Cashless retail is defined as marketplace transactions conducted through alternative means other than using banknotes. These alternatives are usually card transactions or electronic bank transfers. Many businesses already offer these methods, but only a few restrict clients to paying solely through a cashless system.
Companies like Amazon Go and Sweetgreen have decided to make the change for a handful of reasons, starting with efficiency. Going cashless means you don’t have to allocate resources for employees to count and store banknotes. In addition, you can avoid the costs of managing cash. For example, businesses typically need to hire security services for an armored vehicle to transport cash. Safety in general is another argument in favor of cashless systems, as incidents of robbery/hold-ups to gain access to a cash register will be avoided.
Without having to deal with these drawbacks, companies can allocate more resources to selling products.

Image from USA Today
However, many people are also against the growing trend of cashless retail, arguing that it’s discriminatory against poor communities with limited access to banks. 30% of Americans still use cash in transactions, and it’s still the most common form of payment for those making an annual income of less than $25,000. Given this fact, CNN Business reports that cities and states have actually taken action to ban cashless stores. Local governments in New Jersey and Philadelphia have created legislation that prohibits retailers who do not accept cash. New York and Washington are also considering whether or not to follow suit.
Furthermore, the prevalence of cashless institutions might contribute to the loss of liberty for everyday citizens. For low-income communities, having their own cash is a form of empowerment. Pivoting towards a cashless market might limit a citizen’s economic and social freedom.

Another consideration about cashless retail is that banks can monopolize this particular system, taking advantage of retailers and customers in the process. Fortune Magazine talks about how banks and credit card companies take the biggest slice of the pie through these transitions. People need to be wary that their personal finances aren’t in the hands of their banks. The shift from traditional finance methods to cashless systems will also present growth opportunities for financial planners who are up to date with the latest innovations. A long form post by Maryville University on finance degrees details how the need for financial planners will increase by 30% by 2024. This is mainly due to projections regarding alternative forms of purchase. In fact, CNBC reveals that there will be 726 billion transactions using digital payment technologies worldwide by 2020. Cashless retail is a new yet booming phenomenon, and navigating this niche in finance requires professional guidance.
Previously on the blog, Carlos Castelán’s article ‘The Future of Retail’ reminded us that it’s important for businesses to recognize these changes and find opportunities to evolve. However, it’s also essential to determine whether a transition will help or hurt the communities they operate in. Presenting both the advantages and disadvantages of cashless retail helps a business in realizing if this is a change worth making.
Retail Feature Story prepared by Jean Bench for thenaviogroup.com