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A Cashless Society?

Published June 13, 2017 in News

By: Katie McNally & Mitchell Powers | University Communications

Waiting in line at a local coffee shop, a customer today could witness three or four different payment methods in the brief few minutes before they reach the counter. George Washington’s classic mug might peer out from a few dollars now and then, but the swipe of a credit card or a quick tap of a mobile transaction system are more common sights.

Every year, more payment methods are joining the ranks of systems like PayPal, bitcoin, Apple Pay and Google Wallet, seemingly speeding the rapid march toward the long-discussed “cashless society.” But the days when all transactions are conducted via plastic cards and digital transfers may not be as close as we think.

Lana Swartz, an assistant professor of media studies at the University of Virginia and co-editor of the book “Paid: Tales of Dongles, Checks and Other Money Stuff,” argues that cash isn’t likely to disappear from daily life in the near future. She points out that despite news to the contrary, it remains nearly as popular as ever and until there’s another payment method that can simulate the freedom and egalitarian nature of cash, it’s unlikely to be dethroned any time soon.

“You have to keep in mind that the ‘cashless society’ isn’t new. It’s something that has been envisioned since the 1860s,” Swartz said.

“In fact, at that time the U.S. didn’t even have a consolidated national currency, so depending on how you define cash, the dream of the cashless society is older than cash itself.”

Swartz’s research focuses on money as a communication technology, and she is the University’s resident expert on the history of payment infrastructure.

Although the dream of a cashless America may have begun with science fiction writers like Edward Bellamy in the 1860s, Swartz points to the 1950s as the first time that new payment platforms began to make it a more viable possibility.

Lana Swartz is an assistant professor of media studies and co-editor of the book “Paid: Tales of Dongles, Checks and Other Money Stuff.”“You have to keep in mind that the ‘cashless society’ isn’t new. It’s something that has been envisioned since the 1860s,” Swartz said.

“In fact, at that time the U.S. didn’t even have a consolidated national currency, so depending on how you define cash, the dream of the cashless society is older than cash itself.”

Swartz’s research focuses on money as a communication technology, and she is the University’s resident expert on the history of payment infrastructure.

Although the dream of a cashless America may have begun with science fiction writers like Edward Bellamy in the 1860s, Swartz points to the 1950s as the first time that new payment platforms began to make it a more viable possibility.

“During that time, Diner’s Club emerged as the first universal third-party payment system, connecting individual cardholders with big networks of stores and other merchants,” she said. “For the first time, there was a company whose business was connecting customers and merchants.”

Prior to the Diner’s Club card system, department stores and other businesses had long offered credit card-like metal charger plates, but they could only be used at the business that issued them. The Diner’s Club card was accepted at hundreds of locations across the country.

It arrived just as Americans had begun traveling the nation’s interstate highway system, offering them a new level of freedom as they traveled hours away from their local banks. At the same time, Diner’s Club also exposed the biggest barriers to a cashless society, highlighting issues of race and class that still dog the cash-free solutions of today.

Diner’s Club itself did not discriminate by race and it was often used by minorities to make advance hotel and rental car reservations in the 1950s and 1960s.

“But many African-American cardholders later described showing up ready to pay with their Diner’s Club card and being met by a prejudiced clerk who refused to honor their reservation unless they got cash,” Swartz said. “Cash is legal tender and can’t be turned away. So Diner’s Club – even despite itself – became a locus of de facto segregation.”

It opened the door to refusal in a way that was not possible with cash, foreshadowing the way that many successive payment methods would remove some barriers, only to create others.

 

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