How Feasible is a Cash-Less Society?

vocaljess asks a question that has been on many a mind over the past decade, if not longer: "I just today realized that it has been over a week since I physically handled cash money. Due to the use of checks, debit cards, online shopping, automatic bill pay, direct deposit, etc, my family operates on a cash-less basis in the vast majority of our business transactions. With more and more establishments accepting credit/debit cards, how many others are heading the same way?" Are the advantages of a cash-less society really all that advantageous? One of the largest proposed advantages of a cash-less society is one of limited-theft, well even though money in a cash-less society wouldn't be tangible, it's no less theft-proof...it just takes a theif of a different calibur to pull it off. Do you feel we are heading toward a cash-less society? Do you think if such a thing were to happen we'd be any better off than we are today?

"Think about this: if the cumulative value of everything in the world were expressed in measures of gold, which theoretically backs the majority of world currencies, does enough gold physically exist to back the paper money value, or has the paper money itself become valuable?

And what about this: how is it that the people who depend upon cash are usually in the middle of the financial spectrum, neither the poorest nor the richest? In most extreme poverty situations, transactions are based on barter. For most middle class people and above, transactions involve checks, credit, and electronic fund transfers. For the working poor, most transactions are done in cash. How does all of this add up to the trend toward a cash-less society, where money is nothing more than numbers in a computer transferred from one account to another, to another? How far off is that future?"

Cash is inconvienent

[Dan Ost]

The only thing that I use cash for is vending machines.

With any luck, future vending machines will take visa...

I like having a monthly summary of how much I've spent,
where I spent it, and when I spent it. It makes planning
easier and more realistic.

A cash coincidence?

[Laplace]

Over the last six months I have made an effort to pay for as much as a can with cash. For groceries, gas, books, and gear, I whip out my wallet and throw down as many twenties as I need. Its has a few nice benefits.

1) I stay in my budget. I take out cash when I get paid, and know exactly how much I have to spend until my next pay check.

2) I get less junk mail. No more grocery store fliers, no more technical junk, jut good ol' mail. Coincidence? I think not.

3) People who provide services for me (yoga, karate, acupuncture, housing, servers, etc) get instant payment, and can do what they want with it, including not reporting taxes. This makes them happy.

I only use credit cards when I absolutely need to, and am much happier for it.

transaction charge

[SirSlud]

Considering that most cashless transactions impose some sort of transaction charge, I patently refuse to accept a cash-only society until these sorts of electronic money services are free. Otherwise, you'd be paying some sort of X% tax on every 'cashless' transaction you make. I prefer cash, if only for this reason alone. (Nevermind that the tangible quality of real cash is an important part of appreciating your hard earned money.)

Re:Not possible, lower class vices need cash

[jandrese]

That exactly the kind of thing people generally don't want showing up on their monthly bills though.
$300 for a massage?!? I don't remember a massage...

Re:Well, if you enjoy being tracked...

[NineNine]

Yes, you're very anoymous now.

Jeremy Simmons
24647 Lincolnway St.
Plainfield, IL 60544
US
Phone: [phone]
Email: [e-mail]

Re:Not possible, lower class vices need cash

[bonius_rex]

not ture, the strip clubs I've ...ahem.. heard of have machine that accepts credit cards, and gives you fake money to tip the girls.

Not that I know about this first hand or anything, but they ussually come in denominations equivelent to the cost of a lap dance at that particular establishment.

Re:McDonalds

[ethereal]

Some McDonald's in Illinois, at least, have started accepting the Mobil speedpass keychain thingy, so that you just swipe and it's recorded on a credit card. If the other gas stations aren't careful, speedpass is going to become the new basis for convenience store and other small purchases.

I don't have a speedpass, though, because I usually only buy gas at a gas station, and the delay is not the card authorization at the pump, but the time from the authorization until the pump actually starts dispensing. If I could get the time from swipe->gas starts flowing down to about the time to unscrew the gas cap, I'd be happy. Only then would a speedpass make sense at a gas station.

