Cash-less Is King

I recently stayed at a hotel that did not accept cash as a form of payment, nor did they have any cash on hand to make change. You couldn't reserve a room or pay for food without a bank card, credit card or digital payment.

My colleague and I simply wanted to exchange a $20 bill for smaller denominations to tip the shuttle driver who brought us from the airport to the hotel. The staff at the front desk said (and it was posted) that they were a cashless hotel. Nothing could be purchased unless you had a credit or debit card. Credit and debit cards, and more recently digital payment have made paying for goods and services and avoiding carrying large amounts of cash incredibly convenient - But at what cost?

More Convenience

There is no denying that carrying credit cards instead of cash is generally safer and certainly more convenient. Also, Cards and digital payments provide a way to easily track transactions - simplifying the process of keeping track of your spending and managing your budget. However, businesses and institutions - specifically, banks can collect much more data about your spending habits when you use a bank card and share/sell that data for profit.

When you use your bank card, where you spent your money, and how much was spent is all accessible and that information is marketable. Fees can be charged and minimum balances and other conditions can be set. Also, If you want to make a large purchase and need a loan, you have to have an account, which also means you need to have a permanent address.

Cash provides a level of privacy and anonymity that you don't get with using cards. When you take money out of your account converting it to cash, where and when that cash is spent is known only to you or a handful of people. Banks would prefer that you not do this as they lose control of that resource and have no way to monetize your financial data. Many business owners and workers dislike working with and handling cash. This was particularly true during the pandemic - when people thought mistakenly that the likelihood of transmission was high with handing cash.

Access To Goods And Services

People who either do not want to participate in the credit and bank card system or can't are the most affected. The people who can't participate typically qualify as low income and the poor. In a survey by the Federal Reserve, roughly 5.9 million homes did not have a bank account in 2021. That number is decreasing, but not quickly. As more businesses opt out of accepting cash, it is this demographic that suffers the most. This can be incredibly frustrating - people may have the legal tender backed by the state to purchase goods and services that they want or need, but they are prohibited from using it.

Many lawmakers have pushed for legislation that require businesses to allow customers to use cash for purchasing items. The opposition is strong however and the battle for businesses to eliminate cash as an option is ongoing. For the business owners who push for digital payments only, their argument is that transactions between the owner and the customer is faster, it reduces labor costs and it is more secure - no one can steal cash from your register if there is no cash to steal. Still, it's unlikely that cash will go away entirely. Credit and bank cards and digital forms of payment make transactions faster and more convenient, but at the end of the day, smart business owners know and pay attention to their customers - and if cash is preferred, they would be wise to keep it as an option.