Will cash be obsolete

[Pabitra]

Whereas Sweden and South Korea are talking of cashless society, USA is going the other way

Philadelphia Is First U.S. City to Ban Cashless Stores - WSJ


Philadelphia is the first major U.S. city to ban cashless stores, placing it at the forefront of a debate that pits retail innovation against lawmakers trying to protect all citizens' access to the marketplace.

Starting in July, Philadelphia's new law will require most retail stores to accept cash. A New York City councilman is pushing similar legislation there, and New Jersey's legislature recently passed a bill banning cashless stores statewide. A spokesman for New Jersey Gov. Phil Murphy, a Democrat, declined to comment on whether he would sign it. Massachusetts has gone the farthest on the issue and is the only state that requires retailers to accept cash.

The measures seek to blunt a nascent trend that could rapidly accelerate thanks to Amazon.com Inc.'s power to shape nationwide retail trends. They represent an attempt to strike a balance between equity for lower-income consumers and merchants' eagerness to embrace technological advances.

Businesses that have gone cashless point to greater efficiency for employees, who don't have to make change or count cash at closing time, and improved safety because workers don't have to carry large bank deposits.


But backers of measures forcing stores to accept cash say they worry about people who don't have credit or debit cards. Supporters also say some consumers prefer to pay with currency for privacy reasons.

"I think it's more the future than a fad, and that's why there is a need for a legislative response," said New York City Councilman Ritchie Torres, a Democrat, who is sponsoring legislation to ban cashless stores.

Mercedes-Benz Stadium in Atlanta said starting Sunday it will be the first NFL stadium to go fully cashless. The stadium, home to the NFL's Falcons and Major League Soccer's Atlanta United, said requiring fans to use plastic or make mobile payments will speed up transactions and reduce lines. Officials also cite safety benefits and say it will make it easier to lower food prices.

For fans who prefer to carry cash or who either don't have a credit or debit card or don't want to use one, 10 kiosks around the arena will convert cash to a prepaid debit card with no transaction fee.

Philadelphia City Councilman William Greenlee, a Democrat, said he was inspired to introduce the bill after noticing some Center City sandwich shops had gone cashless.

"Most of the people who don't have credit tend to be lower income, minority, immigrants. It just seemed to me, if not intentional, at least a form of discrimination," he said. Now, he said, stores will be required "to do what businesses have been doing since Ben Franklin was walking the streets of Philadelphia."

Philadelphia Mayor Jim Kenney, a Democrat, signed the bill into law last week. His spokesman noted that 26% of city residents live below the poverty line and many don't have a bank account. Cash can be loaded onto prepaid debit cards, but those come with various fees.

Sylvie Gallier Howard, a top official in the city's Commerce Department, told City Council members last month she hoped the ban proves to be temporary. "Modernization is going to happen with or without Philadelphia, and we want to be part of it," she said.


A survey by the city found a handful of retailers don't take cash, including the salad chain Sweetgreen, at least one clothing store and some eateries at a University of Pennsylvania food court. Sweetgreen and Penn declined to comment on the legislation.

Before the City Council passed the legislation, Amazon expressed concern about the impact on its ability to open cashierless Amazon Go convenience stores in Philadelphia, city officials said. The company says on its website that it has Go stores in San Francisco, Chicago and Seattle. Customers, who must have Amazon accounts, swipe their smartphones as they enter the store and are automatically charged for any items they take.

An Amazon spokesperson declined to comment.

The Philadelphia law has several carve-outs. The cash requirement won't apply to parking garages or lots; wholesale clubs like Costco that sell to consumers through a membership model; or rental-car companies or hotels where a credit-card deposit is often required for incidentals.

The law also has a provision meant to accommodate the Amazon Go model, an aide to Mr. Greenlee said. It exempts "transactions at retail stores selling consumer goods exclusively through a membership model that requires payment by means of an affiliated mobile device application."

But Amazon told the city that provision won't apply to Amazon Go because, while payment would be made via mobile app, a Prime membership isn't required to shop there, said a Commerce Department spokeswoman.

The National Retail Federation, which represents the retail industry, opposes the new Philadelphia law and proposals like it, saying businesses should be able to choose which payment methods to accept. Cashless stores are uncommon in the U.S., and many businesses prefer cash payments because they avoid the credit-card transaction fees, it said.


The measure is also opposed by the Chamber of Commerce for Greater Philadelphia and the Pennsylvania Restaurant & Lodging Association, while the city's Commission on Human Relations and a number of community groups support it.

Steven Cook, co-owner of Goldie, a falafel shop, said he understands the impetus behind the new law but thinks the world is moving toward a cashless society.

The Goldie shop at Penn will start taking cash due to the legislation, and two other Goldie locations already accept cash, said Mr. Cook. "I don't think it's great policy," he said, "but it's not going to be make-or-break for whether our business is successful."

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[THCoins]

I think it will still be some time before we really have a cashless society.
For one, legislature is not ready. And in a lawless situation people and institutions will try to make advantage of this to the detriment of others.
The biggest downside to a cahsless system at the moment will turn out that the government (and that should also mean society as a whole) will further weaken the little control they still have over the financial infrastructure. It is not prudent to become more dependent on commercial alternative systems of which the primary aim is to maximize financial profit.

[Figleaf]

Having just made a series of transport ticket and hotel bookings by internet and debit card, I am longing for the return of ticket windows and cash. This is no way to treat customers. 

Peter

[Prosit]

I think cashless society will happen...eventually. I do think it is still a long way off for the entire world to be cashless.

