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The unintended consequences for consumers of a cashless society, according to Forbes

Sept. 23, 2019 Share Source
Where is the cash debate at in 2019? Recent article from Forbes discusses some of the key the motivations behind pro-cashless and pro-cash reasoning.

In a nutshell, the cash debate refers to the ongoing discussion about whether or not cash should be abolished.

The war on cash is waged by governments seeking more control over their people, and private companies seeking to monopolize the payments landscape. Their reasoning? That cash should be abolished because of the association that it has with tax evasion, crime, and terrorist funding.

Excerpt from Forbes

First, it can be more costly. For local small businesses, solely accepting cards means increased expenses. Merchants will be faced with paying card processing fees and those may ultimately be passed onto the consumer. For these types of businesses, accepting cash provides a smooth operation and offers additional options to their clients.

'Consumers should be able to decide whether they want to leave their personal data with a business. If you take cash out of the equation, they no longer have that choice.'
" Frank Sorrentino Chairman and CEO of ConnectOne Bank Author of Forbes article (Aug 29, 2019)

Consumer privacy is another issue stemming from a cashless economy. While the move to a digital economy has created tremendous benefits in terms of convenience in paying for goods and services, it also creates a digital trail every time someone makes a payment. Consumers should be able to decide whether they want to leave their personal data with a business. If you take cash out of the equation, they no longer have that choice.

Finally, and just as important, economic inclusion will take a major step back with the move to a cashless economy. It would punish consumers who can’t get a credit card, either because of income or lack of credit. It’s understandable that financial standing should matter for financing a home or car, but it shouldn’t be a consideration for smaller purchases. Someone should be able to buy a cup of coffee or a bag of groceries no matter their credit score. The cashless economy would cut these folks out of the system.

While more and more of our activity is shifting to cashless transactions, the topic of shifting to an entirely cashless economy is still up for debate. For now, the best way forward is to continue to let cash and digital transactions co-exist.

Read full Forbes article here

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Last Updated: Oct. 1, 2019

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