A customer pays with a credit card at a coffee shop in Las Vegas on June 14, 2023. Cashless policies disadvantage a number of groups, including low-income people, the homeless, undocumented immigrants and older adults. — The New York Times
Some things you can no longer do with cash: Buy a well-loaded hot dog at any of the five Devil Dawgs eateries in and around Chicago. Order a Vermont Pale Lager from Hill Farmstead Brewery’s taproom in Greensboro Bend, Vermont.
Attend the annual BeachLife Festival in Redondo Beach, California, or buy food, drinks or merchandise there. Purchase admission to the Home of Franklin D. Roosevelt National Historic Site in Hyde Park, New York, or to many other sites maintained by the National Park Service.
The park service’s expanding no-cash policy exasperated several would-be visitors enough for them to sue in federal court earlier this year.
Anne Ronan, 70, a retired attorney, walks around Lake Merritt in Oakland, California, a few times a week. After the three-mile-plus trek, she sometimes stops at one of two local cafes. Neither accepts payment in cash.
Nor do a restaurant and a cocktail lounge nearby on Grand Avenue. “I don’t find it unusual anymore,” Ronan said.
To buy coffee and a croissant, she routinely carries a credit card in her pocket. She doesn’t find that bothersome, but “as a public policy, it’s not a good thing”.
Jay Zagorsky, an economist at the Boston University Questrom School of Business and author of a forthcoming book called The Power Of Cash, agrees.
Though the United States is not yet a cashless society, “this is picking up speed all over the world,” he said.
Some no-cash practices date to contagion fears after the outbreak of Covid-19; others are intended to discourage robberies.
“It has deterred a lot of crime,” said Devil Dawgs CEO Dena Bachenheimer. The chain went cashless in 2021.
But such policies disadvantage a number of groups, including low-income people who don’t have bank accounts, people who have accounts but don’t qualify for credit or debit cards, the homeless, immigrants in the country without legal status and older adults.
Consumers of any age can encounter problems with electronic payments, despite their convenience and ubiquity. (Although every bill declares it is “legal tender for all debts, public and private,” there is no federal law mandating that private businesses accept cash.)
One example: “We’re seeing an increase in major natural weather disasters, and they take down the cashless society,” Zagorsky said. “It depends on electricity, telecommunication networks and secure computer networks,” all threatened by floods, hurricanes and fires.
Moreover, “the idea that we have trustworthy computer networks is farcical,” he added. “In a cashless society, mobsters from Thailand or Kenya can attack you.” At least with cash, “a thief has to be within striking distance.”
Researchers have reported for years that consumers spend more when they’re using credit and debit cards, which obscure what economists call the “pain of paying”.
Tapping or swiping, gratifying consumers immediately while delaying the eventual pang, feels less real than handing over cash.
“It’s too easy to make a purchase with your phone or credit card – you just touch it,” said Ruth Susswein, the director of consumer protection at Consumer Action, the national educational and advocacy organisation. “It’s like magic, until the bill arrives.”
Privacy concerns, too, cut across age differences.
“If I give you a US$5 bill and you give me a sandwich, no one is the wiser,” said Jay Stanley, the senior policy analyst at the ACLU.
By contrast, the middlemen facilitating digital transactions – credit card companies, banks, the tech giants behind mobile apps – “surveil the hell out of everything we do,” then sell consumers’ data, he said.
But older people may face particular obstacles as cash loses ground to electronic payments.
“A lot of these cashless systems are implemented through smartphones,” Stanley said. “The level of smartphone ownership is lower among older adults, and facility with using them is also lower.”
True. Pew Research has reported that only 79% of people over 65 have a smartphone, compared with 97% of people ages 30-49. Consumers 55 and older used cash for 22% of payments last year, according to the Federal Reserve, compared with 12% among younger groups.
Last fall, when a federal survey asked respondents if they had used the Internet for financial services such as online banking and bill paying, or for sending money via services such as Cash App, Venmo or PayPal, 85% of those in their 20s and 30s said yes.
The proportion dropped substantially among older consumers, to 70% of people in their 60s and to 64% of those in their 70s. Among consumers over 80, only about half used the Internet for financial services.
“Cash is very simple,” Zagorsky noted. “No buttons to push. No passwords to remember.” When businesses and government agencies insist on electronic payment, “we’re putting another burden on the elderly that we don’t have to.”
The threat of fraud also affects seniors disproportionately. “Online scams often target older adults,” Susswein said.
The Federal Trade Commission recently reported that adults 60 and older are less likely than younger adults to report losing money to fraud, but when they do, the lost totals run substantially higher. The number of seniors who have reported losing US$100,000 (RM443,782) or more has tripled since 2020.
Older adults are far more likely than younger ones to lose money to tech support scams, lottery and sweepstakes swindles, and family impersonations, the report said. Losses to investment and romance cons continue to climb, too.
Electronic payment can also harm low-income seniors by making overspending easier.
About 14% of people receiving Social Security retirement benefits rely on them for 90% or more of family income, the Social Security Administration said. The average monthly retirement benefit in 2024: US$1,907 (RM8,462).
There’s not much margin for the kind of overspending that digital transactions make easier.
A few states (including Massachusetts, Colorado and New Jersey) have passed legislation requiring businesses, with certain exceptions, to accept cash. Legislators in other states (Florida, Vermont) have introduced similar bills.
Several cities – New York, Philadelphia and San Francisco among them – have also adopted laws prohibiting no-cash policies.
The action may soon shift to Congress. A bipartisan group of senators and representatives has sponsored the Payment Choice Act, requiring retail businesses to accept cash for on-site purchases of US$500 (RM2,218) or less.
First introduced in 2019 and reintroduced with some revisions last year, “it’s gathering dust,” said Jeff Thinnes, whose consulting firm in Virginia represents the newly formed Payment Choice Coalition.
Its corporate supporters include armoured car companies, a bank based in Cincinnati, a risk management firm and a manufacturer of currency printing and sorting machines. The coalition intends to resurrect the legislation and push hard for its passage.
“We’re not arguing for the demise of credit cards or payment apps,” Thinnes said. “We want cash to remain a choice.”
Resistance from the biggest banks, credit card companies and tech giants could be fierce, but consumer advocacy and privacy groups might lend the bill their support.
“We have a good shot at moving this forward,” Thinnes predicted.
Plenty of older adults are adept at mobile apps or comfortable with credit cards, but still want the cash option preserved.
Maureen Edelson, a consultant in Montclair, New Jersey, visited the Penn Museum on the University of Pennsylvania campus a few years ago and stopped to buy a bottled drink at its cafe. The cashier regretfully told her she could not pay with cash (a policy related to Covid that has since been dropped).
Edelson, 67, could have pulled out a credit card, but “it’s not my habit to use it for things like that,” she said. “That’s not what my generation does.”
On principle, she asked for directions to the nearest water fountain. – ©2024 The New York Times Company
