Cash Is No Longer King

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6 Responses

  1. Margaret says:

    I agree with most of what’s stated here. However, I think cash will remain very important to the American economy for at least two reasons.

    First, people who cannot get bank accounts cannot get debit cards. It’s a “twentieth-century relic” that’s still “forced” on people who can’t get social security numbers or otherwise can’t meet a bank’s documentation or other requirements to establish an account.

    Second, consumers engage in many transactions that are cash-only. I’m thinking of both black-market activities (e.g., drug sales, off-book salaries, sex work) and perfectly legal transactions (buying a car or other merchandise from, say, a friend or relative). I think there must be a significant percentage of situations where the seller either can’t legally get a credit-card merchant account or simply has no reason to.

    I imagine that one of these days we could have a “Star Trek” system — where everyone has “credits” and there are computer access points everywhere to update the system, whether for wages, or grocery shopping, or for transactions like buying my neighbor’s Camaro. But until something like that is implemented, I don’t see cash going the way of the dodo just yet.

  2. Cash is an essential element of a citizen’s right to privacy.

    My newly redesigned $20 bill still says “This note is legal tender for all debts public and private”.

  3. mmm says:

    I think that the problem with this idea is that it necessitates that every avenue of commerce take credit cards. This would be a huge windfall, of course, for CC companies, but a huge burden on the small business.

    Also, the government has already shown it’s ability to makeover US currency with all sorts of features and sizes. I’m not sure what would be so cost prohibitive to include simple mechanisms to tactilely distinguish between denomination of bills.

    Am I missing something? Is there some truly burdensome proposal by the ACB that isn’t mentioned in the article?

  4. Sarah Waldeck says:

    A few comments in response to mmm and Logical Extremes:

    1) Most (lawful) small businesses already accept electronic payment. They have chosen to do so either because a good portion of their customer base prefers it, or because currency has costs of its own, such as a greater risk of theft. In addition, the rare business that does not accept electronic payment is likely to accept checks. In other words, these days there are few (lawful) “cash-only” businesses.

    2)The brief for the National Automatic Merchandising Association (NAMA) states that there are approximately 700 million food and beverage vending machines in the United States. If braille symbols are placed on currency, the currency acceptors will have to be adjusted, with costs ranging between $100 – $500 per machine; for a total of somewhere between $700 million and $3.5 billion. Note that the total number of vending machines in the United States is much higher than the NAMA estimates, because it is only counting machines that dispense food and beverages and not, say, train tickets.

    3) I’m not sure that the legal tender language referred to by Logical Extremes is relevant here. That language means that currency is a valid form of payment when tendered to a creditor. But there is no federal statute that requires retailers to accept cash in exchange for goods and services. As a matter of fact, last week Apple announced that it is no longer accepting cash payments for iPhones, as part of an effort to prevent unauthorized resales.

  5. Sarah, yes, unfortunately, legal tender doesn’t seem to obligate a creditor to accept it (but IANAL). There are market factors at least that hopefully will keep cash in the mix, if nothing else (people who can’t get or don’t want plastic for every purpose). But regardless of the braille issues, it would be a significant blow to privacy if cash is phased out without a completely anonymous alternative. WWSS (What would Solove say)?

  6. Thanks for sharing this post Sarah. Well, I guess it is true that Cash is somewhat no longer existing, yet it’s still important. Lots of people might probably replaced cash with credit cards, since it’s the easiest and convenient way of spending. But, there are still things or consequences that cash is still needed and still important for business transactions. Anyway, great post.