Is a Cashless Payment Society Coming Soon?

Not long ago, some experts in the payments world wondered not if our society would soon be cashless – but when it would happen.  

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Is a Cashless Payment Society Coming Soon?

Jul 22, 2019

Is a Cashless Payment Society Coming Soon?

Not long ago, some experts in the payments world wondered not if our society would soon be cashless – but when it would happen.

After all, people had long since adjusted to life on cashless apps, and stores like Sweetgreen and Shake Shack made headlines by declaring they were not accepting cash anymore, or would soon make the transition. Futuristic options like Amazon’s checkout-free store powered by facial recognition began to pop up, and then there was the Bitcoin moment in 2017, as the digital prophets who’d been telling everyone that BTC was the currency of the future seemed vindicated by its skyrocketing price.

Not so fast: Cash payments aren’t gone yet

These days, a cash-free future doesn’t seem nearly as close. Many states and cities, such as San Francisco and Philadelphia, have banned cashless stores, and both Sweetgreen and Shake Shack backtracked on their cashless plans. Bitcoin, meanwhile, has come and gone and come again, but it’s no closer to being an easy-to-use, everyday currency than it was two years ago.

These laws and decisions have not happened simply because the physical dollar is the legal tender of the United States – the cashless movement also creates issues of class discrimination in the eyes of many politicians. In San Francisco, Supervisor Vallie Brown mentioned specifically the homeless population of San Francisco – “they’re not banked,” she said, noting the unfair effects of cashless stores.

It’s true that many prominent stores still will not accept cash, but that needs to be put in a larger context. Cash is still the leading method of transaction in the United States, accounting for more than a quarter of the transactions in the United States in 2017, according to the Federal Reserve of San Francisco. Yet, for those in payments, there are many ways to interpret that statistic.

People pay in different ways

Today’s consumers have a wide variety of payment preferences. As the Federal Reserve of San Francisco notes, 74% of payments are made without cash, and yet cash is the top method of payments with only 26%. That’s because there are so many different types of ways to pay today – cash, credit, debit, mobile wallet, ACH, check, mobile apps, and more.

In a world where consumer satisfaction is a crucial differentiator, the ability to let the consumer decide can be a simple way to improve customer experience. People have different reasons for their preferences, and if they ask, “can I use mobile wallet” or “can I use a card” and get denied, it’s often followed by a sigh.

It’s not only important to allow customers to decide, it’s important to accept their payments quickly – studies show that people consistently overestimate wait-times by up to 36%, according to the New York Times. Modern point-of-sale systems can understand what method customers are trying to use without any prompting or input from a cashier. Tap-and-go chip cards, now on the rise in the United States, can speed up the process, too.

Cater to customers—whatever they want

In most ways, a business cannot cater to every possible preference of a hypothetical customer – there is no way, for instance, for a clothing store to have every style, every size, every color, all the time. But when it comes to payments, it can be a simple win for a business to ensure they accept the payment type their customers want to use.

Throughout the country, cash is the leading method of transactions, which means it’s a dangerous strategic decision not to accept cash right now. Cards and other options may continue to grow in the years ahead, and perhaps someday we’ll arrive at the cashless society that many have been predicting. But for now, businesses would do well to accept continue accepting all payment types – including cash.

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