Not that long ago, many transactions required some sort of paper. Some of us on staff here are old enough to remember when people commonly wrote checks for things like gas and groceries. Credit cards were in use, especially beginning in the 1970s and 1980s but often that even involved paper! Businesses took carbon paper (look it up if you don’t know what that is) imprints of your card and called in their transactions by hand. Once card scanners came in, the world began its progress towards a cashless system.

There are some problems…

However, there are some problems with cashless systems and the biggest barrier is inclusion. Especially, for people at the lower end of the poverty scale, their transactions still take place in cash. For many, they are often paid in cash, especially if they work “under the table.” Even temporary workers who get checks don’t deposit them in a bank or credit union. Instead, they use a check cashing shop or service at a grocery store and then proceed to spend the cash. A true cashless system, must include everyone. Making it smartphone based is a start but not everyone has a smart phone. For many older people, technology is confusing and they are only comfortable using cash, checks, or cards sometimes. Philadelphia recently banned stores from refusing cash because it unfairly turns away poorer people who do all their transactions in cash.

The system can never go down

As we all know, electronic systems don’t always work. A power station can go out and a whole city can lose power. When PayPal goes out, many online payments grind to a halt. If MasterCard or Visa have problems, credit card systems also grind to a halt. This means that a future where cash is very rare, also means that the system on which it is built needs to be incredibly resilient. Real cash doesn’t require an esoteric system is to be used, simply the willingness of both parties to accept it as a value. For a cashless system to compete with cash, it has to be good, really good.

In this video, thought leaders talk about the possibility of a cashless future and what that system might look like.