The 'no card, no checkout' cashless culture is going to hurt the homeless and elderly

In 2018, online retail conglomerate Amazon opened its first GO store to the public — the first real example of a cashless store in action, sparking off a wave of inspiration for the likes of Everlane at their NYC location, the Sam’s Club Now store in Dallas and even United and Delta, both of whom have banned cash at ticket counters at many airports.

There are plans to have more than 3,000 Amazon Go stores opened by 2021, reports Bloomberg, and though it’s unclear where the stores will be opened, they’re likely to either be opened in busy cities or food deserts, where it’s cheaper to operate unmanned stores. Throughout the world more people are choosing to pay with cashless methods and though there’s some upsides, like less theft, speedy customer service, lower costs and more convenience, the ‘cashless culture’ will have repercussions for the homeless and elderly — two groups of people who are more likely to be without a bank account and therefore, less likely to have access to a credit or debit card to pay.

Though there’s definitely some upsides to cashless stores, such as less theft, speedy customer service and more convenience and even a sense of futurism. But the widespread adoption of ‘cashless culture’ can and will have This month both Philadelphia and New Jersey announced bills banning cashless retail stores — making NJ the second state in the United States to ban them, after Massachusetts did way back in 1978. While both included exceptions for parking garages, car rental companies and some airport stores, it means stores like Amazon Go and Sweetgreen won’t be welcome.

An Amazon Go store in Seattle — paying is as simple as scanning a QR code, picking up what you want and then walking out. 📸:  Wikimedia

An Amazon Go store in Seattle — paying is as simple as scanning a QR code, picking up what you want and then walking out. 📸: Wikimedia

Cash usage is going down

According to a report from ACORN Canada, up to 3 percent of Canadians, or almost one million people, had no association with any banking institution as of 2017. Meanwhile almost five million people in the country are considered ‘underbanked’, meaning they have limited engagement with a bank.

The report explains there are four different reasons why someone might not have a bank account:

  • Perceived as too risky to offer basic products like a line of credit, credit card or overdraft protection

  • Banks have conditions like minimum balances and high NSF fees that are unattainable for customers

  • Marketing is not targeted at individuals from certain groups, known as redlining

  • There is no way to for people to access a bank, as more than 700 bank branches closed in Canada between 2001 and 2003

According to information from the Canadian Bankers Association, the number of bank branches is declining throughout most of the provinces and territories in Canada.

Province201220132014201520162017Difference
Alberta671698703698698656-15
British Columbia796817828823816774-22
Manitoba203210211207200184-19
New Brunswick154159159158152148-6
Newfoundland and Labrador108110110110107104-4
NWT/Nunavut1616161616160
Nova Scotia1911961991941921910
Ontario2,6992,7202,7222,6972,6362,529-170
Prince Edward Island2728282827270
Quebec1,0951,1121,1151,1191,1101,058-37
Saskatchewan239248250246229213-26
Yukon677777

Filtering out certain customers

When a business goes cashless, it can cause discrimination against marginalized populations, including homeless people, charity workers collecting cash donations, cab drivers, people who don’t live near a bank, the elderly and young and anybody who works in a tip-based environment.

There’s a lot more people than that, but it’s important for cashless businesses to realize that by not allowing cash payments, they’re excluding a significant portion of the population from accessing their products or services — something that will likely influence their purchasing choices in the future if they end up in a better financial situation.

Accommodating low-income people

There are some businesses, however, that are at least attempting to accommodate low-income people. Amazon allows people to load money to their account at Canada Post, Hasty Market, Mobil and more, while many stores offer gift cards as a workaround to this issue. But for citizens who are unable to access technology this doesn’t help — the elderly might not have access to a computer to purchase a plane ticket with their gift card or a homeless person might not be able to access the barcode needed to load money to their Amazon account. With more payments happening with cards or by tapping one’s phone, lawmakers are trying to make sure that customers who don’t use or are without access to these payment types aren’t left behind.

Within Toronto, there was an estimated 8,715 people experiencing homelessness on April 26, 2018 (the last time a comprehensive count was done), including those staying in city shelters, 24-hour sites and health and treatment facilities. Though not all of these people are without access to a contactless card, it’s safe to assume that a significant portion wouldn’t have the means of paying for products if the store did not accept cash.

But for now, there’s nothing Canadians need to worry about — Amazon has expressed virtually no interest in bringing its cashierless stores to Canada and all large chains still accept cash. The best thing that governments in countries that are experiencing this shift in payment methods can do is to introduce laws to ensure that cash is accepted — but if we can learn anything from the past, it’s that the consequences of technology on the vulnerable won’t be realized until they’re in front of us.

📈 Canadian Bankers Association