3 minute read

Is "Going Cashless" the Future?

7/31/2023 12:00:00 PM

The general consensus is that our society is moving away from cash and towards digital payment methods. A simple internet search for “going cashless” brings up countless articles on the topic spanning economies across the globe. Theme parks, sports venues, and even some U.S. national parks have gone cashless. In the UK, debit card payments eclipsed cash payments back in 2017. But what does this really mean? Is cash really going away? And is it realistic for higher education?

For the purposes of this article, we define cash as physical money such as paper bills and coins, and in some cases, checks or money orders. On the contrary, digital payment methods include credit/debit cards, ACH payments, wire transfers, alternative payment methods (APMs) like digital wallets and payment apps, and more.

So what does “going cashless” mean?

Going cashless is exactly as it sounds. It means a business or institution does not accept cash as a form of payment. Which may sound crazy to some of us but not to today’s students. It seems like yesterday it was just the opposite when most businesses were “cash only” and digital payments were the exception not the rule.

Regardless of what the norm was, there is a clear trend toward digital payments. In higher education, the volume of internet-based transactions continues to rise, while the volume of manual (cash/check) transactions continues to decline. Which begs the question, “Why are digital payments attractive to consumers and companies?”

The trend towards digital payments can be attributed to convenience, security, and efficiency

1. Personal convenience of digital transactions

a. You can access your paycheck faster when you opt for direct deposit

b. You don’t have to go to the ATM to get cash to use your debit card

c. You don’t have to be in person to exchange money

2. Improved security of digital transactions

a. Employers no longer have to worry about employees carrying large sums of cash to deposit

b. The risk of theft and need for armored transportation services are reduced

c. With digital payments, fraud is more difficult and therefore less common

3. More efficient business processes

a. Digital transactions result in automated updates to the general ledger which means streamlined bookkeeping and reconciliation

b. Digital refund and disbursements methods are faster and less expensive than paper checks

Is “going cashless” realistic for higher education?

While more businesses are moving in a cashless direction, it’s unrealistic to think that cash will be completely eliminated. However, it makes sense for higher education institutions to move in that direction. Reducing cash results in a multitude of benefits and it’s the experience that students expect. With that, higher education institutions need to keep a few things in mind while exploring a cashless future.

1. It’s one thing to go cashless for tuition payments and other big ticket items, but that is very different than eliminating cash from smaller ticket items across campus such as vending, parking, and laundry. Going cashless across the entire campus means enabling non-cash payments everywhere. This can be accomplished with a unified payments platform that integrates with hundreds of campus vendors.

2. Make it easy for departments and clubs to accept non-cash payments. This can be accomplished with a payments solution that enables institutions to create ecommerce stores as needed and accept digital payments online and in person.

3. There remains a need to provide an avenue for students to pay (or departments to make deposits) with cash. Some institutions have solved this by partnering with on campus banks/credit unions to allow students and staff to exchange cash for cashiers checks that can be placed in a drop box.

4. Watch for local and state regulations. In some areas, legislatures require businesses (that would include higher ed institutions) to accept cash like this New York City law that prohibits cashless businesses.

How can I reduce cash on my campus?

While eliminating cash altogether may not be right for your institution, that doesn’t mean you can’t enjoy the benefits of reducing the footprint of cash on campus. For more information about digital payment trends, the benefits of reducing cash on campus, and how to get started, explore our eBook, Using Cash Less.

Explore Using Cash Less