Thanks to Larissa Faw of Forbes for her coverage of our little payments experiment. Faw covers Milliennial women workplace trends, with a focus on entrepreneurs, finance and innovation. We at CEME are grateful for the interest in our experiential learning module.
These experiments also found that Millennials aren’t overly concerned about their privacy when making online or mobile transactions. “When you are making the payment choice in line at the grocery store, it comes down whether cash or [cashless] is right for that moment. Now, when you are making decisions about your payment adoptions, or how many credit cards you will carry, or whether you will have a PayPal account — [these are] the time[s] when you have privacy concerns and think about identity theft,” says Mazzotta.
One of more challenging lessons from these experiments is simply determining what constitutes a cash or cashless payment. “If I download a $30-off coupon off the Internet to use at a restaurant, is that considered a cashless transaction?” asks Mazzotta. “When is something a discount and when it is a payment?” Another grey area was determining the payment category when someone adds money to debit cards, such as monthly subway passes. When that card subtracts a fee upon each individual use, does each swipe count as a cash transaction?,” asks Mazzotta.
“It’s kind of like a zero-dollar payment since once you’ve bought it, there really aren’t any further transactions other than to validate the account.” As such, subway passes were banned for the cardless group, says Mazzotta. But, he adds, “We didn’t give people a hard time about that. They were doing their best. The key principle is that the cards are using electronic networks to make payments.”
Both MasterCard and Tufts University are planning to relaunch their respective experiments. Tufts, for its part, plans to make its contest more challenging for cash competitors. “When students want to travel home for Thanksgiving, they will be hit with the issue of buying tickets. How do you buy plane tickets in cash?” asks Mazzotta.
Ravi’s inexplicable good fortune won him the $100 prize from MasterCard, and Brooke took the dinner prize for best blog entry. Congratulations from Kim, Ben, and the Center for Emerging Market Enterprises!
Thank you to all who participated, and stay tuned for future research on the cost of cash.
I started out thinking that I would have at least some instances where I would be frustrated by being restricted to cards for a week, but I think the most interesting story is that I went almost an entire seven days without even noticing that I had no cash on me. I did have to borrow money for my weekly contribution to my savings group for microfinance and cheated once to pay a parking meter for a friend, but overall I would go long stretches of time without even thinking about the game. I realized during the week that I am more reliant on cards than I thought.
I was slightly nervous going into the game because the last time I went cashless was when my wallet was stolen in Ecuador. Since I had left a credit card out of my wallet in case of an emergency, I used that while waiting weeks for my debit card. I had to purchase food at the overpriced touristy spots because no other place would accept credit cards and constantly needed to figure out ways to get cash for transportation. The experience was not only expensive but nerve racking as I didnt always know how I was going to pay for my next meal or bus fare and I became overly reliant on friends for loans. While this burdensome experience was painful, going cashless in the United States is a completely different story. Almost all of my daily transactions are accessibly by credit card, and if something requires cash, I am usually able to forgo it or use a credit card to make the purchase at another location. This did make me wonder if I’m the norm in my almost complete reliance on credit cards or if most people still rely on cash for the majority of their transactions.
This was a challenge, especially when the world is programmed to use cards. One would think that using cards would save money versus using cash but that isn’t true. I can tell you I did cheat a couple of times but it wasn’t intentional. My day 1 started with me stuck at home finishing a paper that was due at 4:00pm so obviously I didn’t get the chance to withdraw money. Stuck in a soup, I had no option but to ask my friend to cover me for the weekend. His roommate was also in the program who borrowed money from him. His very words were, “I feel like I am the biggest sponsor of this program.” I decided that I will legitimately get cash from a branch on Monday. Somehow I was able to get through Monday, eating food at home and getting free food from Fletcher. I generally don’t have even a dollar on me and that’s how true I am to my cards.
Tuesday comes and I know now I need cash since I will be travelling to Harvard. I stop by at a branch at Davis. When it’s my turn the lady asks me what was it she could help me with but first she asked me to swipe my card so that I could show up on her screen. Damn!! Now here goes where she will think I am a psycho. I very courteously responded saying that I can’t use my card and I need cash from my checking account. She said I could use the ATM but I told her that I want to use my Driver’s license to get cash from her. She was perplexed and asked why. I decided to tell her the truth, “I am involved in a class project and prohibited from using cards.” She pretended to understand me and looked at my license. Another problem, my license was EXPIRED!! So I tried to convince the lady by saying that I need only 60 bucks. She agreed but how could it end so smoothly; she said that withdrawal transactions that go through a teller cost 12 bucks!. I thought she would kill me by what I was going to say next. I told her to cancel the transaction and I went to use the ATM. And this is where I had no choice but to cheat; for a student 12 bucks is equivalent to 10 coffees that adds up to 3 papers Since this episode took so long I had no option but to take the T instead of the bus where I could use cash. Hence I cheated again by using my Charlie card since I was getting late for class. Continue reading
Living without cards for a week resulted in some interesting habits. For one, I developed a fear of being without small bills. I found that I always liked to keep a couple $1, $5 and $10 dollar bills on me. Whether I was splitting a bill with friends, tipping or making sure I always had emergency T fare, life was less complicated knowing I had small bills in my wallet to make these transactions easier. Of course, having withdrawn my cash from the ATM, most of my cash was in 20 dollar bills. Many times I found myself breaking a $20 for my $2 coffee, even when I had smaller cash on me just so that I could preserve my stash of smaller bills.
