May 14, 2019, Stephen Harkey - CIO Dive
We clearly live in an age where technology is evolving every day, right before our eyes. With talk of driverless cars and computers that can chat online and seem so life-like, technology continues to push us forward.
This technological evolution is also very present in the financial, banking and payments world, where retailers – both online and brick and mortar are beginning to allow consumers to make payments without the option to use cash.
Not everyone is on board with this technology.
In 2018, there was a bill outlawing cashless businesses in Philadelphia — brick-and-mortar shops and restaurants where customers can only pay with credit and debit cards. Mayor Jim Kenney signed it into law recently, making Philadelphia the first major city in the country to ban cash-free stores. It takes effect July 1.
This bill was introduced to help unbanked populations. Unbanked and underbanked typically pay their bills in cash. If they need to borrow money it is usually from a local money lender at an elevated interest rate, and the vast majority of this population pay sharp interest rates when they are able to secure a line of credit, especially from a retailer.
According to media sources, there are believed to be an estimated 1.7 billion adults across the globe who do not presently enjoy access to conventional financial services. This equates to 31% of the adult population who are not currently leveraging financial services, products and benefits from a traditional bank account.
This means that 31% of the world’s adult population cannot borrow money, formally save funds, or invest finances. They are simply not able to gain access to the global money system that allows for economic liberation. What’s worse, because of their limited means to financial services, their current options are very predatory in nature when they do need access to cash or funds.
Nearly 13 percent of Philadelphia's population — close to 200,000 people — are unbanked, according to federal banking data. That's more than double the regional average.