Technology provides another way to help unhoused
WASHINGTON — John Littlejohn remembers the days when lots of people had a couple of dollars to spare to buy a copy of Street Sense, the local paper that covers issues related to the homeless and employs unhoused individuals as its vendors.
Today, he’s finding fewer people are walking around with spare change. Even well-meaning individuals who want to help are likely to pat their pockets and apologize, he said.
Tonya Williams, right, a vendor who sells street Sense, a local paper that covers issues related to the homeless and employs unhoused individuals as its vendors, gets more papers to sell from Street Sense staff member Aida Peery, left, Dec. 6 in Washington.
“I would be out here for six or seven hours and wouldn’t get more than $12 to $15,” said Littlejohn, 62, who was homeless for 13 years. “People are like, ‘I don’t leave the house with cash.’”
But just as technological shifts helped create the problem, further advances are now helping charitable groups and advocates for the unhoused reach those most in danger of being left behind in a cashless society.
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A special Street Sense phone app allows people to buy a copy electronically and have the profits go straight to him. Thanks to Social Security and his income from Street Sense and other side gigs, Littlejohn now has his own apartment.
One of the larger shifts in Western society over the past two decades has been the decline of cash transactions. It started with more people using credit cards to pay for things as trivial as a cup of coffee. It accelerated as smartphone technology advanced to the point where cash-free payments became the norm for many.
This shift has been felt keenly in the realm of street-level charitable giving — from individual donations to panhandlers and street musicians to the red Salvation Army donation kettles outside grocery stores.
Sylvester Harris, a 54-year-old Washington native who panhandles near Capital One Arena, is seen Dec. 7 in Washington.
“Everybody just has cards or their phones now,” said Sylvester Harris, a 54-year-old Washington native who panhandles near Capital One Arena. “You can tell the ones who really do want to help you, but even they just don’t have cash anymore.”
The cashless world can be particularly daunting for the unhoused. While electronic payment apps such as PayPal or Venmo have become ubiquitous, many of these options require items beyond their reach — credit cards, bank accounts, identification documents or fixed mailing addresses.
Charities have struggled to adapt. The Salvation Army has created a system where donors can essentially tap their phones on the kettle and pay directly.
Michelle Wolfe, director of development for the Salvation Army in Washington, said the new system is in place in only 2% of the collection kettles in the greater Washington area, but it has already resulted in increased donations. The minimum cashless donation is $5, and donors routinely go as high as $20, Wolfe said.
At Street Sense, similar advances were necessary to keep up with changing consumer habits. Around 2013, executive director Brian Camore said he started receiving “anecdotal reports left and right” from vendors saying people wanted to buy a copy but had no cash. Each vendor purchases the copies from Street Sense for 50 cents and sells them for $2.
“We were losing sales and had to do something about it,” he said. “We recognized that the times were changing, and we had to change with them.”
Eventually he heard about an affiliate paper in Vancouver that had developed a cashless payment app and licensed the technology. Vendors can now redeem their profits at the Street Sense offices.
A vendor selling Street Sense, a local paper that covers issues related to the homeless and employs unhoused individuals as its vendors, takes a donation for a paper while wearing a sign saying she can accept donations from cashless apps like Venmo and CashApp, on Dec. 6 in Washington.
Thomas Ratliff, Street Sense’s director of vendor employment, deals directly with the paper’s approximately 100 sellers. He cited the COVID-19 pandemic as an extra factor making life difficult for his team.
For starters, it scared people away from using cash for fear that paper money exchanges would be an infection vector. But the most damaging part was the permanent reduction in the number of people working from downtown offices, cutting off Street Sense’s main customer base.
“Commuters have always been the best customers compared to tourists,” he said.
But without that steady stream of familiar commuters, Ratliff said his vendors have had to expand their territory. Instead of concentrating on the downtown business district, Street Sense vendors now often travel by Metro to places like Silver Spring, Maryland, to find commercial areas with steady foot traffic.
Ratliff now finds himself doing tech support for his vendors, helping them navigate the complexities of a modern online presence. Among the most common problems: “Changing emails, losing or forgetting passwords, losing your documents.”
Certain payment platforms like Venmo and Cash App are more unhoused-friendly because they do not require a bank account, just a phone number and email address. But even that can be daunting. Ratliff said many of his vendors often change cellphone numbers, and a steady phone number can be a key element in verifying your identity on these apps.
Others have taken the technology a step further, developing apps that aim to not only enable cashless donations to the homeless but also to steer them into support systems that can help get them off the streets. The Samaritan app takes a deeply personal approach by allowing donors to essentially help sponsor an unhoused person without using cash.
