Chaun Reynolds, 41, walks near his home in Imperial Beach on Feb. 16, 2022. / Photo by Adriana Heldiz

Chaun Reynolds spent decades working as a cook in restaurants before he hurt his back and ended up on the streets. He now lives with a friend in Imperial Beach and helps foster dogs as part of his income.  

He doesn’t make much money.  

To get around, Reynolds relies on the Metropolitan Transit System. Because he doesn’t have a debit or credit card, he can’t replenish his Pronto account, the new digital fare system, by phone. He needs to find a kiosk as he’s out running errands and feed it cash. But that’s not possible on the bus.  

Instead, Reynolds heads in the direction of the nearest trolley station, which is more than 2 miles away. He ends up spending $2.50 to get there and another $2.50 to get home.  

“The only way for me to add money is to ride the bus and pay twice,” he said.  

Although Reynolds didn’t know it at the time, there were closer kiosks available to him. To expand its reach, MTS has begun partnering with some 90 retailers and is working on an agreement with two grocery store chains.

The switch to Pronto was well-intentioned. By allowing riders to store value on their MTS cards long term, it fixed an existing problem when it rolled out last year. The agency was trying to be more considerate of all the ways people pay for transit.   

But Reynolds’ experience using the new fare system also exposes a blind spot not just in public transit but in the commercial realm more generally — one that threatens to deny the poorest of the poor from accessing the goods and services others take for granted.  

It’s hard to quantify how widespread the cashless trend really is, but during the pandemic, I began noticing more businesses refusing to take cash. Right or wrong, public health professionals were concerned at the time that COVID-19 could spread on physical currency.  

Both the buyers and sellers of new forms of technology often portray it as innovative, inevitable and value-neutral, as though the creation of a more equitable social order was a simple matter of engineering. Being able to swipe a card in a coffeehouse, for instance, is undoubtedly convenient. But gains at the top don’t automatically trickle down, especially for those who exist outside the traditional banking structure.  

A 2019 survey by the Federal Deposit Insurance Corporation, an independent agency created by Congress, found that 5.6 percent of households in California don’t have a checking or savings account. Locally, that number is 4 percent — which may not sound like a lot. But there are 1.3 million households in the San Diego-Carlsbad region alone, so we’re talking upwards of 55,000 people.  

People of color are disproportionately represented in that group. In 2020, the California Senate Committee on Business, Professions and Economic Development found that Black and Latino residents were five to seven times more likely to be “unbanked” than White ones.  

The main reason for not having a bank account? People can’t meet the minimum balance requirement.  

As a musician, Ezekiel Morphis was able to survive on cash for years. He put off a bank account because he was worried about spending more than he could afford and getting hit with overdraft fees. He viewed it as a form of self-discipline.  

Then the pandemic hit. Dozens of times, he recalled, he went into a business — a hardware store, a gas station — and got turned away.  

Morphis opened an account with a credit union, in part, because he believed it would get him unemployment benefits more quickly. But even that took some effort. He needed proof of residency, two IDs and other documents.  

“It’s pretty difficult to get established if you’re climbing out of a hole,” he said.  

Several states and big cities ban cashless stores for a similar reason — it can marginalize low-income shoppers — although there are carve-outs in some places for certain types of businesses, such as parking garages. A group of California lawmakers tried to follow suit in early 2020, weeks before the pandemic hit, but the bill didn’t get far.  

It passed one Senate committee and quietly died in another.  

Assemblyman Randy Voepel, a Republican from Santee, co-authored the bill, which would have required retailers to accept up to $5,000 in cash.  

Sen. Pat Bates, a Republican who represents South Orange and North San Diego counties, helped kill the bill but in a statement said she was open to revisiting its merits should it come up again. She was concerned at the time about how the bill defined a retailer and believed it posed a risk to banks, utilities and other businesses and their employees.  

Jerry Hill, the former Democratic state Senator, told me that after he wrote and introduced the bill some gave him grief for his lack of “21st Century thinking.” He understood that retailers like going cashless because it saves time and gives off an image of catering to an elite clientele. But he was startled by the racial disparities in banking.  

Opposition to the bill came from banking and energy groups that complained generally about potential costs. The California Bankers Association argued that by allowing individuals who are not customers to exchange currency or purchase financial instruments, like traveler’s checks, would increase the risk of money laundering (which is already prevalent in the banking sector on a global scale). Southern California Gas Company also argued that going digital was more environmentally friendly, although there’s some debate on this point because of the energy required to keep the infrastructure alive.  

At the same time, the American Petroleum and Convenience Store Association was in favor of the bill. It argued that many of its customers rely solely on cash to purchase basic necessities: “Businesses should not be allowed to deny cash as a valid payment method.”  

In the end, Hill blamed the bill’s demise on lobbyists who drummed up fear, uncertainty and doubt behind the scenes. He remembered laughing at some of their talking points.  

“You could talk about laundering money, but you could also talk about the theft of information,” he said.  

Cyber security breaches can expose people’s financial information, and companies like Facebook have used purchasing information, both online and in physical stores, to sell targeted ads. Privacy and surveillance considerations are often downplayed in the cashless debate, but the digital payment system is moving into the world of biometrics, allowing a customer to literally pay with their face 

That’s not the only consideration being downplayed.  

Lorena Gonzalez, who recently left the Assembly to head the California Labor Federation, told me that she’s bothered by cashless stores because it could mean fewer jobs for cashiers. Last month, she tweeted her support for a cashless ban after buying breakfast in a wealthier part of the city that caters to travelers and workers in nearby tech and medical industries.  

The cashless business model might make sense in La Jolla but not necessarily in her neighborhood, City Heights. She also remembered seeing an online ad proclaiming that the future of grocery shopping was digital.  

“People are really fucked if they don’t have access to a card or an app,” she said.  

Credit cards, in particular, can serve an equitable purpose and in the right context help redistribute wealth, as counterintuitive as that seems. Especially during times of high inflation, people borrow to make everyday purchases. By the time the debt is paid off — assuming wages keep pace — it’s worth less.  

But paying with a card can also be extractive, as it increases the overall cost of doing business. It’s not just consumers looking nervously at the cashless trend.  

As Mikey Knab, a local restaurateur, explained to me, some of the biggest credit card processors are also some of the biggest banks. They take a cut of every purchase. And that’s likely one of the reasons why financial institutions are increasingly nudging people toward their digital services.  

Getting rid of cash mitigates the risk of getting robbed, but some servers in bars and restaurants prefer to get their tips that way. A considerable number of hospitality workers are undocumented, with estimates ranging from about 10 to 40 percent depending on the region and the job.  

“Cash and credit is wrapped up in the larger question of employment,” Knab said.  

There are alternative financial services companies offering to fill the gap for people without traditional bank accounts, but using one can bring its own problems and limitations.  

Ashley Hopkins, a stay-at-home mom in El Cajon, said she went into a warehouse supply store and tried paying with a $20 bill, but the clerk didn’t have enough change.  

“She was pushing me, ‘Do you have a debit card?’” Hopkins said. 

She made the purchase anyhow. She discovered the hard way there was a coin circulation shortage during the pandemic and paying with cash could actually increase one’s expenses. 

Her boyfriend works two security jobs to make ends meet and gets his pay deposited onto prepaid debit cards. The family has also started relying on cash apps for mobile payments. When the holidays rolled around last year, though, they tried renting a car to visit her father and stepmother in the desert. But the rental company wouldn’t accept currency that wasn’t routed directly through a bank.  

“That put a damper on our Christmas plans,” she said. “We stayed home. It sucked.”  

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