I also found myself living like my life was in denominations of twenty. If I had to pay a friend back, I found myself giving them $20 even if what I owed was less. One because I finally had cash on me and it was just easier that was. I figure it made up for all the times I couldn’t pay people back completely what I owed them due to a lack of small bills.
Many times during the week I would be sitting in the campus center dreaming about food or caffeine. Normally, I would go down to the café and indulge. However, knowing that I couldn’t use my jumbocash posed a serious barrier. Why? Because I was lazy! I couldn’t quite believe it myself, but the thought of pulling out cash and getting change back was too much of a hassle to satisfy my need for food or coffee. Oh how I longed for the days when I would just swipe my ID… it was so easy! Continue reading
I told myself I was going to blog every day, tens of hilarious stories about my trials and tribulations living in a cash-constrained world. But the truth is, all the trials and tribulations were mundane inconveniences, causing me to walk further, wait longer, and buy later. I avoided short rides on the T without access to my Charlie Card. I stood in line to pay at the register instead of using automated machines. I delayed buying books that cost twice as much in the bookstore as on Amazon. Or, as was the case on more than one occasion, I thought about how I would have to endure those costs, made a mental image of my suffering, and then pulled out my credit card. Fully believing that I was capable of going cardless, and also believing that I truly understood the costs, I lost all motivation to go through the actual motions. (Note to self: next time, take the cards out of the wallet!)
A couple failed attempts:
- Buy a book at Porter Square Books: I discovered my desired book (The Power of Habit) cost $28 in the bookstore and a mere $14 on Amazon! I support local businesses, but I am trying to maintain a student budget… I waited until Friday at 10:05 and ordered it online.
- Buy groceries with checks: An early success at TJs made me think I had this in the bag. But both Shaw’s and Market Basket rejected my personal checks because they don’t have an address on them. Credit card time, I didn’t want to put my groceries back on the shelf! Continue reading
I was cashless (swapped out of cardless because I didn’t want to waste a week of pre-paid T-pass). Everything was fine, I even installed levelup and got a bonus $5 which I used to get a loaf of bread at the best bakery in town.
In a recent panic about finding a job and leaving Boston, I started preemptively selling off my furniture on craigslist. I have probably conducted 20 craigslist transactions (re-sold most of the stuff I bought) over the past few years. Each transaction has been cash based. Because buyers and sellers are complete strangers, cash is an instant and verifiable way to complete the exchange.
Two craigslist shoppers were supposed to buy my loveseat and ottoman. I realized that I would have to break the cashless rule or loan them my laptop so they could use paypal. I didn’t like the idea of complete strangers to using my computer and didn’t think they’d want to login to a site related to their finances on someone else’s machine. I considered having my roommate take the cash and pay me on paypal, but then it looked like she wasn’t going to be home while the buyers were here. Continue reading
(Background: Your humble blogger is a self-styled guru of “Zen and the art of cashless living”. With over 10,000 hours of practice in non-cash payments (Here’s one more data point for you Malcolm Gladwell!) in the last 12 years, this blogger has been relentless in capturing and optimizing the hidden value in all payments cashless, in stretching the digital dollar, and in making it work extra hard for him.
In the interest of full disclosure, your blogger was and is a crusader of cashless living. He helped spread the gospel truth of cashless payments to parts of Asia, Middle East and North Africa for nearly a decade before going to Fletcher.) Continue reading
I have to admit: my cashless week was somewhat uneventful. When I first learned that we would be randomly selected to be on either side of this smackdown, I prayed to God to place me in the cashless group. My week was already packed enough as to have to add worrying about the amount of cash I was carrying to my to-do list. And lo and behold! God responded. I went cashless, and (almost) breezed through it.
Ready… Set… Go!!
My week started on Friday morning, as I prepped for the competition. I paid my rent (thanks for the reminder, Prof Kim Wilson!), loaded my JumboCash card, and most importantly, did laundry! I timed it so that I could do two loads of laundry before the 4:00 p.m. kick start. Unfortunately, my dryer had other plans: One cycle was not enough to dry my sheets and towels. So at exactly 4:03 p.m., I was already breaking the rules: I was forced to deposit 50 cents in my dryer. The thought of air drying my sheets crossed my mind… (I had, after all, spent the night before making fun of my cardless friends on Facebook and bragging about how easy this competition was going to be for me!). However, I ended up concluding that sleeping in cold, wet sheets was worse than losing some pride. I think. Continue reading