More and more businesses in Michigan are going cashless. But customers who only accept cash need not worry.
This summer, as the roller coasters rumble and the crowds line up at Michigan’s Adventure, one thing will be different: the amusement park will be cashless.
Michigan’s Adventure joins a growing trend of Michigan businesses, places, and organizations that are eliminating cash transactions. But don’t worry, the money isn’t going away.
Three major Detroit venues, Comerica Park, Little Caesars Arena and Fox Theater, recently transitioned to cashless, and the LMCU Ballpark near Grand Rapids announced plans to make the transition this summer. They say cashless is safer, more secure and faster for customers.
Laure Bollenbach, communications manager at Michigan’s Adventure, said there are benefits for the park, too.
“There is no need to pay for armored cars to transport currency between parks. Gone is the time and labor spent counting cash,” she wrote in an email. “And from a practical standpoint, it’s getting harder and harder to find parts.”
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Cash payments have been steadily declining in the United States, likely accelerated by the COVID-19 pandemic, with cash transactions dropping 26% to 19% from 2019 to 2020, according to the latest data from the Federal Reserve.
Square, a leading payment system, reported that cash transactions at U.S. businesses continued to decline 8.3% last year.
“The change in the payments landscape during the pandemic has accelerated the shift in preferences from cash to credit cards and debit cards, a trend that had shifted quite slowly in the five years to 2020,” Kelsey Coyle, Laura Kim and Shaun O’Brien of the Federal Reserve Bank of San Francisco wrote in a report last year.
Although cash is becoming less common among American consumers, critics say it shouldn’t be phased out altogether because it puts people without bank accounts at a disadvantage. And several states, including Massachusetts, New Jersey and Rhode Island, have banned businesses from going entirely cashless.
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About 5.7% of Michiganders are unbanked, according to an FDIC survey, and 15.2% are underbanked, people who have accounts but typically rely on check cashing services or loans on salary. Nationally, these rates are highest among low-income, black, Hispanic and Native American households and households headed by someone with a disability.
That’s why some cashless businesses in Michigan have turned to card kiosks instead, offering a solution for cash-only customers.
Throughout Little Caesars Arena, Michigan’s largest indoor arena, are card machines where people can exchange cash for a prepaid card at no additional cost. At Grand Valley State University, which completed a year-long transition to a cashless campus in January, similar kiosks are available for students and staff carrying cash.
“The money obviously doesn’t go away,” said Craig Wieschhorster, associate vice president for business and finance at Grand Valley.
As one of Michigan’s first universities to go completely cashless, Wieschhorster says it makes operations more efficient and lowers the risk of potential fraud.
“With cashless you have more security on every transaction in terms of being able to count dollar for dollar with those transactions,” he said.
A recent study from the University of Georgia suggests that getting rid of cash transactions, which are anonymous and difficult to track, could help reduce tax evasion. This could ultimately lead to increased government revenue and benefit ordinary Americans.
“Our paper showed that in principle money could be eliminated and tax rates on income and capital lowered so that the economy – people’s well-being – would be improved overall,” he said. said Dr. William Lastrapes, one of the researchers from the University of Georgia. and an economics professor, in a written response to MLive.
Eliminating cash would negatively affect cash-only people, mostly low-income Americans, Lastrapes said, but he suggested getting rid of big bills like $50 and $100 — commonly used in the “underground economy”.
“Probably the best way to avoid imposing high currency removal costs on low-income and older Americans would be to eliminate only large bills, at least in the short term,” he said.
According to Lastrapes, the United States is unlikely to go entirely cashless, and most Americans agree. A survey by Square found that 73% of consumers and 68% of business owners do not foresee a cashless future.
“As people are educated on new and better ways to transact, the demand for cash will likely continue to decline,” Lastrapes said.
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