Viewpoint: Show Me the Money: Does Going Cashless Hurt Financial Inclusion?
Going cashless might seem the logical route for retailers and other establishments that want to take full advantage of the digital economy. The Amazon Go convenience stores in Seattle, Chicago and San Francisco, the Mercedes-Benz Stadium in Atlanta, and a few retailers in Philadelphia are among those to embrace a cashless system.
However, the City of Philadelphia has now stopped the cashless brigade in its tracks, making the case that it excludes people who don’t have credit cards or bank accounts, or those who simply prefer to pay cash. Come July, an ordinance the city passed recently will take effect, with exceptions for some establishments like parking garages.
At first glance, the ban on cashless stores seems to fly in the face of the drive towards a truly digital economy, but both sides of the table have compelling arguments. “On one hand, as global financial institutions are becoming more developed, efficient and advanced, there is less and less need for cash,” said Itay Goldstein, Wharton professor of finance. “On the other hand, you still have populations in poor areas that do not have access to many of these advancements, and as a result, they rely on cash. There is clearly tension.”
Philadelphia is not alone in banning cashless establishments. A 1978 Massachusetts law requires all establishments in the state to accept cash; New Jersey has a similar bill awaiting the governor’s signature; and New York is considering such a law, according to a Wall Street Journal report.
Photo courtesy of Burst.