Retail and the cashless society

As smartphone-based payment options like Apple Pay catch on, the idea of the U.S. functioning as an entirely cashless society seems less and less like something out of science fiction. For some tech fanatics, it's a no brainer. For others, it's a terrifying prospect. A recent think-piece from Fast Company speculates that a cashless society would be one in which some — perhaps significant swaths of the population — could end up feeling the downside. The article cites concerns about a cashless U.S. such as a lack of privacy (because it would be impossible to make a financial transaction that was not tracked) and, perhaps more disturbingly, the negative impact on the unbanked and underbanked. A startling 17 million Americans have no bank account and an additional 51 million are underbanked, according to a Bankrate article. People become unbanked or underbanked for a number of reasons, such as severe debt, a lack of steady employment or a desire to avoid unexpected fees. Undercutting the perception that Generation Z is homogenously tech-driven, FDIC data indicates that about half of people between 18 and 24 are either unbanked or underbanked. A cash-free society could also adversely affect retailers and grocers, especially those in low-income areas, which serve such populations. Retailers likewise may have reasons for keeping cash around (and ones that don't involve under-the-radar economies). While point-of-sale solutions like Square have streamlined credit card processing capabilities, removing and simplifying third-party relationships that have made processing cards difficult for SMBs in the past, they are not perfect. Some business owners have reported that there are tradeoffs when using Square: lack of support, held funds and even unexplained account cancellations. And there seems to be acknowledgement among even major retailers that segments of the population still want and/or need cash. In 2012, Walmart implemented its "Pay with Cash" program, which allows customers to purchase from their online inventory using cash instead of a credit or debit card.

• What Happens When We Become a Cashless Society? - Fast Company
• 6 reasons to be unbanked or underbanked - Bankrate.com
• Square Review - Cardpaymentoptions.com
• Walmart customers use cash to buy online - RetailWire

Photo: Square