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Opinion: The flaws of a ban on cashless commerce

Photo Credit: ISTOCK/Jonathan Parry

The 21st century has been defined by extraordinary change in society — much driven by technology. Rides can be ordered on your cellphone. Loans can be signed with the click of a button. Each passing month features a new startup or product that slowly alters our lives. These changes have created immense good, and for a long time were universally praised.

Recently, that narrative has changed, with tech’s publicity pendulum swinging to nonstop negativity. Examples abound of experts indicting tech for doing harm, from data breaches and hacking to online hate speech and more. A trope that’s grown is conflating tech’s impacts on society with the underlying issues that already existed. But while scrutiny is often a good thing, blaming tech for preexisting issues in politics, culture and the economy creates a missed opportunity to truly solve our problems.

A good case study is unraveling in NYC, where lawmakers are weighing a ban on cashless commerce — an idea that would require shops, restaurants and retailers to accept cash in day-to-day business.

What drives this proposal makes sense: As companies move toward more digital payments, the unbanked and underbanked become more vulnerable. When businesses go fully paperless, there will be no options for New York’s worst off. And, unfortunately, that will affect many. The number of unbanked and underbanked folks in NYC: 360,000 households fit the first category, while 780,000 fall into the latter. But the proposed solution does nothing to address the underlying reason this is the case (nor does anything to fix it).

Even if one denies that technology helps get more people more access to banking, it’s still true that a cashless ban fails to solve the problems of those who remain without access to banking services. That’s because a ban merely provides a Band-Aid without addressing the underlying structural problems that created the current situation.

A better way forward would be to focus on the preexisting causes that generated underbanked communities in the first place, and aiming our policies toward those. These include a lack of access to banking help, generations of branch location deserts, and a litany of systemic challenges like standards of living and downward mobility.

The good news is that tech can help on each of these fronts. From online finance coaches to budgeting apps and kiosks to digitally check balances, technology can be an important tool in regulators’ tool belts. This is not to say that we shouldn’t have protections to ensure that people don’t get left behind (we should develop them and are open to a cashless ban being part of a framework).

We live in a complicated world. And while tech goes hand in hand with change, we should be able to distinguish tangential effects from root causes.

 Julie Samuels is executive director of Tech: NYC, a network of New York tech companies.


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