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I only have cash — but for how much longer?

| by Richard Buckle
I only have cash — but for how much longer?

iStock.com/selensergen

Recently, I went to the Clarks shoe store at the local mall to buy new shoes. As I walked to the cash register to pay for my selection, I couldn't help noticing the sign on the counter informing me that, yes, Clarks still accepts U.S. currency, but only up to the $100 denomination — perhaps meant to remind us just how long Clarks has been in business (since 1825), as it's been some time since $500 and $1,000 notes were in circulation.

That sign was an encouraging and, for me, clearly symbolic gesture, as Clarks made it clear that even if you still rely upon cash as your preferred vehicle for the transfer of value, you are welcome in the store. 

Several years ago, while traveling the West Coast I happened to pass through a seaside town where I stopped at Safeway grocery store. When it came time to pay for my grocery items, I noticed a sign that said the store didn't accept cash. 

When I asked why, the simple answer was that management was concerned about robberies (and, I suspect, the high cost of managing a cash infrastructure). I never did find out whether this was a temporary situation, I did wonder whether it was a sign of the times — the beginning of the end of cash.

Not yet, it seems. If you missed the news recently from Amazon, the company took a major about-face with its cashless Amazon Go stores. In a report by CNBC, Amazon said that the stores, which let customers pay for items through a mobile app without waiting in checkout lines, will start accepting cash — this, amid intensifying criticism that the company was discriminating against the unbanked.

According to Steve Kessel, Amazon senior vice president of physical stores, the company was "responding to a question about how Amazon plans to address 'discrimination and elitism' at the cashierless stores, which charge purchases using an app connected to a bank or credit card."

I have been watching this exercise by Amazon of presenting a new model for shopping and am sure it will send additional shock waves through the retail industry. It's only a beginning and, in time, there will be further refinements as Amazon makes adjustments to better interact with its clientele. 

In time, and as wearables become even smarter, shopping will be a task that, at most, will see only interactions with androids and I like that.

However, discrimination and elitism in serving the unbanked within the retail industry is a real issue across the U.S. It has come to a head in Pennsylvania where, this year in Philadelphia, the city council passed a bill that prohibits brick-and-mortar retailers from refusing cash payment and can punish violators of this policy with a $2,000 fine. 

In practice, a spokesperson for the state's attorney general said in a report by The Inquirer, "If any consumer believes they've been discriminated against because they don't have a credit card, they should contact our Bureau of Consumer Protection and file a complaint under this state law."

As I was reading this update, what jumped off the page was the specific reference to Amazon and the Amazon Go stores. "For Philly, the cost may be retail giant Amazon's newest format retail store that allows customers to grab what they need and let a smartphone app take care of the payment. Amazon has warned city officials that a cashless ban could prevent it from considering Philly for its so-called Amazon Go stores." [editor's note: Amazon later reconsidered its cashless policy]

Looks like cash is putting up a fight after all, and should we be surprised? 

I put the question of the future of cash — and indeed, the ATM — to Mike Jacobsen, Diebold Nixdorf Senior Director of Corporate Communications, following my trip to Munich.

His reply: "The functionality delivered at that physical point of presence must then meet the needs of the demographics in that area being served, with ATMs playing a pivotal role in the establishment and reinforcement of a physical brand presence. 

"Our point of view would be that the self-service channel (blurred lines between ATM and kiosk) is [as] much a part of the digital strategy of a bank or deployer as their mobile banking platform would be — offering the same capabilities, authentication, authorization, and transactional support. 

"But again, sometimes it will also handle physical media (cash, checks, etc.) and so it comes down to a deployment strategy and plan; and these ATMs, kiosks and other customer-facing products can morph over time as consumer behavior and demographics change." 

For now, the sentiment at Diebold Nixdorf and the demographics of an area, country or consumer segment notwithstanding, the market for ATMs and indeed any cash dispensing device remains strong. 

"Think of cash reinforcing a nation's sovereignty," OmniPayments LLC CEO Yash told me. "We have built up a sizable presence in the western hemisphere with our OmniPayments payments solution, and if physical devices like ATMs reinforce a physical brand presence, a nation's legal tender reinforces its independence and, indeed, its financial standing on the world's stage. 

"We work with consultants and finance specialists from Colorado to Colombia to Chile and the message is the same: No matter your societal standing, cash gets the transaction done. And we have seen our business grow as a result where we are not just working with financial institutions and retailers, but with governments as well." 

How much longer will cash play an important role with consumers? Perhaps there is no better showcase for a country pursuing a cashless society than Sweden, yet there are now citizens crying out, "Not so fast!" 

This year, talk has sprung up that some groups within Swedish society still need to be accommodated. There is a downside to going "cashless, especially for the most vulnerable groups in society," according to a report earlier this year by NPR. "Many retirees, people with disabilities and newly arrived refugees struggle with digital transactions."

And even in a nation as advanced as Sweden, electronic processing systems can fail and people can misplace payment cards. As one 19-year-old student remarked, "I lost my card and I had to order a new one, so I had to take out some cash."

As the report concluded, "Sweden … is still not quite ready for a completely cashless future." 

In the U.S., it will take a lot of time to transition to a cashless society, if it happens at all. As I left the Clarks store I thought, "What if, way back when, I had inherited — and kept — a small fortune in $500 or $1,000 notes?" But I'd never spend that much on shoes! 


Topics: ATM Management, Transaction Processing, Trends / Statistics, Vault Cash / Cash Management



Richard Buckle
Richard Buckle is the founder and CEO of Pyalla Technologies LLC. He has enjoyed a long association with the IT industry as a user, vendor, and more recently, as an industry commentator. wwwView Richard Buckle's profile on LinkedIn



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