In recent years, there has been a steady push by some advocates to transition to a cashless society. Now, the Covid-19 pandemic has accelerated that trend. Some businesses are refusing to accept cash, and many people have stopped using cash due to concerns about spreading the virus. A recent poll showed about half of Americans have stopped using paper money since the pandemic started, prompting new questions about whether coronavirus is killing off cash.
Cash is far from dead, but there is no doubt that Covid-19 has given more arguments to the 'go cashless' crowd. "Right now, the government is trying to move a lot of money into a lot of hands, and the current banking and payment systems might not be up to it," says Jim Harper, visiting fellow at the American Enterprise Institute. "So maybe new architecture for money is where we're headed."
Temporarily limiting or restricting use of cash during the pandemic is one thing, but permanently doing away with actual paper money would have far-reaching consequences. "There are still some clear benefits to cash...one of them is privacy, another one is low cost," says Harper. "With cash, you can transact for free on the spot, and a record isn't made of your transaction."
That cost factor is something a lot of people don't think about when they whip out their debit card. "Credit card companies charge 2, 3, 4 percent depending on the merchant, so you're paying higher prices when you use a card that are ultimately passed along to you," says Harper.
Some states have banned businesses from going cashless during the Covid-19 pandemic, on the grounds it hurts low-income or elderly people who don't have bank accounts, or who lack regular access to the internet or a smartphone. Harper thinks those concerns are legitimate. "You have to account for the people at the bottom of the economic ladder, who don't have bank accounts, who don't have enough money to use payment cards or other things," he tells KTRH. "If there's going to be something electronic, you have to make sure everybody has the electronics to use it."