Change Pays

By Doug Farmer

Look in your wallet. How much cash is there? Twelve dollars? Twenty? Maybe you went to a cash-only restaurant for lunch and wanted to make the ATM fee worthwhile, so now you carry a whopping $40.

No matter your age, odds are you prefer a payment method different from cash. Statistically speaking, your first choice is most likely a debit card. More and more, our society abandons cash for digital methods. So much so, a growing number of financial experts and even governments advocate for a cashless world.

They argue that a cashless world will be faster, more reliable and safer.

They’re wrong.

Faster? What is faster than leaving behind $5 for a $4 coffee?

More reliable? Every hack of a celebrity’s social media should be a cold warning of having every cent of one’s spending accessible online. Forget about surprising your wife with flowers. Your nosy neighbor and the government would know about those roses before you get home.

Safer? They offer a compromise: If we remove the larger bills—Franklin and Grant—drug trade would face an uphill climb; money laundering and tax evasion would come to an end. Even I know that a quick stop at most convenience stores can yield a prepaid debit card worth up to $500. Many drug dealers may prefer this business model.

A cashless world would not hurt the criminal class most. A cashless world would hurt the lower classes most. While one’s age may not show a preference for cash, one’s income does. For households making less than $25,000 annually, 55 percent prefer to pay via cash, compared to 20 percent for those in the bracket of $25,000-$50,000.

The lowest income groups choose cash for a variety of reasons:

  • Cash halts overspending. Many people, my relatives included, held on through the worst of the Great Recession by resorting to a cash-only budget. One cannot overspend when relying solely on the green in your pocket, rather than the plastic and the smartphone.
  • The pesky minimums—both in balance and in service charges—of credit and debit cards strain a household’s income. They not only pay for the plastic with each service charge, but they also pay for not having enough of the plastic with each missed minimum balance.
  • Each minimum balance and service charge reduces a family’s purchasing power. The lower that amount to begin with, the more regressive each hit is.

A cashless world would mandate digital access from every participant. Purchasing and maintaining a smartphone, or other digital means, is an unnecessary and unfair requirement to participate in our society.

Forcing the economically-challenged away from cash will only further marginalize them, while providing a digital trail of every purchase and activity will erode our civil liberties.

Doug Farmer has worked at Park Bank since 1981 and began his term on the State of Wisconsin Banking Review Board in 2003.He’s lived in La Crosse since 1971. You can reach him at

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