Cash-free world

Google suggested I checkout out this CBC Article about Canada trending towards cashless society. It got me thinking of what the true cost of that would be? After thinking on it, I thought it could be interesting to write up something. That said - I'm in the USA rather than Canada. I'm not sure on the USA stats for this but know some US cities are taking action to ensure companies still take cash.

My background

Growing up in the 1990s-2000s cash was big. I got my first debit card when I was around 14 and I have my first checking account but even then I was still using cash. There was something that was important about whenever I would hand over money or use change. Always made me feel so cool if I was given $10 to go to the movies. When I got my credit card in college I still used cash for a good deal of things (craigslist deals, paying back friends, small purchases) so I could help keep track of it. Some of my friends stay cash first as they know how much money they have at any given time.

Even in the cashless society we are in now, I feel better when there is cash in my pocket. Cards and phones feel so monopoly money-ey¹ that it's tough to truly keep track of where you are at any given time. I am still on the look out for an app that helps me manage that well - used Mint for less than a year [RIP] but nothing quite works right for my brain. On a recent trip home to Michigan my Grandpa was amazed that I had brought no cash on the trip - I honestly just expected to be able to use my card everywhere.

The Pro-s to Cashless-ness

What immediately came to mind was how pro-consumer a cashless society leans. It allows you to tap in to funds that you don't physically have - avoiding the friction of using an ATM². Most people have a phone or tap to pay card they can use to make the transaction such a breeze, no change to figure out what you are going to do with or anything. With the raising prices, coins are losing so much value and becoming almost a nuisance. I take a lot of gruff for being the only person in my friend group who will crouch down for a coin on the ground #pinchthepennies.

Having just traveled to the UK, it routinely astounds me that since COVID tap to pay is so widely accepted that I don't even take out cash pounds anymore. Makes traveling that much easier and my card doesn't have any foreign transaction fees which is the best.

Also if we were fully cashless it would save funds as we wouldn't need a federal mint. Not sure how this contributes to everything but thought I could add it none the less. Actually, would we still need to print the cash itself? Maybe something to look into.

The Con-s to Cashless-ness

When I started playing devils advocate I remembered that to have a bank account is a privilege - by switching to a cashless society we deprive people who cant get a credit card or account the ability to participate at all.

Also the cost of credit card usage fee's being transferred to the company taking your money results in less cash being controlled by the person you are paying. All this ends up hitting smaller companies disproportionally more as they are scrimping and saving as much as they can to get by. So by using cash, they don't have any fees and can incentivize patrons to go this route resulting in more money for them

Concluding

I personally like cashless checkout and think that it is beneficial but also recognize if we want to cut out cash all together we need to account for people without options to go cashless and ease companies burdens to migrate to that way.

All this being said - my gut reaction of "keeping cash around feels regressive" may not be the reality as cash is so important for some people. Who knows, when we all adopt crypto as our first form of cash there wont be any physical money (I don't see this happening but maybe I'll eat my words).

This (along with so many other parts of government) is an area worth exploring but we'll probably end up preserving cash while not improving cashless. Hopefully I'll reread this in a few years and have a take one way or the other.

-Max

Footnotes

1. When I bought my house - the mortgage felt SOOOOO monopoly money it was laughable ↩

2. Huge props to the UK for basically no charge ATMs. Honestly life in america is so annoy that I have cant use the convenient ATM near the cash only spot or else I have to pay $3 dollars upfront then get hit with whatever my bank wants to hit me with. Literally poor tax in action /end-of-rant ↩