Will the Cashless Revolution Wipe Out Panhandling?

A reader named John Neumann writes:

Guys, I had a thought today as I was walking to work in the sweltering D.C. morning heat: As the U.S. has increasingly become a cashless society with the rise of debit- and credit-card use, has there been a decrease in panhandling, busking, and homelessness? Obviously, fewer people carrying cash or change means panhandlers, buskers, and the homeless will have fewer and fewer people giving them money on the street. Would busking and panhandling become extinct if we do eventually become a completely cashless society? Is that already happening?

Great questions, John!

Photo: FaceMePLS

I don’t know the answers, but I might now seek them out. If we do ever get truly cashless, presumably you could transfer money from your digital wallet to a panhandler’s digital wallet. Might it be hard for a panhandler in possession of a digital wallet to appear needy? Probably not: if they are ubiquitous, the cost of a digital wallet itself would likely be near (or even below?) zero.

John’s questions raise two other thoughts:

+ I wonder if the appeal of going cashless might wane in light of so much high-profile financial hacking going on.

+ If/as we do get more cashless, what are the other unseen ramifications? Personally, I’d be happy to do away with the stuff. It’s dirty, inefficient, and produces a lot of troublesome by-products.

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  1. Joshua says:

    As long as there is prostitution, graft, and black/grey market trade (from pirated DVDs to drugs), panhandlers need not fear a world without cash.

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  2. AaronS says:

    In the case of drug addicts who use cash to obtain drugs, the first thought is that a cashless society would do great damage to the drug business. Digital records of all transactions would make it very difficult for addicts or dealers to do business.

    From this, I think (at least) two things would arise. First, upping the ante, someone would come out with some app that would “hide” or “erase” your transactions. Just as there are apps today to erase your questionable internet surfing habits. So technology would try to end-run the game.

    But for most addicts, I imagine that that sort of complexity is beyond reach. So how do they obtain drugs? Clearly, some new sort of “currency” would have to arise. It might be some sort of barter system. It might be some underground currency. It might be gold. It might be a more complex market for stolen goods. But to cop a phrase from Jurassic Park: “Addiction will always find a way.”

    I imagine the same goes for the homeless. Most of the people aren’t homeless because they don’t want to work, etc. They are homeless because they have such mental issues, addiction issues, alcohol issues, literacy issues, and the such, that they CANNOT work. They, too, will find a way. It may be that they have to form “unions,” pooling their money to buy the appropriate technology, then tracking how much each person has “in the bank.”

    Every advance has the law of unintended consequences. For every child we save from malaria, that’s another person that needs the earth’s dwindling resources. For every new oil find, we feel a lessened need for alternative energy. Yes, we should save the child even if it means we all must do with less, but let’s not make the mistake of thinking that there is not a price to pay. A cashless society will solve a lot of problems…and create many new ones, I”m sure.

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    • caleb b says:

      Aaron, I think you have made some great points. Addicts can be very clever and quite industrious.

      The only point I question is “Most of the people aren’t homeless because they don’t want to work.” Well….we really don’t know that. Partly because the only method we really use to study the causes of being homeless are surveys. The surveys list several options as to why someone is homeless including substance abuse, mental illness, housing affordability, etc.

      My point is that there isn’t an option for “I’m just lazy and I don’t want to work.”
      Full Disclosure: I was homeless from age 12 to 14.

      Please, don’t get me wrong….addiction and mental illness are the primary causes, but being lazy isn’t really a reason someone is going to own up to.

      Here is a study on homeless causes by The US Conference of Mayors. http://usmayors.org/pressreleases/documents/hungerhomelessnessreport_121208.pdf

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    • Clancy says:

      Addicts (and Dealers) are a clever bunch. In fact, it looks like they’ve already figured it out. They’re called Bitcoins.

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  3. Joshua Northey says:

    Well I could see it diminishing the number of panhandlers/buskers, not sure it would effect the homeless much (might drive some panhandlers/buskers into homelessness).

    I don’t think the “high profile hacking” will have any effect on the employment of a electronic economy. It will mostly have to do with old people dying. When people born in say the 1980s are getting to be senior citizens then we may be able to finally stop using cash.

    Cashless would probably makes the Police and IRS’s job easier which is a good thing.

    This will drive the anti-government whackos crazy, but I would honestly think the best system would be a federally administered one where everyone’s money was held by a government agency which administered the readers/e-wallets.

    Would eliminate all kinds of crime. Would eliminate tax evasion. Could cut out non-productive sectors of the economy (parts of the financial industry).

    Of course moving to such a system will be as traumatic as the money to paper money, so it will take time.

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  4. paul haine says:

    In the future, panhandlers will probably just request that you ‘Like them on Facebook’

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  5. Mango Punch says:

    As long as there is demand for black markets there’ll be resistance to going cashless… Also Steve, given interchange fees it’s not unambiguous that non cash transfers are more efficient than cash.

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    • Enter your name says:

      Especially for small transactions. I once had to put a single photocopy on a business credit card. I suspect that Kinko’s lost money on that seven- or eight-cent sale.

      I do find that the cashless society is a theme in my replies to beggars: I usually reply “Not today” or “Sorry”, but if I’m not actually sure what’s in my wallet, then I may reply “Sorry, I don’t really carry cash any more” or “Everything’s on plastic these days”. It may or may not be true on any given day, since I do occasionally have some cash in my wallet, but if I don’t know, it gives me an “excuse” rather than a bald rejection.

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  6. Donnie says:

    I view this as one of the big positives of going cashless: an easy way to reduce the amount of time spent being hassled by panhandlers. Also, reduction in size of the wallet required to hold my items.

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  7. Paul says:

    Perhaps currency might start toward science fiction. Compare prepaid cards to say a credit chip out of star wars, different chips are loaded with different amounts. You replace paper with a piece of plastic (or some other exotic science fiction material) You wouldn’t necessarily need a digital wallet.

    I would also be happy to see paper and coin currency go away. I’m sure it would whip out current panhandling as we know but it would be replaced by something else.

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    • pawnman says:

      In the anime Cowboy Bebop, everyone had what was essentially a small credit-card reader. If you wanted to give someone money, you put your card on one side, their card on the other, and transferred the agreed-upon amount. Seems like a logical way to go to me.

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  8. Joshua says:


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