An interesting economic story of the past year has been the increase in grassroots support for cash payments.Against the backdrop of the Covid-19 pandemic, and rumors that coins and banknotes may be important vectors for the virus have now been debunked, the growing public support for cash may seem surprising
inside us, New obligation for every store to accept cash Consumer groups are lobbying and lawmakers from both parties are taking action.Although many Americans use electronic payments and online shopping more, most payments are made in us Still in cash. Consumer-driven efforts to protect their ability to pay with cash are as poignant as any debate over monetary policy, not least because it’s an issue that directly affects nearly every citizen. Anyway – pun intended – these questions are two sides of the same question.
Part of the renewed interest in cash payments is due to soaring inflation.Signs of ‘hiring staff’ start appearing across the country as supply chains strain us, supply and talent shortages are generating inflationary pressures, both at home and abroad. In the financial industry, this has sparked discussions about monetary policy. In the real economy, millions of Americans are struggling to budget for their increasingly expensive weekly purchases as the public braces for higher prices. A common piece of advice that debt counselors give to families trying to get their money to go further in their day-to-day life is to budget everything in cash, as physical money is easier to visualize and psychologically harder to spend.
The politics of the right to pay cash is also driven by the fact that different parts of society use cash for different purposes. While many wealthy and well-educated people continue to use cash out of habit as a store of value or emergency insurance, these groups are more likely to use digital payments. Their support for the authorization of cash payments is often based on the right of individuals to make purchases in a completely anonymous manner.In contrast, the underbanked and unbanked us The Fed estimates about 18 percent of the adult population, however, In some social groups, as many as 40% use cash out of necessity – This is their only payment method. For these groups, if businesses are enticed by electronic payment companies to refuse cash, it will lead to further economic discrimination and exclusion.
In response, organizations such as Consumer Action and the Consumer Federation of America (Certified Financial Analyst) is drawing attention to the impact of businesses refusing to accept cash.in the joint letter us Lawmakers, Linda Sherry of Consumer Action and Certified Financial AnalystAccording to Susan Grant of the Pandemic, “The economic disruption caused by the pandemic has most directly and disproportionately affected people on low incomes; those living in inner-city and rural areas; the unemployed and underemployed; the elderly; and race and ethnicity. Minorities.It is critical that people be able to get essentials at local stores and restaurants without being turned away because they want to pay in cash“
These groups are forming an alliance with others concerned about the erosion of personal privacy resulting from mandating all electronic payments and coming forward in support of the right to use cash.These calls are getting louder As digital payment providers business models shift From collecting transaction fees to analyzing and selling consumer data.
technology can help
Swedish banknote designer Karin Mörck‑Hamilton recently commented at a seminar with the central bank that “how machines recognize banknotes is at least as important today as how humans recognize banknotes”. One might expect banknote designers to focus on the artistic value of banknotes and their function in expressing national identity and aspirations, so Mörck-Hamilton’s placing cash automation on an equal footing with public engagement is instructive. Whether paying by credit card, debit card, smartphone or cash, there will always be a price for consumers and businesses, but the tremendous growth of modern self-checkout terminals is reducing the cost of cash by improving transaction speed and accuracy, while improving security and increase sales.
Robert Morrow, point-of-sale cash verification specialist at Crane Payment Innovations – whose terminals are used in more than 100 countries – says automated “cash registers” are no longer limited to car washes and vending machines, but are now indispensable A portion goes to many of the world’s largest retailers. Modern payment terminals will usually accept banknotes of all denominations, including $100 and €200, without any human oversight. Many people also use the small denomination notes they use in other purchases to give change. These machines can recognize almost all genuine banknotes that are in poor condition and ensure counterfeit banknotes are not accepted. The increasing automation of cash acceptance could be a factor driving the growth in cash usage during the pandemic.
Nearly a decade ago, against the backdrop of an economic history dominated by high inflation, the Fed capped inflation at 2%. At that point, it seemed unlikely that we would see prolonged periods of low inflation, and the ability to make cash payments would continue to be assured. Covid‑19 has exacerbated economic challenges and inequalities, but also revealed opportunities to advance economic equality and inclusion. One such opportunity is to use the central bank of the world’s largest economy to adjust inflation to an average of 2% to give more consideration to the impact of monetary policy on the real economy. Another is the use of technology and legislation to protect the use of cash at the point of sale to prevent the exacerbation of financial challenges felt by some of the most vulnerable in society.