Is Cash Going Extinct?


Have you ever seen this sign in a store window
and thought… “Can they do that?” After all, it says right on the dollar bill:
“This note is legal tender for all debts, public and private.” How can a business turn someone away who’s
carrying the same currency our country has used for hundreds of years? Are we becoming… a cashless society? In an earlier episode, we talked about how
money is a global game of trust. The only reason a dollar bill has value is
because everyone has agreed to pretend that it does. And in the last half-century, this game of
make-believe has evolved to a mind-bogglingly abstract level. Now, instead of hoarding paper slips and hunks
of metal as if they’re of any use whatsoever, we walk up to a computer screen, tell it who
we are, it flashes some symbols at us, and we walk away totally confident that we’ll
be able to exchange that digital information for goods and services. Pretty weird when you think about it. Today it’s estimated that less than 10%
of the money in the world is cash, worth roughly 5 trillion in US dollars. That includes all the stacks in all the bank
vaults, all the bills in your wallet, all the coins in all the couches in the world. The other 55 trillion or so exists only in
the minds of computers. The transition isn’t actually that surprising. After all, we moved from gold to paper because
paper is lighter and easier to carry. Ones and zeroes are even lighter than paper
and can travel at the speed of light, so if the object is to make currency as easy to
move around as possible, going digital is just the logical next step in the evolution
of money. Which brings us back to the cashless store. Operators of these establishments claim that
eliminating cash boosts productivity and efficiency. Employees no longer have to make change, count
bills or roll quarters. Food handlers don’t have to touch money
teeming with bacteria and viruses. And cashless registers present no incentive
for theft or robbery. So if going digital only makes stores faster,
cleaner and safer, why are an increasing number of cities and states banning the practice? Many people believe that, as well-intentioned
as they may be, cashless stores amount to a form of discrimination. According to the FDIC, as of 2017, 6.5% of
Americans are “unbanked,” meaning they have no checking or savings account, and no
credit cards. That’s 8.4 million households. And another 24 million are “underbanked,”
which means that though they may have an account, they still rely on cash or money orders for
virtually all transactions. These people are disproportionately likely
to be poor, minorities, immigrants, or the elderly. Opponents of cashless stores claim that for
those in these groups, this sign may as well say, “You’re not welcome here.” But how can they do it, anyway? If you want to run a business, don’t you
have to accept “legal tender”? According to the Federal Reserve… no. Section 31 states
that “United States coins and currency… are legal tender for all debts, public charges,
taxes, and dues.” This has been interpreted to mean that creditors
must accept cash for any debts owed to them, but a business owner cannot be forced to accept
cash in exchange for goods and services. At least, not by the federal government. Cities and states are free to make their own
regulations, and that’s exactly what they’ve been doing. Philadelphia, San Francisco and New Jersey
have all banned cashless stores on the basis that it is discriminatory, and New York and
Rhode Island are currently considering similar legislation. Some owners are calling these regulations
“burdensome,” (which is an odd way to describe receiving money from customers);
and they propose that instead of forcing businesses to retain outdated practices, cities and states
should focus on making electronic transactions more attainable for underprivileged groups. Meanwhile, some businesses are already working
on innovations to satisfy everyone. Amazon Go, for instance, has retrofitted its
automated checkout machines to accept cash, and the Mercedes-Benz Stadium in Atlanta has
kiosks where you can exchange cash for a kind of debit card you can then use to buy your
hot dogs and beer. The fact is, people still value cash for a
variety of reasons. For one thing, it’s anonymous. You don’t have to be drug-dealer or gun-runner
to be uncomfortable with the idea of corporations and governments keeping track of every dime
you spend. And computers aren’t 100% reliable. In 2018, a hardware failure at Visa prevented
millions of cardholders across Europe from making transactions for hours. And in the aftermath of Hurricane María in
Puerto Rico, cash was the only means of payment available. Cash is also used by many people as a budgeting
tool. When Julia and I go grocery shopping, we leave
our credit cards at home and bring only as much cash as we’ve budgeted, so we know
we won’t overspend. Studies have also shown that spending physical
currency activates the pain centers in the brain in a way that using plastic doesn’t. This means that the more regularly you use
cash, the more frugal you’re likely to be. Credit card companies seem to be aware of
this fact, as they’ve been major proponents of the cashless movement, with Visa even offering
prizes of $10,000 to small businesses that pledge to stop accepting cash as a form of
payment. Though this issue has gotten a lot of public
attention, the number of cashless stores in the country is still very tiny. Far more are cash only. 30% of all American transactions are in cash,
including the majority of those under $10. There are almost 70 billion individual pieces
of physical U.S. currency in circulation, and that number is going up, not down. Though many experts think a cashless society
is inevitable, it still seems to be a long way off. Until then, we’ll keep bringing it to the
grocery store to shop for food. Just remember to wash your hands before you
make dinner. And that’s our two cents! Thanks to our patrons for keeping Two Cents financially healthy. Click the link in the description if you’d like to support us on Patreon.

