Cashless Businesses: Efficient or Exclusionary?

By Caroline Santoro

 As restaurants and businesses around the country move towards cashless payments,  legislation introduced in Washington D.C. and the Bronx looks to prevent businesses from denying cash payment. Businesses like salad chain Sweetgreen and DryBar salons explain their choice to go cash-free because of the low percentage of customers who use and prefer cash (around 11% for Sweetgreen), the decrease in wait time without counting change, and the decrease in theft without having cash present in the store. Sweetgreen says that “forward-thinking businesses are going cashless,” but is that a positive trend? Or does it discriminate against those without access to credit or debit cards?

Government data cited by The New York Times classifies 26% of American households as either without a savings/checking account or “underbanked,” meaning they use products and services outside of the standard financial system. These groups, consisting mainly of low income and non-white citizens, are being shut out of the products and services offered to those who can pay with a credit card. As a result, cashless businesses arguably discriminate against the poor by not offering them an alternative way to pay.

In 2017, Visa declared a “war on cash” and offered businesses as much as $10,000 to go cashless. Their efforts towards “more convenient, secure and easy transactions” also provide Visa the fee for every payment processed on their network.  In addition, cashless transactions provide credit card companies and the government information to track customers’ behavior. In light of the privacy concerns raised by companies like Facebook and Amazon, people may wish to use cash to maintain the confidentiality of their transactions.

Although there are clear benefits to going cashless, including sustainability, safety, and efficiency, businesses going completely cash free deny customers an opportunity to conduct business anonymously and present an opportunity for discrimination and stigmatization of those without access to cash-free payment methods.

References

Bellafante, G. (2018, December 06). How the Cashless Economy Shuts Out the Poor. Retrieved
from_https://www.nytimes.com/2018/12/06/nyregion/how-the-cashless-economy-shuts-o
ut-the-poor.html

Cashless Challenge. (n.d.). Retrieved from https://usa.visa.com/about-visa/cashless.html

CBSNewYork. (2017, February 03). Some Businesses Going Cashless As Americans Carry Less
Paper Money. Retrieved from https://newyork.cbslocal.com/2017/02/03/cashless-businesses/

Chappell, C. (2018, December 13). New York City and New Jersey lawmakers target cashless
businesses, alleging bias against the poor. Retrieved from
https://www.cnbc.com/2018/12/13/nyc-nj-target-cashless-businesses-alleging-bias-against-the-poor.html

Dawson, G. (2017, December 21). At Sweetgreen, a Suitcase Full of Cash Won’t Buy You
Lunch. Retrieved from https://www.nytimes.com/2016/07/31/business/where-a-suitcase-full-of-cash-wont-buy-you-lunch.html

Marks, G. (2018, July 15). Why going cashless is discriminatory – and what’s being done to stop it. Retrieved from https://www.theguardian.com/business/2018/jul/15/cashless-ban-washington-act-discrimination

Rieman, M. (2018, September 07). The Challenge Of Going Cashless. Retrieved from
https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2018/09/07/the-challen
ge-of-going-cashless/#21a970182d99