Card or cash? It's a common question asked before any transaction in the USA. People no longer need to carry dollars and cents to grab a meal or ride an Uber. According to a U.S. Bank National Association survey, only 3 in 10 Americans have green in their wallets, usually less than $20.  Statistically, in the last ten years, the ratio of people using cash has dropped. Only 10% of consumers use cash as compared to 12% who never use cash. In the survey conducted by Money magazine, 73% of American consumers use money less often than in recent years. In 2019 U.S. consumers spent $601.75 billion online, rising 14.9%, from $523.64 billion in the previous year, as reported by the U.S. Department of Commerce quarterly ecommerce figures. 

COVID-19 swiftly moved the U.S. towards going cashless

With the changing dynamics of COVID-19, the market has visibly shifted towards a cashless society. From the popular choice, going cashless became a necessity. Understandably, there was a sharp decrease in person-to-person payments, ATM usage, and cash transactions for fear of catching the virus. eCommerce’s impact in America was already on the ascendancy well before the pandemic, the pandemic just provided an accelerant to that trend.  Business wire reported a jump in cashless payments to 23.2% in April compared to 5.4% in February. People opted to shop indoors rather than going out to the malls. Black Friday's record-breaking sales showed a surge in online spending, increasing it by nearly 22%. The financial market is coming up with solutions to facilitate people in "New Normal" going cashless.

People prefer going cashless

 Many Americans believe in going cashless as a convenience. One doesn't have to carry cash around or go to ATMs. It also solves another problem of security. Money can be stolen, but online payments are secure and traceable. It's also a better option while traveling. Many find it a viable solution to keep track of terrorist funds and black markets. It would effectively lower the crime rate because of a proper digital money trail. 

The other side of the picture  

Even with many pros of a cashless society, people still think the U.S. is far from going cashless. Many think of a cashless society as a risky affair. The convenience of going comes at the price of privacy. Paper money may offer some privacy, but digital cash does not offer it at all.  Banks, credit information suppliers, government institutions, and online payment organizations grew by approximately 45% since the start of the pandemic–all of gaining profits from customer-generated data.

A real challenge for unbanked

A by product of the swift conversion from cash to cashless society, has been the overlooking of needs of the underprivileged, undocumented, the elderly, and the homeless. With a total population of just over 331 million people, almost "14.1 million adults and 6.4 million children—are unbanked", according to the FDIC's 2017 National Survey of Unbanked and Underbanked Households, making a total of 5.4%% unbanked households. A cashless society would offer no support to the millions of underbanked and unbanked U.S. residents. They would struggle to pay for necessities and services. Eventually , that would mean that they would struggle to pay for even the most essential goods and services. In that way, a cashless society would be  prejudicial. The cashless society would disproportionately hurt people of color. A 2017 Federal Deposit Insurance Corporation found that 16.9% of black households and 14% of Hispanic households were unbanked in 2017, compared to just 3% of white families.

The government also doesn't approve of going cashless

But as the cashless movement has gained in popularity, cash as a medium of exchange has not disappeared, although its use declines steadily. Many cities like Philadelphia, San Francisco, and New York have recently passed legislation prohibiting businesses from accepting "card only" and contactless payments. New Jersey passed a similar bill in 2019 on the state level.  Massachusetts law banes rejecting cash, which states that "No retail establishment offering goods and services for sale shall discriminate against a cash buyer by requiring the use of credit by a buyer to purchase such goods and services. All such retail establishments must accept legal tender when offered as payment by the buyer". Chicago, New York City, Washington State, and San Francisco are working on similar legislation.

There may be several highlights of going cashless, but 82% of Americans still carry green around. The familiarity of cash makes them hold on to it. The cashless society may not be far away, but the government and people have to agree to want to close the system's loopholes, if this goal is to be met.