Even though there have been many advances in financial technology over the past decade, many Americans still prefer to pay in cash. In fact, cash was the most popular form of payment until 2019, when debit cards climbed to the top of the ranks in the San Francisco Federal Reserve’s annual survey. The money remains king, however when it comes to payments under $ 10.
But the pandemic has caused people to turn away from cash transactions for fear of coming in contact with the coronavirus on the face of the dollar bills and coins they receive. Although the virus is thought to spread primarily from person to person, due to an abundance of caution, some stores have stopped accepting money and some have been asking customers to provide an exact change, mainly due to the lack of currency in the United States.
There is little evidence that coronavirus is transmitted from dollar bills and coins. In general, the virus is thought to be transmitted mainly through person-to-person contact and not from adjacent surfaces.
If you have a debit or credit card, one of the downsides to switching to cashless transactions is a lack of privacy. Whereas if you pay for something in cash, there is almost no record of the transaction.
If you don’t have a debit or credit card, things become a bit more complicated and cost a lot more.
This applies to about 14.1 million adults and 6.4 million non-bank children, meaning they do not have a bank account, since 2017, the last time the Federal Deposit Insurance Corporation conducted a study on -America without a bank.
While 3% of white households in the United States were non-banking, about 17% of Black and 14% of Spanish households were non-banking, the FDIC found.
“The alarm bells go off in my head because the impact of going in without money is very uneven,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics, a nonpartisan think tank. “Eliminating the ability to use cash means you have to pay more fees to pay for rechargeable cards and low-income people already find it expensive to live as it is.”
“I worry about this more than the risk of the coronavirus spreading by cash,” Chorzempa told MarketWatch.
Some cities including New York, San Francisco, and Philadelphia have tried to ban cashless stores because they appear to discriminate against non-bankers.
Recoverable debit cards are one option for people who do not have bank accounts, but some charge a fee to load money on them. Many also have inactivity fees, meaning if you don’t use the card for a period of time, you get paid. Some of these cards expire altogether.
Another free cash option is to use a payment app such as Venmo, Zelle, Cash App (which is owned by Square SQ,
) or Google GOOGL,
Venmo, owned by PayPal PYPL,
he is known for his free service. Prior to the pandemic, PayPal had already made its place for stone and lime stores including Home Depot HD,
JCPenny and Barnes and Noble.
Until recently, when PayPal announced that it had entered into an agreement with CVS CVS,
to implement free QR code checkouts using Venmo in more than 8,000 stores by the end of the year, Venmo had not been accepted as a form of payment accepted by the national retailer. Darrell Esch, general manager of PayPal, previously told MarketWatch that the company plans to release more QR checkouts Venmo and PayPal at more retailers this year.
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While cash will still be accepted in CVS stores, for the time being, the announcement “reflects our continued focus on innovation and finding new ways to help maintain customer and customer safety. “Our employees,” said Jon Roberts, executive vice president and COO of CVS Health, in a statement.
However, it is currently not possible to load physical money into a Venmo account, confirmed Tom Hunter, a PayPal spokesman.
That’s a hurdle for lower-income people who are often paid in cash, said Aaron Klein, a fellow at the Brookings Institution, a left-leaning think tank that served in the Treasury Department during the Obama administration.
But it is possible to load cash on a PayPal account at Walmart WMT,
stores, as well as in the selected CVS, 7-Eleven 3382,
and RAD Rite Aid,
stores, Hunter said. PayPal account holders will be able to complete purchases from CVS by also scanning a contactless QR code.
Klein, unlike Chorzempa, is less concerned about switching to cash-free transactions in brick-and-mortar stores.
“The biggest thing going on is big growth for online shopping only which requires digital payments,” he said. “This makes life even more expensive for those who do not have easy and cheap access to electronic payments.”
Before the coronavirus, he added that there was “much of a step toward a moneyless future.”
“Instead of what you see are new forms of digital payments that replace older forms of non-cash payment.”
“A moneyless future is more hype than reality,” Klein told MarketWatch, “and more reality for the rich than the middle or working class.”