Hummm I wonder what certain criminal elements use for money in an electronic economy?


Dale

[chrisild]

Just came across this today: Sweden Seen Likely to Force Banks to Handle Cash Transactions

"Sweden will likely push through a proposal to force banks to keep offering cash to customers who require it as the Nordic nation grapples with how to balance the rapid transformation into a cashless society." Interesting approach. However, the article also expresses doubts whether such a move would be legal.

Christian

[Prosit]

I think if I was the government and the money was mine (as it is property of most governments) if you want to use my property then some negation as to what you will and will not do with it seems reasonable.
Well, reasonable depends on which side of the table you are sitting on 
Dale

Just came across this today: Sweden Seen Likely to Force Banks to Handle Cash Transactions

"Sweden will likely push through a proposal to force banks to keep offering cash to customers who require it as the Nordic nation grapples with how to balance the rapid transformation into a cashless society." Interesting approach. However, the article also expresses doubts whether such a move would be legal.

Christian

[SquareEarth]

Until mobile devices become as cheap as cloths, No.

[Adam1080]

I don't think cash is becoming obsolete in these times... In time of economic crisis, the opposite tends to happen. Economic agents tend to save money and invest in safe securities to ensure their backs. At least, this is my vision of things and my personal way of functioning. For instance, an entrepreneur, I have recently decided to invest in gold and to avoid any form of risky investment.
..

[Jonathan Ouellet]

I think until phones become cheaper, and internet and wifi become more reliable then a fully cashless  society cannot work.
It's one thing to be cashless in a big city, but how will that work for rural or remote areas?

[Figleaf]

Good point. There are still many places on earth that are not even covered by the net. Internet has become quite cheap already, though. I remember the times that I'd come online for less than 1 minute a day, just to download email and the days that phone calls were quite expensive (Netherlands ==> US $5 a minute!) and you couldn't have video.

I am worrying that cash will be made obsolete because of commercial interest of banks, but I see the possibility that banks will be obsolete before cash is. They have virtually lost the foreign currency business and most insurance business. They have lost the mortgage underwriting business to pension funds. They are in the process of losing "actively managed"* investment funds. They are losing out to mobile FinTech banks (much cheaper than the outrage that is PayPal) on attracting retail customers. They are losing cash operations to central banks (more about that in the next episode of the WoC live events). Only the really big stuff is still safe: equity and bond emissions (including government bonds), bespoke investment clients (but family offices are leaving) and unlisted credit, but recently, I came across a company (Mosa Meat) that had done its own marketing to issue all its bonds.

See also this thread.

Peter

* What banks sell as investment funds have the fees of active management but the management is in reality passive, making them loss makers for clients. In France, even passive funds have active fees when sold by banks. Online investment is vastly cheaper and actively managed by yourself.

[Cnilsson]

Hi,

I am a Swede that moved abroad a few years ago and I have to say that in Sweden paying with cash has already been quite uncommon for a few years, in many places you cannot even buy a train ticket without using your bank card or an app from the train company for example.

But I believe that the cash has been demanded due to tourism, as it is rather difficult to travel around in Sweden if you only have cash and I would not recommend it.
Even when you travel now to Sweden and you need to do an PCR covid test , it is almost impossible, as you need to have something called Bank-ID that is  a personal  bank login only for Swedish residents and that you need to keep up to date if you leave the country. Which I thankfully did and managed to get my PCR test in time!

And as Sweden is in the European union I think that they need to consider how other countries work,  for example Belgium is the other way around;in many places you can only pay by cash, if you go to the vet for example!

So my conclusion is that I think no country in the European union will be cash free in the next coming years, due to the massive cultural differences and depending on how developed the different countries are .

[Elak]

Cash will always be used, imo. And if currency disappears people will revert to using gold or some equivalent as a medium of exchange.
An issue with electronic means of payment is surveillance - apps, cards, transfers - the 'system' knows what you are having for dinner, and then tries to sell you products based on it. Yäk!!

[Figleaf]

There is now an extra argument for the demise of coins as we know them: climate change. Metal producing and shaping needs large amounts of energy and produces significant amounts of CO2. Printing on paper that can be used for a weeks or so is a pure waste of resources.

I can see alternative materials for coins, e.g. the kind specialised pottery used in cars, but no alternatives for banknote paper. The oil-based plastic notes now considered "dernier cri" must disappear before 2030. I'd say that opens the way for high denomination coins replacing them.

Peter

[Tirant]

All this thing bothers me a lot; banks and governments seem to be very interested in remove cash and force us to do all our payments by credit cards, apps, or such things. Obviously, it means much more control over us: everytime we pay with an app or by card it remains registered somewhere, so they know where have we been, what have we bought, how much did we spend. Not to mention that banks will be the owners of our money and they can retain it if they want, or to charge us abusive commisions for using our hardly earned money.

The worst thing of it all is that most people don't seem to realize and only talk about how easy and comfortable is to pay with card.

Not to mention that a cashless society is only valid for regular adults. What about children? Do i have to give them their weekly pay by bizum? Do they need a credit card to buy trading cards, comics or candy? What about beggars, street artists or the musician who plays in the corners or the subway? Do they need to open a bank account and show the dataphone after each song?

I'm sorry, but everytime they ask me for a cashless society i answer NO, THANKS.

[Elak]

One of my objections to cashless payments is being charged when I spend my money. Also, electronic banking makes it easier for thieves to steal ALL your money when they break past security. And surveillance of course is the other big issue.

Whenever the is a shortage of cash, the economy finds a way to compensate for it.
Local currency projects and gold come to mind.