Leigh Anderson is getting rid of her cash. She uses a bank-issued debit card to buy everything from groceries and gasoline to stamps at the post office. "I used to keep spare change for coffee, but the 7-Eleven just started accepting the card," says the 33-year-old education consultant. She shuns checks too, having signed up for a new computer service called ScanFone that lets her pay her credit-card, utility and 17 other bills in just 10 minutes by tapping a few numbers on the keypad of a high-tech telephone that sends instructions to the company's central computer. "I guess you don't have to see your money to have it or spend it," she says. "It's a little weird, but dollars aren't clean anyway."
Ever since 1888, when philosopher Edward Bellamy foresaw a utopian world where money would be replaced by a card based on the "credit" built up by workers with their labor, financial prognosticators have hailed the coming of the cashless society. Club Med founder Gilbert Trigano tried to create some cashless utopias of his own by asking his guests to pay for things with beads as part of their tropical vacations. But in everyday life, consumers until now have largely chosen to hold on to their coin purses, dollar bills and checkbooks, reflecting an atavistic, under-the-mattress reluctance to part with their purchasing power.
These days it looks as though more Americans than ever are willing to let go. They are traveling through coinless tollbooths, banking at branchless banks, riding in tokenless subways and paying for everything from taxi rides to mortgages with the swipe of a card or the blip of an electronic transfer. Such transactions accounted for 18% of the $55 trillion total that consumers, corporations and governments spent last year. But the number of electronic transfers has increased nearly 200% since 1986, in contrast to a 17% rise in the number of check and cash transactions. And the volume of household bills paid through automated systems such as ScanFone and Checkfree Corp. has doubled since 1991, to 800 million last year; 20% of utility bills, 16% of auto loans and 17% of mortgage installments are now paid electronically.
Retailers of all kinds are going the cashless way. Supermarkets such as Safeway and Giant, fast-food restaurants such as Wendy's and Burger King, newspaper stands in Philadelphia's CoreStates Bank Plaza and even some taxis in Manhattan are now accepting credit cards. The New York City transit authority has joined the Washington Metro and the Bay Area Rapid Transit line in installing a fare-card system, which has contributed to a 40% drop in fare beating this year and could soon be used to introduce different price levels that reward frequent riders. Some states, among them Maryland, are replacing food stamps and welfare checks with bank cards that give welfare recipients access to prearranged monthly sums. At the New York City synagogue Ohab Zedek, members can have their monthly donations electronically deducted directly from their bank accounts. "This makes giving more painless," says Sol Zalcgendler, the congregation's executive director.