92 thoughts on “Is Cash Going Extinct?

  1. My bank only gives me so many free debit card purchase per months for Free then they charge $1.20 Canadian per purchase . So you can get charged a extra $1.20 for buying a $1.50 bag of potato chips.

  2. Having a cashless society would be a problem for those who work for tips as well. How would servers, strippers, bartenders and all those in the service industry make their money?

  3. Govt and business knowing how much we spend isn't the only problem. In a cashless society they would also know exactly how much we still have left to spend. Add to that the fact that government is more and more corporate controlled practically every day, combine that with continuing advancements in RFID technology, and it isn't too hard to imagine a future scenario where WalMart and McDonalds would know exactly how much we have in our pockets (debit/credit card) when we walk in the door.

  4. One of my buddies has been doing well in the ATM business. He offered to teach me and I thought about joining him but I didn’t do it cause I don’t think people will be using cash very often in ten years.

  5. In sweden, homeless people have card readers to accept money. Almost all stores are cashless, america is so behind

  6. If there is a general power outage or if the bank has a problem with hackers or with his system, you will loose access to your money. Besides that, companies and governement will know a lot about you private life. I think this is a bad news. You become a prew for companies and marketing.

  7. I'm so glad you pointed out the good points of cash: budgeting and spending less money, less debt and so on. I've been doing the Dave Ramsey program and using cash, and it's going great! I'm definitely ANTI-cashless 🙂

  8. I know. I go to the atm only once a week, take out whatever amount I will need for the week, and try not to go back for the rest of the week.

  9. Another compromise would be to make cash less… bad. Get rid of pennies, nickels, and dimes. Get rid of paper $1 bills. And maybe replace the quarter with a 20-cent piece or a 50-cent piece. Something more useful for rounding.

  10. My 9yo was hit by a car and just received a settlement of 24k. What are the best things that I can teach him to prepare him for when he turns 18 and that money comes out of the conservatorship? Also what are the best things he could do when he receives it? (Besides college we already have that figured out.)

  11. Long Bitcoin. Short the banks. The people will be the ones to lead the world into prosperity and rid the banks of their rein over our lives

  12. So technically even if there is a cashless society then we shouldnt have to pay for good and services. On cash it says "this note is legal tender for all debts public and private". Plus cashless businesses kinda fail tbh i know because a food court in Minnesota closed in 8 months down due to it being a cashless business.

  13. If only they round the price with tax to nice numbers instead of those numbers that end with 9s and tax brings it up to an unusual value requiring constant use of lots of pennies. Wish for the $1 coin to replace the $1 bill and for the $2 bill to become far more common…

  14. Couldn't business owners and employees more easily avoid paying taxes if they get paid in cash? Isn't that another (albeit illegal) reason to only accept cash?

