by Pat Rooney
“I want some real money”
This is a quote from a long-time customer of the bank who has around the clock help and no longer controls her own checkbook. It resonated with me, as she wanted to hold some cold, hard cash. Thanks to today’s technology, you don’t have to touch much cash these days, if you prefer not to. But like so many things potentially being disrupted, there are unintended consequences of operating without cash and I believe we should think about cash and its importance to our economy and our lives.
It is currently under pressure from improvements in card technology and digital money from smart phones. And while the much-hyped bitcoin and its confederates have proven cumbersome, there is still a trend with some retailers (on the east coast, of course) not to accept cash at all. The Wall Street Journal recently cited a report stating that only about 30% of all commercial transactions are now handled with cash. The east coast cashless movement is usually confined to trendy restaurants in New York who doubtlessly cite operating efficiencies and an invariable high-tech cool factor as reasons.
Given some thought, however, going cashless creates some major unintended consequences. The first being that the poorest people will suffer the most. Based on government data a full 25% of Americans are “under banked” relying instead on cash and other services outside the conventional banking system. As Richie Torres, a city councilman from the Bronx in the case of the New York restaurants, said “banning cash amounts to intended discrimination because these businesses know exactly who they are keeping out.”
Secondly, it is now well documented that using cash exclusively can help those with spending addictions break the habit. Cutting up the credit cards and carrying cash for everyday purchases is clearly the best way to help a person get his or her spending under control. Try it yourself for a while and you will soon see the difference.
Thirdly, cash still offers some precious personal privacy. In a world of rapid integration and connection we are rapidly losing much of our ability to maintain our right to privacy. Merchants and other businesses love capturing consumer data on purchases and living trends and will go to great lengths to keep this data increasing. And as the recent accusations against Facebook show, these companies can’t be trusted using such data wisely.
Using cash still offers a simple way to avoid these data grabs, however, the freedom to use cash should not be taken for granted. In this day and age, anything can happen, and there are powerful forces out there today that want to keep these trends moving against the personal privacy of cash. The consequences of a cashless society would be hard on many of us. There are many other examples of how a cashless society imperials personal freedom, but time and space do not permit additional examples. The best way to avoid this of course is to get some “real money” and use it every day.