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Wealth and Wants

Many stadiums are going cashless

The pandemic has caused many professional sports venues to stop accepting cash

Summary

The pandemic has sped up the use of contactless payments, thanks to people perceiving cash as “dirty.” Even sports venues are going cashless now.

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Not long ago, banning cash at a large public event would have been seen as a crazy idea that would deter sales. But it has quickly become the norm at many professional sports venues across America. This is one of the countless ways in which the COVID-19 pandemic has accelerated change.

While cash usage has been declining for years, 30% of in-person retail payments were made with cash in 2019, according to the Federal Reserve Bank of Atlanta. That was still a sizable share. During the pandemic, there has been an overarching perception that cash is germy. A lot of people have gravitated to contactless payment methods instead. These transactions are believed to be even more sanitary (and faster) than swiping or dipping a credit or debit card because they don’t require the cardholder to touch anything but their own card or phone.

In its most recent earnings call, Visa reported that close to 10% of its in-person U.S. transactions are now contactless. Compare that with 2018, when just 0.18% of U.S. point-of-sale transactions were made by tapping a card or phone, according to the consulting firm A.T. Kearney. And when his company reported earnings in January, Mastercard CEO Michael Miebach said, “Seventy percent of consumers, they’re going to do more digital banking, more online purchasing and more contactless.”

Truthfully, cash is probably getting a bad rap from a cleanliness standpoint. Last week, the Centers for Disease Control and Prevention updated its guidelines to state that the likelihood of contracting COVID-19 from surfaces is low. Nonetheless, the general perception is that cash is dirty, and good luck trying to pay with it at a stadium these days. According to information posted on their official websites, 26 of the 30 Major League Baseball teams have proclaimed their stadiums will be completely cash-free this season. The other four teams (the Blue Jays, Indians, Marlins and Red Sox) still accept cash, although they all recommend cashless transactions if possible.

What if you don’t have a credit or debit card?

Several venues have installed “reverse ATMs,” which allow fans who favor cash to convert greenbacks into prepaid debit cards. This technology was also in place at February’s Super Bowl LV, which was the first cashless National Football League Championship game. Speaking of the NFL, some of its teams have announced cashless plans as well, including the 49ers, Falcons and Seahawks. Staples Center in Los Angeles (which hosts big-time concerts, two National Basketball Association franchises and a National Hockey League team) has banned cash, too. It’s a similar story at New York’s Madison Square Garden (home to the NBA’s Knicks and the NHL’s Rangers, along with many top-tier concerts and other special events).

Some cities and states have laws protecting consumers’ ability to use cash. New York City, San Francisco and Philadelphia are three prominent examples, and yet they all have stadiums with cash-free policies. It appears that reverse ATMs and COVID concerns are superseding these regulations. Massachusetts also has a law mandating cash acceptance. That may explain why the Red Sox are encouraging – but not requiring – cashless transactions.

Pre-COVID, some merchants enacted cashless policies, citing benefits such as speed and a reduced risk of theft. For example, picture a busy lunch place back when we used to commute to offices and ran out for a sandwich or salad around midday. Cash bans received pushback from advocates for the unbanked population (which comprises 7.1 million U.S. households, according to the FDIC) as well as people who prefer the anonymity of cash.

COVID has changed much of this. E-commerce, contactless, peer-to-peer and other digital payments have all risen substantially, and there’s no turning back now. The rate of change has shifted in a big way. It’s not a slow, steady drip anymore. It’s a swift current that’s sweeping us all along for the ride. 

Have a question about credit cards? Email me at ted.rossman@creditcards.com and I’d be happy to help.

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