Ethics on the Road to the Cashless Society

With only about a third of current U.S. transactions being conducted in cash, the cashless society is within sight. Is its feasibility and desirability only a matter of technology, or are there also ethical implications to the transition as well?

This post on a personal-finance blog backs into at least two ways the transition to a cashless society involves ethics:

(1) Shutting the unbanked out of the economy. About 7% of the U.S. population is unbanked—they lack bank accounts and, therefore, debit cards. To the extent transactions are conducted exclusively on a cashless basis (for example, riding Megabus), the unbanked cannot participate in those transactions and cannot participate in the cashless parts of the economy. (Moreover, particularly for poorer people, opening and maintaining a bank account may be far from easy. In the U.S., opening a bank account usually requires a credit check. No credit history – or worse, a bad credit history – is a substantial impediment to becoming banked. Even if one can get banked, staying banked can be difficult due to overdraft fees and late payment fees that loom close on the horizon for anyone short on disposable income.) As we move closer to a cashless society, poorer people become ever more marginal participants in the economy.

(2) Personal privacy. Sometimes, like when buying a house, having a digital or physical paper trail is a benefit. Other times, like when buying sex toys or cigarettes, it is a detriment. For some things we do in life, we don’t want others to know that we do them, and we don’t want others to be able to discover it. Moreover, many of us think we have a right to keep these aspects of our lives private. Paying with cash allows one to maintain one’s privacy—by leaving one’s identity out of the transaction. In the cashless society, there is no leaving one’s identity out of the transaction—law enforcement, hackers, and marketers may all access our transaction records, precisely because there are records, and compromise our privacy as a result.

How else might the cashless society implicate ethics?

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LINK: Could America Become Cash-Free? (by Bob Sullivan for Grow)

If you want to buy a beer at Flatstick pub in Seattle, don’t whip out a $10 bill to pay—you’ll walk away thirsty. Flatstick, a hot new mini-chain in the Pacific Northwest, doesn’t take cash. Neither does Bluestone Lane, a coffee chain with locations in New York, Philly and D.C.
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Cash sure seems to be on the ropes. The dollar value of cash transactions sank 7 percent from 2010 to 2015, according to The Nilson Report, while credit and debit card payments rose nearly 50 percent. Meanwhile, ATMs, which had their 50th birthday last year, are disappearing around the block and around the world, signaling the decline of the “cash run.”
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[T]he FDIC estimates that 7 percent of the U.S. population is still unbanked. In other words, they live an all-cash life, so would be entirely shut out in a cashless society. Some also like the anonymity that comes with paying cash. Others use cash for budgeting reasons (when you’re out of cash, you stop spending).
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[E]liminating cash offers some intriguing possibilities. Merely the elimination of large denominations, which the EU has done, makes life much harder for large-enterprise criminals, like drug dealers. It’s far more conspicuous to carry around large piles of small bills. If all financial transactions were electronic, hiding crime would become much more difficult. …

What do you think?

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