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Cashless Society: Do We Really Have a Choice?

February 12, 2019  I   A. Bruce Crawley


In recent decades, Philadelphia has learned how to successfully employ its world-class restaurant trade and other attractions to re-brand itself as a top-tier, contemporary destination for tourists, new residents and corporate relocations. 


In direct opposition to that successful new packaging, however, Philadelphia is now allowing itself to be defined as one of the few major U.S. cities in the country to stand regressively in the way of the global shift to a cashless society.


Cashless proponents have presented abundant evidence that their approach to purchase transactions results in lower costs related to the movement and security of cash, greater transactional efficiency, and faster customer service. They also offer proof that cashless transactions lower risks of robberies and embezzlement, and produce more efficient record-keeping for both sellers and purchasers.

Accordingly, there has been a growing phenomenon of national food service and retail chains that have adopted national cashless policies for all, or most, of their outlets. In that group of retailers and national food chains, of course, are brands such as Sweetgreen, Amazon Go, Walt Disney Co., Shake Shack and even Starbucks, in a Seattle-store test.

According to, the percentage of U.S. transactions made in cash in 2017 was 30 percent, down from 33 percent, in 2015.


At the same time, cash usage in the U.S. is still substantially higher than in Western European countries. In 2015, as an example, U.S. cash transactions constituted 13.1 percent of national GDP, as compared to 7.7 percent of GDP in Finland, 7.1 percent in France, 7.4 percent in Netherlands, 5.6 percent in Sweden and just 4.5 percent in Switzerland. And, based on recent trends, PYMNTS estimates that cash transactions share in the United States will represent 11.7 percent of its 2020 GDP.


The justification for Philadelphia, New York and New Jersey legislators’ curious resistance to these global and national trends has been their concern that cashless retailers, restaurants and service providers would represent a form of “discrimination” against low-income and people of color, who are disproportionately “unbanked” and dependent upon cash for purchases and bill payments.


While that logic may sound reasonable on the surface, those who present it seem not to be making the connection to the factors that create the “unbanked population” and its reliance on currency, in the first place.


They seem not to factor into their support for the “unbanked,” for example, the reality that Philadelphia, with a 25.7 percent poverty rate is the poorest large city in the country, as compared to the national average poverty rate of 13 percent. Even worse, the City of Brotherly Love and Sisterly Affection also claims the nation’s highest, rising rate of “deep poverty,” with 14 percent of citizens living below 50 percent of the poverty level.


Why is that the case?


Whether city residents are able to use “cash” or “cashless” transactions seems not to be the core problem, at all. The bigger issue is the fundamental lack of economic access and spending power for far too many of those same shoppers.


Here’s the question:Does it really matter to the 400,000 Philadelphia residents who are challenged to live on the $25,000-or-less-as-a-family-of-four poverty level, whether a center city restaurant or national clothing chain accepts cash purchases, or not?


For those wrestling with how to address the issue of the inevitable onset of the cashless society, the greater issue ought be the establishment of a simultaneous, concerted effort to create a more equitable access to the overall economy for those who are currently “unbanked” or poverty-stricken. There should be a clear path to increasing household incomes from the $25,000 poverty level, to the City’s $41,000 median household income.


Legislators and advocates should not use the plight of the “unbanked 6 percent” to rationalize the City’s lack of Inclusion in the technological future of global payment systems. Rather, they should be encouraged to sit down with private sector leaders to finally remove the zip-code-related barriers that have long blocked Philadelphians from having the kind of economic access (jobs, contracts, etc.) that has always been available to those who live just a few census tracts away, in more upscale sections of their own city, or in the surrounding suburbs.


Is it possible? Consider this: Since 1978, China has lifted 700 million people out of poverty, more than twice the entire U.S. population. It can be done.


Instead of giving a global appearance of a city with its finger firmly implanted in the dike, blocking the flow of financial technology and improved customer experience, there should be efforts to address the real reasons for the declining ability of Philadelphians to shop and dine where they choose, i.e., rampant, uncontrolled and unmanaged poverty rates.


That would seem a legislative and economic agenda that not only Philadelphia but the other nine cities on the top 10 highest-poverty list should also be able to get behind.


Then, let’s take advantage of every technological advantage we can muster to make the economy more efficient.


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A. Bruce Crawley is president, CEO and principal owner of Millennium 3 Management, Inc. (M3M). Read More...

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