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(When) Are We Really Going Cashless?

(When) Are We Really Going Cashless?

We’re officially in May, which means that the unofficial start of summer in certain parts of the world is quickly approaching…and it also means that we’re overdue for another Rantings post (maybe). And with that, Mark, I just returned from a Southeastern jaunt with the family, eating my way through Asheville, NC and Nashville, TN (with a quick stop at Dollywood). In addition to now having staggeringly/dangerously high cholesterol from the mass quantities and (primarily fried) food I consumed, I also have a surplus of cash—because my wife coerced me into withdrawing money from an airport ATM (in advance of said jaunt). What’s interesting is that I actually spent at least some cash each day of our trip, primarily for tipping hotel workers, but also for the infrequent small cash-only business.

In light of the 50th anniversary of the ATM, I wanted to utter to you “long live the ATM!” And with that, I also wanted to revisit our ongoing discussion about cold hard cash.

People ‘round these parts are always saying that I am anti-ATM! I am actually pro-ATM—for some things—and the number 1 some “thing” is getting cash. And as the saying goes, cash is almost as good as money! Every business trip starts with the same pilgrimage to the bank or airport ATM as I try to have some cash on hand for the exact situations you mention: shuttle drivers, bell hops, hotel maids and service professionals (your room is ALWAYS cleaner when you tip!). The death of cash (and the ATM) has been wildly over-exaggerated, but that’s not to say that people aren’t trying to figure out solutions to move some of the above to digital!

If you will, let’s delve into the how/what/who/when of digital.

For me, the path toward going digital is a question of acceptance…think back to credit card acceptance, you either had to have a heavy POS terminal or a heavy carbon copy “scanner” a mere 8 years ago, then onto the scene came players like Square and now you see local yard sales that accept cards, it’s been crazy. Just last year you started seeing contactless charity donations around the globe, and my favorite holiday movie this past year (Office Christmas Party) had a scene in Chicago where the bell ringing Santa accepts Square for donations…

Office Christmas Party had so much potential, yet left me disappointed much like the buffet at Dollywood. But I digress…I love cash like I love Pappy Van Winkle. Each has its pros (and very limited cons).

Cash is expensive! Think about how much money it costs governments to mint and distribute: for banks to manage, count and re-distribute into the world; for Brinks and others to go around and collect; and for “mom and pops” to try and book keep. There are obvious advantages for cash from a merchant standpoint—it’s REAL REAL time, as in as soon as that note crosses the counter, it’s in your hands; it’s not virtual, doesn’t have to “settle;” and you can literally turn around to the distributer at the back door to pay for goods (if they accept cash). From a consumer standpoint, I can understand the realness of cash and the ease of tracking (once it’s spent, it’s actually physically gone); however, modern PFM tools and digital banking applications make this an easy enough replacement (and our favorite past time, Monopoly, has already made the leap away from cash).

I was intrigued by a recent report from Ipsos and ING’s eZonomics stating that consumers may be moving closer to accepting a cashless society—with more than a third of respondents in Europe and the US saying they were ready to ditch cash for alternative payment options. I’m guessing these people either don’t tip when they stay in hotels, or they stay in tents or they stay at hotels where they “insert preferred P2P app” tips to staff. So “ooh whee, what up with that, what up with that?”

As a graduate of the Harvard  mixology department, this is at the heart of my issue with cashless; it sort of exposes folks in the services industry (in the US, these folks literally survive on the cash-based gratuity model as those credit card tips are turned into cash at night’s end).  And speaking of these folks, they either need to get serious raises or larger tips to offset the “on the books” issue you will have with moving from cash to cashless. And maybe that’s why folks have been telling me 25% is the new 20% (when it comes to tipping).

So Dollywood, huh? Any roller coasters, line dancing or steel guitars in this trip? Did you get some boots to start stompin’?

Roller coasters…yes; eating copious amounts of bad food…yes; boots, dancing and guitars…sadly (or thankfully), no.