Will cash go away? That is the question that is top of mind for the ATM industry. Some thought leaders believe that digital payments will phase out cash completely and lead us into a fully cashless society. However, there are reasons to doubt this narrative, especially when you consider numerous legal efforts to restrict or ban cashless businesses due to concerns with the unbanked and underbanked.

At the ATMIA conference held in Las Vegas from Feb. 14 to 16, 2024, the opening keynote tackled this debate head on with panelists Cole Augustine, president and CEO of Galactic Trade Consultants LLC and Zoya Lieberman, principal consultant at Endava. Both panelists are members of Dead Bankers Society, a group of former bankers. The panelists took part in a modified Oxford-style debate where Augustine took the positive stance that cash will stay and Lieberman took the negative stance.

Augustine gave his opening statement first, noting that electronic payments are complex and require online access and huge infrastructure and numbers of employees to support it.

"Cash is unique, it is access device, a tool that allows you to access a ledger. It is its own access device and own ledger," Augustine said.

He also pointed out that while cash is commonly viewed as dirty, the current understanding is no more likely "to transit a pathogen than any other surface."

In Lieberman's opening statement, she emphasized that 41% of Americans never use cash as transactions and how in her own travels to different countries, she never felt the need to carry cash.

Augustine pointed out that despite what cashless businesses may think, the Federal Reserve has dedicated itself to protecting access to cash.

Lieberman responded by mentioning an experience with a restaurant in Los Angeles that said they could accept cash but couldn't give change.

"When people tell us as Americans you must do this, we find creative ways to get around it. We will have cashless venues whether it's legal or allowed or not. Legal requirements have marginal effect on behavior," Lieberman said.

Lieberman and Augustine disagreed about costs of processing. Augustine pointed out the high cost of processing electronic payments, while Lieberman said that cash is inefficient and difficult to process.

She pointed particularly to the costs of maintenance and replacement of cash.

They also strongly disagreed about the role of cash for unbanked communities. Augustine brought up the example of public transits, of which 80% of payments are made in cash.

"If you want to help the poor, cash is a pretty good damn option," Augustine said.

Lieberman, however, argued that one needs to make a distinction between unbanked and illegal activity and that the underbanked are often not under digitized.

"People use digital payments to support their families all over the world," Lieberman said. "Western Union orchestrated digital forms of payments to pay for people for Ukraine."

When it comes to illegal activity, Augustine said that while cash has a bad reputation, in most cases, "you are dealing with hundreds." On the other hand, with online scams, it is fairly easy for scammers to get people to hand over their entire life savings digitally.

Lieberman, however, emphasized that "cash and currency are not the same thing." She also played on the phrase, "cash is king."

"What kind of king is cash? Is it a figurehead or only for ceremonial purposes? Is that the sort of king you want?" Lieberman said.

However, Augustine spoke about a particularly apocalyptic scenario where cash would indeed be crucial, such as during a solar flare that knocked out power. During a time like that, one would certainly need currency that is backed by the federal government, and he argues it is still necessary in normal times.

"What we need is an instrument that is easily exchanged, fungible and backed by full faith of U.S. government," Augustine said.

Source: ATM Marketplace