5 Steps to Going Cashless in Today’s Society
Monday, May 9 2022
Ever tire of carrying cash? As options increase for digital payments, we’re moving closer to a society where digital money replaces cash, checks, and coins.
The number of cashless transactions was steadily increasing, but COVID-19 accelerated the trend. Before the pandemic, a quarter of transactions were cashless. Now three in 10 Americans say they make no purchases with cash in a typical week.
Going cashless is simple. It just takes a little planning.
5 Steps to Going Cashless
Going cashless certainly is convenient. But how do you do it? You just need to follow some simple steps.
Step 1: Open a Bank Account
If you’re going cashless, you need to put your money into a bank account. Bank accounts let you access your cash with a debit card and manage funds online. Other perks include paperless statements, direct deposit, and online bill pay. Look for a bank account offering no monthly fees, low or no overdraft fees, and convenient ATM locations.
Requirements differ per bank but typically include providing:
- Valid, Government-Issued Photo ID. A driver’s license or a passport will work. Non-drivers can get a State ID card at the Department of Motor Vehicles.
- Social Security Card
- Address Verification Document. Utility bill or another document with your current address information.
- Initial Deposit. If the bank has a minimum deposit requirement, you may need to provide the deposit at the time of application.
Step 2: Choose a Debit or Credit Card
Debit and credit cards are some of the most used cashless payment methods across the world. Credit cards and debit cards are small plastic cards issued by the bank with a 16-digit card number. Both offer a convenient way of going cashless and making purchases in stores or online. But debit cards allow you to draw funds you have in the bank, while credit cards provide you access to a line of credit with the agreement to pay the money back with interest.
Step 3: Use Bank and Wire Transfers for Large Sum Transactions
With a wire transfer, no physical money moves between locations. The term dates back to when banks relied on telegraph wires to communicate this kind of money transfer. People often use wire transfers to send large amounts of money, like home closing or sending funds to relatives abroad. You can transfer money through a bank or a nonbank provider such as Western Union.
Step 4: Download an eWallet App
eWallets, sometimes called digital or virtual wallets, are an electronic version of a payment card authorized to conduct transactions on your behalf from your mobile phone. They require an authorization PIN for payment. In 2020, mobile wallet use surpassed both credit and debit card use. eWallets are a fast, secure, and convenient way of going cashless. You can use eWallets to send, receive, and store money. You no longer need to carry cash or credit cards. You simply tap your Android Pay, Apple Pay, or Samsung Pay to complete a transaction.
Step 5: Prepaid Cards
Prepaid cards are a type of debit card preloaded with funds to use for transactions. You load the card with a cash balance and use it instead of paper cash. There are two types of prepaid cards, open and closed loop. With an open-loop card, you load cash onto your card, either at an ATM or through direct deposit, and use it wherever they accept credit and debit cards. When you deplete the balance, you can reload it with additional money. You can use a closed-loop card at one place of business. Examples would be Starbucks or Amazon cards, which you can only redeem at those businesses.
Let Focus Federal Help You Go Cashless
Cashless transactions are convenient and more efficient than cash. As long as you have your card or phone, you have instant access to all your cash holdings. Thinking about going cashless? Focus Federal Credit Union can help get you started.