since PayPal launched in 1999, we have seen a dramatic transformation of the payment landscape. Digital payment technology has continued to advance with bitcoin, mobile wallets, and pay by app options. Digital payments are being adopted everywhere, from your local grocery store to the corner coffee shop. As of 2019, global digital payment volume reached a staggering $4.1 trillion. It is clear that consumers are growing increasingly comfortable with these technologies.
While the movements to digital payment options was already evident, the pandemic saw a shift in digital over cash usage. Cash is made of a fibrous material, and a notorious germ spreader. Thanks to the fear of Covid-19, cashless innovations have only continued to rise. This has left many speculating that we may see a future free of all forms of cash. While studies are showing that we may be headed towards a “less cash” society, completely cashless is unlikely.
The Problem With Going Cashless
Going Cashless is Discriminatory
During the height of the pandemic, some businesses chose to eliminate the use of cash as payment to help avoid the spread of the Covid-19 virus. This was met with mixed reactions. While some accepted and understood these business’ decisions, others felt this was discriminatory.
In a 2019 report by the FDIC it showed that 5.4 percent (7.1 million) households were unbanked. It also showed that the majority of those unbanked households are homeless, minorities, and low income. A move to cashless would result in this 5.4 percent being excluded from operating in society, making the already vulnerable even more vulnerable.
Privacy
The problem with digital, is that everything can be tracked. Consumers already must deal with retailers tracking their every move. There is a constant fear of having their data sold, hacked, and even stolen. In recent years, there been a growing awareness of online tracking and a push for digital privacy regulations. There are now protections in place to govern what websites and online retailers do with consumer data. So, what about in-store transactions? Consumers should have the right to privacy when it comes to the purchases they make. Paying with cash allows for purchasing goods and services, while keeping transactions private.
Is Cashless legal?
There are no laws that exist prohibiting businesses from not accepting cash as a form of payment. However, some lawmakers are taking action to keep businesses from discriminating against those who wish to pay with cash. The cities of New York, Philadelphia, and San Francisco, as well as the States of New Jersey, Rhode Island, and Massachusetts have laws in place to protect those unbanked customers who rely on cash. Many more lawmakers are proposing bills that would require businesses to accept cash.
Cost
Cashless payments may be convenient for consumers, but they are expensive for businesses. If you are a business owner that accepts cashless payments, you are already familiar with the fees. In 2019, card issuers made $80billion in transaction fees. In addition, online payment services such as Square and PayPal, also take a percentage of sales for the privilege of using their services. For a small business, all these fees add up quickly.
Cash is Still King
There is no doubt that we will continue to see growth and advancements in the digital payment landscape. But there are still real needs, and benefits, for paying with cash. Here at Edge One, we are experienced and knowledgeable when it comes to cash handling. We carry a wide range of products designed to keep your cash handling processes efficient, safe, and security. For more information, check out our Cash Handling Products or Contact Us at 800-423-3343(EDGE)