Going Cashless: Far From Seamless. Here’s Why Many Customers Prefer Cash | Sesami (2024)

We’ve all likely encountered media coverage on a “cashless society,”—where physical paper and coin currency is no longer used for financial transactions. With the growth in alternative payment methods, it’s easy to see why places going cashless has become more and more commonplace.

Certain data even supports the move. A 2018 Pew Research Center survey established that around four out of ten Americans don’t use cash for any of their weekly payments. That’s up from 29% in 2018: a significant rise in alternative payment methods, and a driving factor behind many businesses in the U.S. going cashless.

However, other data indicates that the move has major drawbacks: cashless businesses haven’t always resulted in happy customers. Of the 60% that still use cash, a significant portion still prefer having it as an option. This is particularly true for America’s unbanked and underbanked population, which currently represents 22% of the adults in the U.S. What’s more: businesses going cashless have been met with backlash by the government, too—such as the City of Los Angeles, which has floated a ban on cashless businesses as recently as 2023.

As companies strive to keep up with the times, it’s clear that cash should remain part of the equation. Below, we discuss the many reasons why—and the ways businesses today can get the most out of their cash operations.

Many companies going cashless do so for a number of forecasted benefits: increased security, convenience, and faster transaction times. What these companies may not have forecasted, however, is the loss of large customer base: unbanked consumers.

Either purposely or circ*mstantially, unbanked individuals do not have a bank account or credit card and thus cannot participate in the digital economy. As such, many have no choice but to shop elsewhere. More strikingly: many cities have classified this lack of choice as discriminatory. New York, San Francisco, and Los Angeles (to name just a few) have either outright banned cashless businesses or are in the process of banning them.

While governments work on financial inclusion programs intended for cashless individuals, and innovators look for new payment methods inclusive for everyone, retailers simply can’t ignore cash. However, accepting cash doesn’t mean accepting old-school cash handling methods. The way forward? Investing in technology that not only enables businesses to accept cash as a form of payment, but also provides enhanced security and automation to their cash-handling procedures. Two such technologies are smart safes and cash recyclers.

Smart safes and cash recyclers play a prominent role in a retailer’s automation strategy. These proven, purpose-built systems count, sort, and dispense cash. They can be used to secure a store’s physical currency, prepare accumulated cash for deposit, and provide next-gen analytics to help businesses save money.

While these cash automation technologies can help retailers reduce the time, labor, and hassle that comes with manually counting and managing cash—all while increasing security overall—they also come with a number of benefits for cash users. Unbanked consumers can pay for products and services, while those who sometimes use cash are more incentivized to spend it.

Overall, smart safes and cash recyclers are a great middle ground between the status quo and a fully digital retail environment. They provide a secure way to store cash, with the efficiency and convenience retailers expect from an automated solution.

At the same time, the usage of a smart safe or cash recycler help retailers avoid alienating customers because they provide flexible services that meet everyone’s needs, whether they prefer to pay with cash, a card, or a mobile device.

As the retail industry rapidly changes, companies are looking for new ways to stay ahead of the curve. The latest trend for retailers to remain competitive is automation—but when that automation means going cashless, it can leave some customers behind. As we’ve also shown: in certain cities, it can be illegal, too.

Is the U.S. going cashless? What about the world? In the court of public opinion, and in the eyes of the law, the answer seems to be “no.” Bad news for businesses? We don’t think so. Handling cash doesn’t have to be a hindrance. A smart safe or cash recycler can help retailers automate cash-handling operations at scale, allowing them to remain inclusive to their customer base with optimal ROI.

Since cashless commerce tends to exclude the unbanked, underbanked, those who are less tech-savvy, and those who simply like to use cash—all substantial demographics—the time to go cashless is far from here. The best solution is to leverage technology that incorporates inclusivity, convenience, and accessibility for all customers—as well as security and savings for the companies who own it.