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Even prior to the outbreak of coronavirus, many brick-and-mortar retailers across the country, for reasons of cost and efficiency, had been moving toward cashless operations. They had been doing this to such an extent that a number of cities and states had to ban the practice to protect the vulnerable.

Cashless Society Racist

The pandemic has led to a surge of businesses either refusing to accept cash or strongly discouraging its use.

But the pandemic, and the belief that the use of cash can spread the virus, has led to a surge of businesses either refusing to accept cash or strongly discouraging its use, and this disproportionately affecting people of color. Here are the reasons why:

1. People of Color Have Less Access to Banking Services

Even the U.S. Federal Reserve admits that people of color have less access to banking services than white people. While 84% of the latter are “fully banked,” which they define as having bank accounts and not requiring financial services outside of banks such as payday loans, only 52% of African-Americans and 63% of Hispanics are fully banked. This means that these people are far more likely to be denied service at cashless retailers.

Exacerbating the problem is that there is a known disparity between the credit scores of white people and minorities of color. Some even believe that the algorithms for credit scores can discriminate against minorities. While a person can get a credit card with only a fair credit score, it is harder than if they have a good one. The fees too, can be higher.

One group that is particularly hurt by the lack of banking access is undocumented workers, who are predominately people of color. They lack government IDs, and so they have no possibility of opening a U.S. bank account or obtaining the means necessary to participate in a cashless society. Many other minorities also lack government IDs, which is why voter ID laws tend to hurt them the most.

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2. Banking Fees Are a Form of Regressive Tax

You can look at banking fees as being something akin to a regressive tax. This means an expense that is applied equally to all people, therefore affecting poor people more than it does the rich. As people of color are far more likely to be disenfranchised, banking fees affect them the most.

In fact, the high cost of banking is another reason why so few people of color are fully banked. While those not marginalized usually have sufficient funds and/or income in their bank accounts to avoid financial woes such as overdraft fees, poor people often rely solely on cash or on nontraditional financial services that might limit them full access in a cashless society.

3. Cashless Operations Provide a Means to Discriminate

Not that long ago, businesses around the country could discriminate against people of color at will. While laws such as the Civil Rights Act of 1964 now make such discrimination illegal, businesses could potentially use cashless operations to keep people of color away. It could provide them with a legitimate way to skirt the law.

We have come way too far as a nation in terms of civil rights to go back.


While businesses may have been enacting cashless policies for well-intentioned reasons, it cannot be denied that this adversely affects people of color. For this reason alone, both governments and business owners have a responsibility to do everything that they can to reverse these policies or offer a non-discriminatory alternative.

Leo Gutierrez

Guest Post