The Migration to a Cashless Society

There’s a hidden cost to going cashless.

If you use Apple Pay, credit cards, Venmo, Zelle, or CashApp, among other things, you’re participating in the rising cashless society. The ease of not carrying cash or even a wallet makes this transition even more attractive.

However, as this new cashless society emerges, people experiencing homelessness are at risk of being left behind. Simply put, there is a reliance on cash for people experiencing homelessness. Take that away and the homelessness problem might get even bigger.

A 2017 US Bank survey reports that half of Americans hold zero cash when they leave their homes. Data from a 2020 Nilson Report says that 83% of Americans have a debit card and 72% have a credit card. Lastly, according to the Federal Reserve Bank, total transactions done by card increased 7.8% annually from 2009 to 2019. As Americans lean into the convenience of a cashless society, lifting up people experiencing homelessness will get even more challenging.

Cash is Vital for People Experiencing Homelessness
Individuals experiencing homelessness rely on cash and cash subsidies to address their fundamental needs. A study conducted by the Homeless Hub showed that cash subsidies not only led to an increase in shelter utilization but also a decrease in injection drug use and incarceration rates. This suggests that rather than spending cash on “temptation items,” individuals experiencing homelessness tend to allocate it toward essentials such as food, water, hygiene products, security deposits, and other necessities.

A Cashless Society Leaves Many Behind
If our society was completely cashless, people experiencing homelessness would not be able to participate in the economy. Cash equals accessibility. With cash, people can address their basic needs immediately without having to work around the bureaucracies of financial institutions. When getting set up with a bank account or line of credit, there must be a minimal amount in one’s savings and a regular income to qualify. These qualifications exclude those experiencing homelessness.

Additionally, participating in a cashless society relies on the access to technology. Without access to technology, you lose the ability to make purchases.

Striving for Equity in a Cashless Society
While a cashless society may be inevitable, there must be solutions to include those experiencing homelessness. We need to connect people with technology, develop their technology literacy, and set them up at financial institutions, just to name a few.

Though the growth of a cashless society is changing the way we participate in our economy, one thing stays the same. Addressing homelessness is a multifaceted approach. Continuing to provide safe and stable housing, providing support in finding jobs, and offering healthcare referrals will always be paramount to ending homelessness.