According to a recent report by the Pew Research Center, a nonpartisan American fact tank based in Washington, D.C., Americans are becoming more comfortable without cash. That doesn’t mean they’re not paying for goods and services, it simply means that they’re doing it electronically, using everything from Google and Apple Pay on their smartwatches and wearables to Venmo in order to pay their friends for dinner. Roughly three-in-ten U.S. adults (29%) say they make no purchases using cash during a typical week, which is a fairly large segment of the population, and it’s even more interesting when compared to the number of people who went cashless four years ago. In 2015, only 24% felt comfortable getting through the week without using tangible dollar bills, suggesting an upward trend.
There are a few important takeaways from the study. First and foremost, adults with an annual household income of $75,000 or more are more than twice as likely as those earning less than $30,000 a year to say they do not make any purchases using cash in a typical week (41% vs. 18%). It makes sense then that the lower-income segment of our society makes almost all of their purchases using cash. Moreover, Blacks are more likely than whites or Hispanics to rely on cash, and it goes without saying that citizens under 50 are more comfortable paying electronically.
The reason this matters is that some cities are taking a stance against cashless establishments. In fact, just last week, on March 8, 2019, we noted in our newsletter that Philadelphia is set to become the first major U.S. city to outlaw cashless stores as part of a push to protect low-income residents. The law will go into effect on July 1, and will require most retail stores in the city to accept cash. Similar proposals have been put forward in New York City and in the New Jersey state legislature. Supporters of the law argued it serves as protection for low-income residents who are unable to access credit or debit cards, and therefore can only make purchases with cash. With that said, while we expect there to be an upward trend of people going cashless during a typical week, wide-spread adoption of the policies above could certainly hamper excessive cashless establishment growth.
Photo: A gentleman paying for coffee with an iPhone 6 with Square’s apple pay and EMV reader