The Tech You Actually Need in a Cashless Society

Cash might be king but technology is waiting to take the throne

What to Know

  • You can survive in a cashless society with 3 things: A smartphone or a smartwatch, mobile payment apps, and two-factor authentication.
  • You're going to need lots of different payment apps installed to keep up with retailers and banks.
  • A truly cashless society is still a long way off, so just ease into it and you'll be fine.

A funny thing happened on the way to quarantine in 2020: Cash became unwelcome. Concerns over whether or not a coronavirus could live on paper bills joined admonitions to socially distance and, before anyone could really blink, shopkeepers and customers alike were shunning cash in favor of contactless payments.

Add to that a shortage of coins due to U.S. Mint and traditional cash business closures, and the recipe for cashless conspiracies took firm hold across the country. But a cashless society isn't necessarily the horror that some are saying it is.

What Does 'Cashless Society' Really Mean?

Officially, a cashless society is one in which financial transactions are handled through the transfer of digital information instead of physical money in the form of banknotes or coins. In other words, you never need to use paper bills or coins. Ever.

Despite the fact that your Facebook or Instagram friends are circulating rumors about how a cashless world is close to killing off the last vestiges of civility, the U.S. is a long way from becoming a truly cashless society. Technology is pushing forward but humans are mightily resisting paying the neighbor kid via Paypal for mowing the lawn and most parents are loathe to give children a debit card instead of a fiver for the weekly allowance.

Which is odd, really, because in 2018 cash comprised just 16% of the payment methods used in the U.S. according to research firm Statista. Plastic is actually the most-favored way to pay for Americans these days, so we've already shown we know how to play well with others sans greenbacks.

Before you fret too much over this, think about the last 5 things you purchased and consider how many of them you paid for using actual bills and coins. Yeah. Not many!

Woman contactlessly paying for purchase with smartwatch
Yagi-Studio/E+/Getty Images

The Tech to Use in a World Without Cash

A cashless approach might be tough to adopt in areas where income levels and digital divide issues can wreak havoc on even the best-laid plans to use technology for everything but retailers and banks are still betting that the majority of society will take advantage of it.

The good news is that you probably already have all you really need to survive in today's type of cashless society: a debit or credit card. From banks to payday loan outfits, debit cards are easily available for anyone who has the cash to back them up. Pay bills online, in a store, or over the phone with one and you're good to go.

Beyond plastic, there are still a few simple technologies to get used to using in the coming years as you shop for groceries or other basics.

  1. A mobile payment app. These let you transfer money quickly and easily to others who have the same app, from friends or family to genuine businesses.
  2. A smartphone. A payment app is not very useful if you can only use it from home so you'll need a phone that can display information on a screen and submit information wirelessly when you're on the go. Any kind will do.
  3. A smartwatch. This isn't a necessity, really, but it's becoming a bit of a smartphone replacement for some people. Don't believe it? Just watch those commercials where they tap a smartwatch against a contactless payment terminal at Starbucks, grab the coffee and literally run.
  4. Two-factor authentication (2FA). Annoying? Check. Clunky? Often. But along with a strong password, 2FA will help keep your funds secure so that if your phone or watch is stolen, a thief won't be able to break into your accounts and go on a spending spree.

What to Know About Payment Apps

The worst part about payment apps is that there are so many choices available and they don't play well together. Everyone can pick and choose something different, which means that you'll need to be familiar with and use most of them just to buy something off Craigslist.

There are two different kinds of payment apps to keep in mind. The first is a mobile payment service. You've probably already used Paypal for something but now there are competitors: Zelle, Venmo, Google Pay, Apple Pay, and Samsung Pay.

These apps are designed to never show merchants your credit card numbers and to encrypt every transaction.

Which payment service you use can depend on things such as the type of phone you have (Samsung Pay only works on Samsung Phones, for example) or the types of transactions you make. Paypal and Venmo, for instance, are widely used at online stores but not so much at brick-and-mortar stores.

Zelle is more frequently used with banking institutions while Google Pay is used at all kinds of retailers, including McDonald's and Whole Foods.

The second kind of payment app to know is the retail app. More and more retailers are developing their own payment apps to encourage you to tap and pay instead of pull out a physical wallet to fork over cash. Starbucks is a shining example.

That app lets you order your items outside the store, then pick up the items without ever standing in line to pay in person. It's one of the oldest retail payment apps out there; one in five Starbucks orders are now sent and paid via mobile devices.

Its success encouraged other restaurant chains to follow suit so as more join the fray, it's conceivable that you will need dozens of store-specific apps on your phone or watch to keep cash out of the equation in a few years.

Apple Pay is hot on Starbucks heels. Not only did it purchase Mobeewave, but it's also snagged about 5 million more users than Starbucks has. The rumors are that this buy is part of Apple's plan to dominate the cashless world.

How to Manage Security in a Cashless Society

The banks and financial institutions behind these mobile payment apps have spent big bucks on security. The last thing they need is a major hacking incident, so all these apps are designed to never show merchants your credit card numbers and to encrypt every transaction.

Hackers being hackers, though, they're still going to find loopholes. That's why strong passwords and adding two-factor authentication to every app you can is critical to cashless success.

We all know we need a decent password, so that part's easy. But if you haven't used 2FA yet, it's time to start. It's frustrating at first, yes. Necessary? Absolutely.

How Fast Should You Prepare?

A world completely without cash is still many years off, so it's not like you need to run out today and purchase the most expensive phone or watch on the market to manage all these apps.

But you already have a smartphone, so start playing around with different mobile payment apps to start getting used to the idea if you haven't before.

Here's your homework assignment: If you haven't already, download a food delivery app to your phone and use it to buy dinner one night. If you prefer to get your food curbside and skip the delivery fees, find a local restaurant that has a payment app and use it for contactless food pick up the next time you grab dinner out.

Cash might always be around but technology is gaining on it. Don't get left behind.