Re:McDonalds

[Matey-O]

I hate to break it to ya...but Mickey-D's DOES accept credit cards.

Which makes me wonder if Amex Charges McD $1.25 for a $.99 burger...

Re:Not possible, lower class vices need cash

[hexx]

When the lower class sorts (you know, Joe Sixpack and friends) amuse themselves, cash often plays a part. You can't stick a dollar bill in a stripper's thong with a debit card, you can't buy marijuana with a credit card, pool games take quarters, and most bars only take cash.

This is faulty (and plain dumb) reasoning.

1. You can't stick a debit card in a strippers thong, but you can stick something like a Disney Dollar... strip bars can sell "Stripper Dollars" - good only at their establishment - for money.

2. You can't buy Marijuana with a credit card? Why not? Maybe it'll be sold as "spicy oregano". Maybe it'll be sold as a "relaxation service" to hide the trail. Cash-less society does not mean one person can't pay another person. People will just learn to hide what was really bought/sold.

3. Pool games taking quarters and bars taking cash is just silly - I've seen pool tables and vending machines that take credit cards, and bars that take cash only are a relic of days gone by - it's easy (albeit sometimes expensive) for a legitimate business to accept credit cards.

And of course, the "lower class" abstraction is just silly. I'm not lowerclass, and I go to strip clubs!!!

Re:..right with a paper-less office

[kilgore_47]

I like cash. I also like paper. I'll bet i'm not the only one.

Nope. Lots of people love to feel their money in their hands, love to count it, love to smell it, etc. A buddy of mine keeps all his money he intends on spending in a month in cash form on him at all times.

I think it's a matter of preference though. Personally, I use my Visa CheckCard or my PayPal account for just about everything. Paychecks go in the bank, and anything that comes out can come out electronically.

99% of what I buy can be paid for by visa, and I like leaving myself a clear record of what I spend money on. Sure, I have to hit the atm from time to time (the anonyminity of cash is nice for certain purchases)... but I've probably made it through a month before without spending more than $40 of actual green cash (drug expenses aside).

So, I think it's a matter of preference. Some people like the modern cashlessness. But I think the feel of money in a person's hand is powerfull enough that we won't be entirely cashless for a long time.

Living in a cash economy

[Old Man Kensey]

The simple fact of life is, things tend to heterogenize. We'll always have people who live in the rarefied strata of the super-rich and never handle their own money (cash or otherwise). We'll always have the working poor who deal (and often get paid) entirely in cash day-to-day.

We're at about the midpoint of the transition, I'd say. There are about as many places that won't take your Visa card as won't take the $20 in your wallet (or at least will give you grief over it, like a friend got the other day at Best Buy). But there's still the impetus of "legal tender" to keep cash around.

I lived in a pure-cash economy for about 3 years. I was moving and changing jobs, and closed my bank account. Then as I was about to open a new one, the bank I was moving to got swallowed up by Wachovia, so I held off. By the time I got around to it again, I didn't feel like going through the bother. (I finally had to when the company I was working for got bought by EA and my paychecks started being drawn on Wells Fargo.)

My co-workers who have always had credit cards, checks and ATMs don't understand how one can live in the "cash economy" without sacrificing quality of life, but it can (mostly) be done.

The biggest hurdle is things that require a reservation. If you travel you're going to have to resign yourself to paying up-front for your airline ticket and playing Hotel-Motel Lotto when you arrive (unless you're staying with friends or family). Renting a car will also be off-limits to you unless you have a couple of thousand dollars to spare for the duration as a deposit.

Apart from that, you really don't notice much. Sending money through the mail (to pay bills, for example) will involve getting a money order from the post office, which is in the neighborhood of a dollar per MO -- and USPS money orders have the advantage that a receipt is presentable in court as prima facie proof of payment. Getting a loan can be a little trickier if you have no previous loan history, but you can use landlords as references. Also, your utility history will most likely show up on your credit history, especially if you have a cell phone. And speaking of utilities, you may have to give them deposits before they will start service, but these are usually payable in installments.

