The Cost of Going Cashless - GoldStar ATM

The Couch Report, a current affairs video channel from VICE News, recently published an episode regarding the cost of moving to a cashless society. The episode’s introduction states, “The pandemic sent cash circulation into a tailspin. But there’s a movement to stop stores from going cashless — because it carries a high price for those who can least afford it. Going cashless excludes those without cards, bank accounts, smartphones, home utility bills and government IDs.”

While the idea of going cashless has for years been touted, none of its supporters have fully addressed the very real consequences of moving to a cashless society. Creating a cashless society has been shown to adversely affect people living in America who are unbanked or underbanked.

Unbanked and Underbanked

Currently, according to the Federal Reserve Bank, 18 percent of the U.S. population is either “unbanked” or “underbanked”. Underbanked adults generally have bank accounts but mostly make use of alternative financial services, such as Payday loans. Unbanked adults don’t have a bank account at all and rely on alternative financial services to conduct financial transactions. 

Also, people of color disproportionately make up the majority of unbanked and underbanked individuals. In 2020, 40 percent of Black Americans were either unbanked or underbanked and 30 percent of Hispanics were unbanked or underbanked.

These individuals also heavily rely on cash to pay for goods and services.

Moving to a cashless society will further alienate people of color who rely on cash to pay for basic necessities. 

The Case for Cash

With this in mind, several states have made the case for supporting cash, passing legislation that would make it illegal for businesses to refuse to accept cash as a form of payment.

Additionally, advocates for cash also point out the facts that using cash better protects the privacy of its users since no digital information is exchanged in the transaction, cash is also readily used in times of natural disasters to buy immediate necessities, and requires the user to pay fewer fees, which are generated every time a customer uses a credit card.

As The Couch Report episode stated, options for cashless payments are “practically free to those who can afford it, and very expensive to those who can’t,” making it imperative to keep cash as a viable payment option in support of equality.

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