What to Know
- The pandemic has forced New Yorkers to adapt many aspects of their lives, from how and where they work, to how they travel and socialize.
- According to Square, the company that owns many of the contactless card readers found in retail stores, between March 1, 2020 and April 23, 2020, cashless transactions increased from 8% to 31%. On March 1 of that year, only 11% of beauty and personal care shops were cashless, which then rocketed to 51% on April 23.
- Whilst for some people, the convenience of paying for something from a simple tap or swipe is evident, the decreased use of cash affects some of the most vulnerable among us in the city. According to a 2019 report, around 1 in 9 New Yorkers do not have either a checking or savings account. These individuals are referred to as "unbanked." People are unbanked for a variety of reasons, but high fees, mistrust of banks and not having enough money to open an account are the most commonly stated.
The pandemic has forced New Yorkers to adapt many aspects of their lives, from how and where they work, to how they travel and socialize.
One major change though is how people spend money. Early in the pandemic, when levels of anxiety about potential avenues of infection were high, people ditched cash for fear of it being a vector of transmission. The CDC initially advised those in retail to discourage customers from using paper cash and encouraged the use of touchless payments.
Contactless deliveries and online retail surged over the course of 2020 as people were stuck indoors, unable to go outside to shop. Even when people did venture outside to pay for something in a store, they were using their cards or phones to pay.
According to Square, the company that owns many of the contactless card readers found in retail stores, between March 1, 2020 and April 23, 2020, cashless transactions increased from 8% to 31%. On March 1 of that year, only 11% of beauty and personal care shops were cashless, which then rocketed to 51% on April 23.
Whilst for some people, the convenience of paying for something from a simple tap or swipe is evident, the decreased use of cash affects some of the most vulnerable among us in the city.
According to a 2019 report, around 1 in 9 New Yorkers do not have either a checking or savings account. These individuals are referred to as "unbanked." People are unbanked for a variety of reasons, but high fees, mistrust of banks and not having enough money to open an account are the most commonly stated.
An author of that report, Signe-Mary McKernan, of the Urban Institute told News 4 New York more about the unbanked population in the city. “To be unbanked in America today means that families are unable to fully participate in our financial system.”
Not being able to access these traditional financial institutions can also mean people end up turning to alternative services.
"If you don’t have access to credit when you need it you’re going to end up turning to payday lenders where you’re going to end up paying a lot more and end up in a spiral of debt.” said McKernan.
The pandemic has also hit this population hard, given that much needed stimulus relief or tax refund checks take longer to arrive if you don’t have a direct deposit.
“They’re the ones who need the emergency payments the most and they were among the last to get them, it makes it very hard to get by” said McKernan.
The homeless community has also been hit hard by the pandemic. Although according to the Bowery Mission, they’ve seen less people stay overnight given the eviction moratorium, they told NBC New York that it could be the calm before the storm.
“Once the immediate public health emergency subsides, thousands of men, women and children will be left grappling with the pandemic's financial impact — the fear that comes with no money to pay bills and the looming possibility of eviction,” said Brian Ourien of Bowery Mission.
This issue of financial insecurity among the unbanked has been recognized though. The New York City Council passed a bill in January 2020 prohibiting businesses from refusing to accept cash, in an attempt to reduce the inequities faced by those unbanked families. However, the law only came into effect in summer of 2020, after the pandemic’s economic effects were in full swing in the city. The bill also doesn’t apply to purchases made completely online, by mail or on the phone. This meant that the pandemics acceleration towards a cashless society managed to skirt past this bill.
We reached out to a former Councilman, now Congressman Richie Torres, who co-sponsored the bill, for comment.
It remains to be seen how the fallout from the pandemic will affect cashless habits in New York City but it’s clear that the transition to more digital transactions has already made its mark.
The Link LonkMarch 27, 2021 at 05:26AM
https://www.nbcnewyork.com/news/coronavirus/very-hard-to-get-by-how-the-pandemic-has-affected-unbanked-new-yorkers/2959385/
‘Very Hard to Get By': How The Pandemic Has Affected ‘Unbanked' New Yorkers - NBC New York
https://news.google.com/search?q=hard&hl=en-US&gl=US&ceid=US:en
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