A Blog by Jonathan Low


Apr 1, 2018

Journey Into a Cashless Future

It's going to take a while, but appears to be inevitable. JL

David Gelles reports in the New York Times:

Some nations — South Korea, Sweden — have all but done away with cash. Yet in the United States the vast majority said they would never go completely cashless. A big reason for my increasing reliance on digital payments is that if you sign up for the right card and don’t carry a balance, credit cards can be a great deal. (One) card costs $450 a year, but it quickly delivered $1,500 worth of travel credits.
I didn’t mean to do it. It just sort of happened. But what began with an empty wallet on New Year’s Day has evolved into something akin to a lifestyle change.
I’ve gone cashless.
For the first three months of the year, I have hardly touched paper money or metal coins. There are no grimy bills folded alongside my driver’s license. No quarters or pennies jangling in my pocket.
Instead, I’ve relied almost exclusively on credit cards, Apple Pay, online orders and the occasional generosity of an unsuspecting friend.
By essentially renouncing physical currency, I’ve slipped a little further into the future. Already, some technologically advanced nations — South Korea, Sweden — have all but done away with cash. Yet in the United States, I remain an outlier. In a study last year by ING, the vast majority of respondents from the United States said they would never go completely cashless.
I’m here to encourage my fellow Americans to reconsider.
My unintentional experiment began on Jan. 1 as I awoke with a rumpled tuxedo, a mild hangover and no money in my pocket.
The night before, I had imbibed at various bars, handing out the $60 or so in my wallet as tips to bartenders kind enough to work a holiday. As the first days of January passed, I never bothered to go to an A.T.M. and withdraw a wad of cash. I didn’t need to.
Here in New York City, as well as just about everywhere these days, it’s possible to pay for nearly everything with a card or a phone.
I paid for my morning coffee using the Starbucks app on my iPhone, picked up lunches with a credit card and ordered-in the occasional dinner using Seamless. One day I went to get some vegetarian tacos at Dos Toros and happily discovered that the fast casual chain was one of those restaurants that have stopped accepting cash altogether.
Grocery shopping was similarly easy, our kitchen restocked using a mix of Amazon.com, Fresh Direct and trips to my local market, where I paid with a credit card. And so it went. Before I knew it, February had arrived and my wallet was still empty.
I vividly remember the first time I heard someone describe a world without cash. It was 2012, and I was at an event in London, listening to Ajay Banga, the chief executive of Mastercard, extol the virtues of digital currencies and the problems with paper money.
Cash, he argued, enabled all sorts of bad behavior. Drug dealers, illicit arms traders, tax evaders and sex traffickers all rely on cash, he said. Make cash obsolete and those nefarious activities get much more difficult. Plus, cash is dirty, a vector for germs and disease.
It was a compelling argument, but at the time, my wallet stuffed with colorful plasticy pounds, I thought he was crazy. Old habits die hard, and humans have been using cash, in one form or another, for roughly 7,000 years.
Plus, forsaking cash can be more difficult for the bankless, many of whom have been through economic crises and are ineligible for credit cards and bank accounts. (Though it’s getting easier, thanks to the efforts of companies like PayPal.)
Yet since that trip to London, Mr. Banga’s words have been rattling around my head, and sure enough, I’ve found myself relying less and less on cash.
A big reason for my increasing reliance on digital payments is that if you sign up for the right card and don’t carry a balance, credit cards can be a great deal. Last year, I got the Chase Sapphire Reserve card, which caused a frenzy when it was released. Yes, it costs $450 a year, but it quickly delivered $1,500 worth of travel credits.
Then last month, I signed up for the Amazon Prime Rewards card, which gives me 5 percent back on all purchases on Amazon and at Whole Foods, two major cost centers for our household. These aren’t exactly life-changing windfalls, but the benefits accrue over time, something cash can’t offer.
To be sure, there have been some downsides along the way. Chief among them: Tipping isn’t easy.
As I checked out of a hotel in Charleston, S.C., I didn’t have anything to offer the valet, which made me look — and feel — cheap. The next week I got a haircut. I paid for the trim with my card, but my barber accepted tips only in cash. Again I felt miserly.
And when I got an overpriced drink with some New York Times colleagues at the steakhouse below our newsroom, I had to add my tip to the credit card bill, a decidedly less satisfying experience than leaving a few singles on the bar.
There were other instances when I missed cash, too. When panhandlers asked me for spare change, I had nothing to offer and felt a pang of guilt. One day, I was late to pick up my toddlers from day care, and the school demanded $50 in cash. Rather than consent, I fought the charge and got away with a warning, but it was a close call.
Another time, I took the kids to a carousel only to discover it was cash only. Luckily my cousin was with us and lent me $4, narrowly averting a very public temper tantrum.
My wife saved the day more than once, tipping hotel cleaners and paying the occasional babysitter and cleaning lady with cash. And some studies show that using credit cards encourages people to spend more than they otherwise would.
For the most part, however, I realized I’d be totally fine if cash went the way of the fax machine.
Recently, I got back in touch with Mr. Banga of Mastercard, wanting to compare notes. He said that while he didn’t see cash disappearing entirely anytime soon, he — no surprise — had mostly let it go.
“I use very little cash in the course of a month,” he said. “Mostly just for tipping.”
Like Mr. Banga, I’m not saying I’ll never use cash again. I will give it out to the homeless and tip hardworking service employees. But if the day comes when cash disappears altogether, you won’t hear me complaining.
In February, I set out on a trip to Southern California, my wallet still empty. I Ubered to the airport in New York, Ubered to the hotel in Los Angeles and used the usual variety of digital payments to get around, eat and shop. Cash didn’t just seem nonessential; it was practically invisible.
Then one night in Ojai, Calif., my own cashless streak came to an end. I was out for dinner with my family and some old friends, and I picked up the bill, putting it on my Sapphire Reserve card. I was planning to treat the table, but before I noticed what was happening, my friend tossed two $20 bills on top of my wallet and said thanks.
That was that. I picked up the bills, briefly enjoying their familiar crinkle, and slipped them in my wallet.
The next morning, I dropped by a coffee shop in downtown Ojai and ordered a black coffee and blueberry bran muffin. The bill was $7.38.
I paid in cash and put $1 in the tip jar.


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