Pros and cons of a cashless society

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SALT LAKE CITY — This week, Denmark made some giant steps towards becoming a "cashless" society. The government there wants new laws allowing clothing stores, gas stations, restaurants and other retailers to go cash free.

This means instead of using paper money, people would be required to use credit cards or mobile devices.

Financial people have bounced around the idea of a cashless society since the 1970s, when charge cards became really popular.

Cash, of course, is still here despite direct deposit, Google Wallet, Apple Pay and several cashless innovations since. With Denmark's latest move, many again are raising the thought of life without coins or paper money. But could it really happen?

Utahn Jerem Rigby said, "I think cash is very important, and you're always going to need it at some point."

Many people like Rigby still like their coins and paper money. A recent study by the Federal Reserve Bank of San Francisco found 40 percent of all payments made by Americans in a typical month are in cash. Yet, one out of 10 no longer carry paper money on a daily basis.

"I have to say," said another Utah resident, Jennifer Evans, "most of the time I have a debit card. (It's) pretty standard for me."

And Utahn Cheryl Brisson said, "Usually, I have less than $20 on me at any time."

Once Apple Pay and some of these other things get broader adoption, it's hard to imagine cash would stick around for a lot longer.

–Gaige Redd

In many ways, Americans appear to be moving in a cashless direction. Since 2013, U.S. Social Security benefits have been mostly paid through direct deposit or prepaid debit cards. The Federal Reserve says five out of six checks clear the banking system by some electronic format. And a report from Forester Research finds mobile payments in the U.S. will grow from $52 billion last year to $142 billion by 2019.

"Once Apple Pay and some of these other things get broader adoption, it's hard to imagine cash would stick around for a lot longer," said Gaige Redd.

Bob Campbell, president of All About Coins in Sugar House, says he's seen predictions of the end of cash come and go. He thinks it will take generations, if it does happen.

"There is such a traditional usage of money. I find it to be impossible for it to go away," he said.

Campbell argues many people on lower incomes just won't make it without cash. An estimated 9 million Americans are unbanked.

"A lot of them don't have a traditional checking account," he said, "or a bank account or even a credit card, or could even qualify for a credit card or debit card."

The Federal Reserve Bank of San Francisco study found Americans making less than $25,000 a year are more likely to use cash than people with higher incomes. And besides, says Campbell, some people will always love cash for its anonymity.

"They just want to have privacy. They don't want their name on some sort of list," he said.

I suggest before we go cashless, we make our financial systems more secure. It seems every day we hear about data breaches and payment system hacks.

However, an argument for cashless is the cost of cash itself. It is very expensive. A recent Tufts University study estimates using cash costs Americans $200 billion every year just to make it and distribute it.


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Bill Gephardt


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