By Bruce Apar
At the end of Part 1 of this two-part topic (see October 19 PennySaver), we learned from an article in USA Today that Detroit retailer Kit and Ace does not accept cash payment from its customers.
“I think we are sort of on the edge of seeing more and more businesses that don’t take cash.” That’s what economist Jay Zagorsky of Ohio State University told USA Today a couple of months ago for a story whose headline asked if we’re headed for a cashless society.
Other monetary experts interviewed by the publication have similar views on the steady, if slow, disappearing act that cash is making in our culture. Federal Reserve Bank economist Paul Traub explains in the same article that, unless a state legislates otherwise, there is no federal law or regulation that requires a business to accept cash payment for goods or services.
Another economist whom USA Today spoke with, Harvard’s Kenneth Rogoff, isn’t calling for a cashless society. He’s calling for a “less-cash” society. One suggestion he posits is reducing the number of $100 bills in circulation. At the other end of the spectrum, there have been intermittent calls for reducing, or eliminating, the pennies in circulation. Owing to their sparse use, who would argue that making fewer cents makes sense.
In his book, The Curse of Cash, Mr. Rogoff explains that big bills like a C-note facilitate crimes like tax evasion and other illegal activities. Think of those movies where a briefcase might contain hundreds or millions of dollars in illicit gains. Rest assured those aren’t $5, $10 or $20 bills. The Harvard professor makes the point that a million bucks in $100 bills weighs a manageable 22 pounds and in fact can be packed inside a standard-size briefcase.
USA Today’s piece also referred to a survey on “Consumer Payment Choice” conducted by the Federal Reserve Bank of Boston in 2013.
Among its findings was less use of paper checks, and almost one-in-three payments made with a debit card. I don’t doubt it. More than one in four payments are with cash, and a similar proportion are made with credit cards. That adds up to 80% of transactions made with either legal tender or plastic. The remaining 20% are handled by checks, money order, prepaid cards, or electronic transfer of funds. In the average month, consumers make 40 transactions.
My own experience is that it’s a major convenience when I order takeout meals online so I don’t have to stand on line. Using a smartphone app, I order and pre-pay for a cup of coffee or a salad and then swoop into the store to pick up my order without waiting. You should check it out.
What’s next in future forms of payment? With voice recognition all the rage, it won’t be long before we’ll just only have to speak the amount of the transaction to active payment. After that—mind control payment. Except it’ll cost a lot more than a penny for your thoughts.
Bruce Apar is Chief Content Officer of Google Partner Agency, Pinpoint Marketing & Design, as well as an actor and a regular contributor to several periodicals. Follow him as Bruce The Blog on social media. Reach him at email@example.com or (914) 275-6887.