  15. During the cold war, a US group designated to monitoring the KGB (I forget which, sorry) were asked what the best way to secretly monitor a population with their willing consent would be. The general consensus was to remove cash and have people use some sort of cashless transaction system. That way everybody, their beliefs, habits, hobbies, addictions and just about everything else could be monitored and controlled.

    Check out "The Hated Ones" Video on the subject if you're interested.

    Stay alert, people. The world won't burn with screams of terror by cries of joy.

    And as an extra(IMO), it could be used to make everybody poorer at the near literal push of a button. My govt just sent out a piece of propaganda claiming the budget is doing great, despite the fact we have the lowest business confidence, and more money being printed than ever. So everybody, relative to the cash supply is actually poorer. Oh and unemployment is down, but paying people welfare is not counted as 'unemployed' and welfare expenditure is way up because wages aren't profitable for businesses, so people have just stopped hiring or letting people go. Pretty cool time to be alive to see the country your children will inherit turn to a socialist hell.

  16. I would gladly switch permanently to a GOOD cryptocurrency.
    GOOD CRYPTOCURRENCY is this…
    ANONYMOUS
    OPEN SOURCE
    DECENTRALIZED
    HAS A USE OTHER THAN CURRENCY.
    If it does not have ALL FOUR of the above traits, it is NOT GOOD CRYPTOCURRENCY, and can become an onerous burden just as debt based fiat currency has become.

  17. Hi Philip and Julia, I'm a huge fan of your videos for the quality and throughness put into every episode.

    Not sure if this has been suggested or in the realm of the content you want to create. Could you make an episode around whole and life insurance and maybe the pros/cons to each of them? Thanks!

  18. Jeez reading these comments, some of you need more responsibility in your life. And no, cash isn’t going anywhere until they make card transactions as free as cash transactions. Also, I know you socialist PBS’ers would love to have private banks be able to create money with a single keystroke, like they already kind of do, but that would cause an economic disaster

  19. I really wish that stores not accepting cash would be banned. But I don't see that coming. Here in Sweden the large stores takes both cash and card. But most smaller stores only takes card and Swish (a mobile payment solution). I can't get by a day without using card. But I can go for months without using cash.

  20. Slightly surprised that they failed to point out the important distinction between cash (coins and notes) and the digital money in your bank account. In that the cash is issued by the government/central bank (in the US your central bank is private but in the UK we nationalized it after WW2) but the digital money in your account is credit/debt issued by the banks.

  21. Wow, I never even knew this was a thing. Why do owners WANT to pay a 2-3% fee to credit card merchants just because the customer, thinks their right?

  22. When all transactions become electronic/cashless the banks and the govt will have you by the balls. And we all should know who is behind the banks and the govt. The one and only Lucifer. The same Lucifer that Alinsky dedicated his book “Rules for Radicals” to. The monetary system has always been the “Beast” and most are nearly fully accepting of its mark. That mark is currently the chip in your card and soon will be injected into the body of its users on a mass scale. I think you know how this story ends.

  23. As someone who very recently started dealing with retail cash on a regular basis and has been sick 4 times in the last few weeks, I think the argument about bacteria and viruses is pretty valid. I don't think cash should be removed from our economy, but maybe we could sanitize it on a regular basis.

  24. Can you do a bit on currency vs money? I have recently gotten into gold and silver stacking, and gold is still considered real money for a variety of reasons, not the least of which is that it is a metal with very specific chemical properties that prevent it from being easily created. World banks have recently been increasing their gold reserves, which is not only newsworthy but further proof that it is a true money of the world, especially if we are going to talk about the ability of using a common good that can be proven to be exactly the same no matter where you are in the world, or universe for that matter

  25. I'm an American but I've been living and working in Shanghai for the past five years. Here we use Alipay and WeChat Pay instead of cash. Basically, these are apps that display a QR code that the merchant scans in order to receive payment. If you don't have a bank account, you can keep money in the app. If you do have a bank account, you can link the app to it and they money gets withdrawn from your account. I love it – it's SO convenient!

