EDITORIAL: Caution needed in transition to cashless society

Oct. 12—One of the many things the pandemic changed was accelerating the trend toward cashless transactions.

A few years ago more than a quarter of all transactions were with cash, but now just one-in-five are and for a variety of reasons the move toward a cashless society is accelerating.

The shift may be inevitable, but the change shouldn't be made in ways that abandon marginalized communities and the "unbanked."

There are myriad reasons for moving away from cash.

The pandemic highlighted the fact that handling cash and coin money, as well as checks is a big source of transferring germs.

Businesses also know that cash comes with a variety of expenses: the employee time needed to count cash and make change, paying to move money on armored trucks and losses from theft by customers or employees.

The use of cards or other digital payment also has the benefit of giving consumers and businesses a lasting record of transactions.

Consumers are quickly learning that the move to cashless is in many cases no longer a choice. The Star Tribune reports that many venues in the Twin Cities no longer accept cash, including Valleyfair, Target Field, U.S. Bank Stadium, Xcel Energy Center and Allianz Field.

Some high schools around the state have also stopped accepting cash to attend games, moving to online ticketing systems instead.

For those who don't bring a card or other digital payment method, some sports and other venues have "reverse ATMs" on hand, which convert cash to a card. Some of those reverse ATMs charge no fee but others do.

As the country moves toward cashless transactions, populations that can't easily transition need to be considered. More than 6% of American households are unbanked, having no checking or savings account. Many of those are the poor and homeless, but also people simply prefer to use cash or money orders.

And while the move to digital payments via smartphones accelerates, many people, including some elderly, don't have phones or aren't comfortable using the technology.

One way to ensure the unbanked aren't left behind will be to ensure that reverse ATMs are readily available everywhere.

But it's not just some consumers who can be hurt by a cashless society. Many small businesses rely on relatively small transactions and they benefit by taking cash rather than cards, for which the businesses have to hand over a payment fee to the card company.

There are good reasons to move to a largely cashless society and, like it or not, that is the direction we're headed. But as we do, there needs to be a commitment toward protecting unbanked communities and small businesses.