You won't be able to buy things instantly online, but most places will be happy to bill you or ship after receiving payment.

If you can forego instant gratification and avoid things like needing to rent a car, there's nothing preventing most Americans from living a pure cash lifestyle.

Re:It's all about the "funy money". AKA:counterfei

[Anonymous Coward]

60 minutes did a special report on that rumor, actually. The Nazis (non-Godwin Nazis) had secured printing plates and were printing flawless British notes. They used them to support the German war machine and were prepared to dump them en masse into the British economy. Unfortunately they lost the war before they had that chance.

I wish I could remember the name of the lake that they submerged all the funny money in. It was pretty neat how the researchers went down with manned subs and retrieved the papers.

Not Necessarily

[jd]

"Smart Cards", such as the one Mondo make, have the cash digitally stored on the card. You then directly transfer data from the card to the recipient, without the need of any third-party.

This has been tested in Swansea, UK, and I believe it proved reasonably successful, at least with the vendors that used it.

As I see it, credit/debit cards will die off, over time. You can't keep spending ahead of yourself, and expect to make ends meet. The recession of the Thatcher/Reagan era was largely a product of free-spending on credit. The amount spent vastly exceeded the amount available, and the economic system was not able to cope.

Further, credit/debit cards DO need a third-party, which is inherently more expensive than having the electronics do all the transacting on-site. It's therefore much cheaper for banks to churn out a bunch of "smart cards", with suffcient processing power to handle decent public-key encryption, than to maintain a clearing-house for credit cards.

Since cheaper usually wins, in the end, a system involving distributed handling of transactions will always be preferable to a centralized one.

culture and money outside america?

[kuma]

i'm no expert, and nyc banking has a decidedly police state flavor, but... my wife bounced the rent check more than once because the japanese do not really use checking, everything is done via fund transfers.

(she would deposit checks without understanding the bank could take over a week to credit the account)

so the (japanese) landlord demands cash every month. i think its common for many people to carry tens of thousands of yen (hundreds of dollars) *all the time* with *zero fear* of being robbed in japan, but here in manhattan it's a different story.

so the japanese carry more cash than typical americans, and seemingly use more automated money transactions as well... what about other cultures and money, anything to be learned?

Re:Not Necessarily

[Anonymous Coward]

The kind of credit that moves economies has almost nothing to do with credit cards.

As for smart cards being cheaper, you have to remember that banks are going to charge you to transfer money onto the card.

Credit beats debit any day of the week precisely because you can "spend ahead of yourself". It isn't about going into debt, but making someone else pay now while your money works somewhere else for a month. If accumulating too much debt is a problem, it's certainly not the fault of the credit industry.

Big Brother/Antiterrorism

[Anonymous Coward]

I was peripherally involved with a smart card-based electronic money venture in the mid-90s. This system permitted card-to-card transfers in which no central server needed to be hit. Even at that time, the U.S. Gov't agencies we spoke with were not keen on keen on this because of the money laundering, tax-evasion and illegal transactions (e.g. drug) potential for the system and seemed to want to have a maximum storable value for a card (for instance, $300) and a maximum transaction level (for instance, $1000/day). In the wake of recent terrorist activities, I would think these concerns would be heightened and that "unaccounted" (no central server) or anonymous electronic cash systems would meet governmental resistance.

Re:..right with a paper-less office

[byran lei]

>Nope. It's faster to swipe, print, and sign than wait for change.
>Plus, carrying cash is heavy and uncomfortable.
>
Bullshit. You've never been in a check-out line in a supermarket or department store, have you? The biggest hold-ups in most lines come from the people using their atm,debit and credit cards. The people using cash usally zip right through.