  26. They didn't mention the millions of people who get paid in cash. If they can't spend it, it would force them to deposit it into a bank account. Many people have moral objections to the way banks and credit card companies conduct business. Forcing people to use a business or industry they find morally reprehensible is unAmerican.

  27. I think your goal should be to use credit cards responsibly rather than have the crutch of using cash to limit spending. You can easily get 2-3% back that you can't get with cash.

  28. "the same currency our country has used for hundreds of years"…….
    It's really not the same…. but they've gone to lengths to make it appear that way. #FiatCurrency #EndTheFed

  29. “…we moved from gold to paper because it is lighter and easier to carry”.

    Not sure we really “moved” from gold to paper. The paper represented gold. Back in the day, it was possible to go to a bank and exchange the paper for the gold it represented.

    The real move was from gold denominated currency to fiat. That was the change.

    It’s possible to have digital money backed by gold. Goldmoney let’s you transact in gold using a debit card.

  30. I think the benefits of a cashless society, in terms of virtually ending crime and increasing the hurdles for money laundering, far outweigh the burden it imposes on unbanked persons who probably shouldn't be eating out in any event. Obviously, we need to ensure universal access to banking and credit while we're at it. Furthermore, if you're so undisciplined as to NEED cash to rein in your spending, then living in a cashless world should be the least of your worries.

  31. I live in the metropolis of New York City and have never seen a 'No Cash Accepted' sign.

    Not yet at least.

    I will be VERY unnerved if-or when-I see such a sign.

  32. I think cash WILL die, and that the solution for people who don't want to pay out of accounts, should rely on rechargeable debit cards instead.

    Personally I don't have a credit card. Used to, but now I ONLY have debit. Why? I'm afraid of credit. No reason not to use debit though! If I wanna buy something, I'll pay for it right away.

    I don't like the idea of "pay later". If I need something urgently and I don't immediately have the money, loans are there for me. Credit? No thank you.

  33. The start of this video, at the very least, appears to argue in favor of a resource-based economy; something which The Venus Project has been arguing in favor of for quite some time already.

  34. Such odd propositions here… : taxes are cashless, official salaries are cashless, fines are cashless, businesstransactions are cashless and webshops are cashless ever since their creation…
    But open a small cashless shop and suddenly you are discriminating…

  35. Small thing but important. On your intro you said that we are using the same currency as we did in our country’s life. The fed is a different system than we started with. Look into the history.

  36. Why does that prize mean that Visa thinks that you'll spend more? It just means that cashless stores will (obviously) make more Visa swipes – which is where they get their $.

  37. but what happens when banks arbitrary close your account because of purchases, trust and safety issues, and spending money at lawful businesses that the government doesn't like
    Operation Choke point style

  38. Cashless works great even for budgeting, we need to adapt our thinking of spending less even if we have more money in our cards. Try using debit cards instead of credit you'll see the difference.

  39. Buy bitcoin people. Run your own nodes too if you can. But fuck going into a cashless society where they can see all your transactions, freeze accounts and inflate your savings to nothing.

  40. I like your idea of watching spending. But I do a monthly budget to ensure I don’t overspend and use Apple Pay at the stores. This way I have a record of every purchase and never lose money in the couch or street. 😄

  41. In Australia most people only use tap to pay. I think the US calls it contactless. Literally everywhere you go and everyone you see uses it.

    Also I think banks are basically free in Australia so that’s a difference. Just like $20 fee a year.

  42. A completely cashless economy will usher in a level of tyranny and government surveillance the likes of which we have never before seen.

  43. re: budgeting by using cash
    i'm attempting to do this with debit cards by only keeping the money i want to spend on the account of the debit card i use and keeping the rest on a separate account
    that way i can manage the amount on my debit card via internet banking

  44. 5:03, this is why i will never trust the proponents of digital/cashless payments, i'm suspicious that they know this and they just want people to be deep in debt.

  45. Im a 17 year old norwegian Scandinavian, and I don’t think that I have touched a bill in a years time. And I buy food often, normally 5times a week

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