Cashless is the Future.
But does it discriminate?
“Going cashless.” On the surface it sounds like the future we’ve all been promised. It’s the freedom to live and shop more fluidly—with the joy of fewer physical touches, auto-replenish, curbside pickup, Instacart, and in the current moment of the COVID-19 crisis, greater safety for ourselves and our families.
So, where’s the downside?
According to a 2017 FDIC survey, approximately 8.4 million (25%) of U.S. households were considered unbanked or underbanked—a number that disproportionately affects minority and low-income households. Essentially barring these groups from the conveniences many of us have come to rely on.
Take the recent example of Amazon creating an entirely cashier-less store in New York. While to many this concept store represented the future of retail, lawmakers are in the process of passing a bill making the practice illegal saying, “a cashless business model is discriminatory by design." On the one hand, you have absolute convenience, while on the other hand you have economic exclusion.
We are living an era where social determinants have become integral to nearly every conversation—whether it’s COVID-19 and the physical health of our communities or racial inequalities and the systemic health of our nation. Which means it’s become increasingly important for businesses and brands across every industry to understand how their operations impact the people they serve.
A recent example of this divide came when the U.S. Government issued stimulus checks. To help with the delivery of payments, the government launched an online portal for people to provide their banking information for direct deposit, however, that system offered nothing to those without checking or savings accounts. A Treasury spokesperson said to TIME magazine, “Paper checks are expected to take longer than direct deposit and likely won’t be sent out all at once, but instead dispersed over a period of several weeks.” There was an estimation of 5 million paper checks issued each week, forcing those most in need to wait for their payments.
Source: NBC News
As brands and organizations take into account the behavioral changes prompted by COVID-19—coupled with the importance of leveling the playing field for all shoppers, it will take alternative and novel solutions geared toward underbanked populations to make cashlessness actually work.
Among large retailers, Walmart has innovated more ways for low-income shoppers to pay with their Walmart debit card, which gives people a way to handle their money when a bank may not pick them up as customers.
Cashless venues like the Atlanta’s Mercedes-Benz Stadium have also taken steps to ensure all attendees can equally enjoy event experiences—installing no-fee kiosks that enable fans without credit or debit cards to convert their cash into spending power, both within the stadium and beyond.
Government agencies are also exploring different ways to extend their assistance programs. SNAP benefits were previously not possible online, but in a recent move to limit coronavirus exposure, the Department of Agriculture announced a pilot program to let the 42 million shoppers who rely on SNAP to buy from online grocers like Amazon Fresh.
As more businesses and retailers pursue the promises of a cashless future, putting practices in place that don’t omit parts of the population will be critical. A more inclusive future for shopping is one that allows all people to confidently embrace their purchasing power, regardless of their socioeconomic class.