By Melissa Rivers and Nancy M.
Davids
on August 10th, 2016
Posted in Retail, Retail Sales,
Technology
From the time we were little, putting birthday money
into our piggy banks, cash has always been an important part of our lives. Now,
imagine a world where cash is no longer king. Like so many other things that we
thought were futuristic, a cashless society is becoming more of a reality and
less of a fictitious idea.
The use of cash has been steadily declining, with cash
payments expected to continue to fall by 30% over the next 10 years. Countries
such as Denmark, Sweden and Thailand have recognized this and have been
trending toward becoming cashless societies. These countries have enacted laws
that permit businesses to ban cash payments, and in some instances, require
payments by mobile applications or credit cards. In Thailand, commercial and
state run banks have introduced a payment system which is linked to a mobile
phone number and allows the consumer to pay for goods and services without the
need for cash.
Businesses in the United Kingdom are also jumping on
board. Citing increased efficiency and speed during the lunch time rush, the
salad chain Tossed has recently introduced cashless restaurants in the UK.
Another example, Waitrose, a UK based supermarket chain, has recently unveiled
the first cashless supermarket in the head office of Sky. While this store
contains only 1,700 square feet, it will serve over 3,500 customers who will
use self-service kiosks to pay with credit cards and mobile applications. Both
retailers are expected to introduce cashless platforms in more locations.
Similarly, many benefits of the cashless world are
being seen here in the United States. The ban on cash saves employee time and
payroll costs by eliminating cash registers and trips to the bank, gas for
armored cars, streamlined accounting and the ability to track customer habits
to increase retail sales. The salad chain SweetGreen and the sandwich shop,
Amsterdam Falafelshop, each headquartered in Washington D.C., are among the
growing number of businesses that have started testing the cashless market.
Don’t turn in all of your green just yet,
however. Despite the increase in mobile
applications, cash is still used to complete over 80% of transactions
worldwide. Security risks are still at the forefront of electronic
transactions. Although the banks, credit
card companies and inventors of mobile applications are working tirelessly to
find ways to create mediums that consumers can trust and feel safe using, the
risks still exist. In addition, many people still depend on cash – people who
survive largely on cash tips (i.e. valets, doormen), smaller stores that cannot
afford the high fees that credit card companies charge, and individuals who
cannot afford the latest smart phones or who have credit issues. It is also
worth considering the dilemmas that we will face when networks are down and
consumers can’t purchase groceries, gas or oil because cash options are not
available.
There is currently no Federal statute mandating that
businesses must accept cash as payment for goods and/or services. Absent a State
law to the contrary, private businesses are therefore free to develop their own
policies on whether or not to accept cash. Massachusetts is one state that does
have a law that prohibits retail establishments from requiring the use of
credit to purchase goods or services. But this law does not appear to be well
known or actively enforced, and the statute does not impose a specific penalty
on businesses that fail to comply. Retailers should familiarize themselves with
the laws in states where they operate before they refuse to accept cash
payments.
While the cashless world is certainly on the horizon,
many kinks still need to be ironed out. We do need to start preparing for this
new age though. The convenience of paying by mobile applications, credit cards and
ApplePay could eventually eliminate the need to carry cash. Will our grandchildren will be as excited to
fill their virtual piggy banks with virtual currency as we were to fill ours
with coins and paper?
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