Currently operating in seven cities, including Los Angeles and Baltimore, the program distributes special cards to unhoused people containing a QR code that enables individuals to donate directly to someone’s account. The app itself contains dozens of mini-profiles of local unhoused individuals describing their situation and immediate needs. Donors can give money to fund specific needs, from groceries or a deposit on an apartment to clothing suitable for a job interview.
“It’s a lot harder to walk by someone when you know even 1% of their story,” said Jon Kumar, the Samaritan app’s founder. “It personalizes the person in need — their personality and the tangible specificity of their needs and goals.”
How cashless spending has grown since 2015
How cashless spending has grown since 2015
Digital payment trends that had been steadily developing for a decade or more kicked into high gear when the COVID-19 pandemic accelerated the widespread adoption of cashless payments.
In March 2020, consumers pulled back discretionary spending across the board. Instead of live events and travel, for instance, Americans widely opted instead to spend money on groceries, home goods and digital entertainment. The mismatch of demand and supply caused the first of several pandemic-induced shock waves through global supply chains as retailers scrambled to keep up with the surge in online shopping for everything from living room furniture to hand sanitizer.
In 2020, Americans using cashless payments sent and received more than $7 trillion in credit and debit card payments and $62 trillion through automated clearing house transfers. ACH transfers, which include electronic cash transfer services like paycheck direct deposits, Zelle, and Venmo, had the highest rate of adoption among cashless payment types over the year.
Experian examined data from the Federal Reserve’s Payments Study to see how cashless spending changed in 2020 and how spending habits evolved in the years leading up to the pandemic. The data is broken down into the number of transactions in multiple spending categories for cashless spending in-person and remotely, as well as spending on e-commerce versus spending over the phone or by mail. It does not break out data on so-called “buy now, pay later” installment plans that have risen in popularity in recent years.
In 2020, stay-at-home guidelines and social distancing recommendations kept many Americans away from stores. While the way people shopped may have changed—many headed online—the way they purchased was almost the same. Credit and debit cards accounted for 3 in 4 purchases, a rate that was relatively unchanged from the prior year.
Fewer people used paper checks in 2020, a continuation of a yearslong trend that may have been accelerated further by social-distancing efforts. Sending and receiving money through ACH services like direct deposits, Venmo, or Paypal was the only form of payment that saw significant growth among consumers, reaching nearly 1 in 5 payments made—the most popular form of cashless payment after credit cards.
In 2020, ACH also saw an increase in usage as it was used by the government to transfer economic impact payments, or stimulus payments, to American consumers after the onset of COVID-19 pandemic.
Share of cashless transactions by type in 2020
In 2020, stay-at-home guidelines and social distancing recommendations kept many Americans away from stores. While the way people shopped may have changed—many headed online—the way they purchased was almost the same. Credit and debit cards accounted for 3 in 4 purchases, a rate that was relatively unchanged from the prior year.
Fewer people used paper checks in 2020, a continuation of a yearslong trend that may have been accelerated further by social-distancing efforts. Sending and receiving money through ACH services like direct deposits, Venmo, or Paypal was the only form of payment that saw significant growth among consumers, reaching nearly 1 in 5 payments made—the most popular form of cashless payment after credit cards.
In 2020, ACH also saw an increase in usage as it was used by the government to transfer economic impact payments, or stimulus payments, to American consumers after the onset of COVID-19 pandemic.
Card use among consumers continues to climb
Even as spending on credit cards saw slower growth in 2020, Americans spent the previous five years using their debit and credit cards for more and more purchases. As card payments increased over this period, interest rates on credit cards remained relatively low compared to historic levels. For most of the 2010s, the average bank-issued credit card carried a rate of around 13%, according to the Federal Reserve. That interest rate climbed to an average of 15% in the first quarter (Q1) of 2020 and has climbed even higher since: above 18% in August 2022.
Total card payments dip slightly in 2020
Consumers swiped their debit and credit cards at fewer registers in 2020 as the pandemic kept shoppers away from brick-and-mortar stores. Overall card spending dropped by nearly $3 billion compared with 2019. However, much of that jolt to in-person spending on credit cards was offset by Americans’ use of credit cards for online and other remote purchases.
Card spending varies by how consumers pay
In 2020, consumers tended to spend more when purchasing something over the phone or through the mail—which the Federal Reserve tracks as a single category. The average in-person purchase with a credit card in 2020 was $40, enough to snag a basket of items at the grocery store. Consumers spent more than that on average when paying through an e-commerce website, recurring autopay bills or payment installments, or some other remote shopping experience not specifically tracked by the Fed.
In-person shopping in which a consumer swipes a card or hands it to a cashier is considered “contact.” Contactless purchases are also counted as in-person sales, but refer to transactions when consumers use the tap-to-pay technology on their card or smartphone.
Cash isn’t always king
Long before the pandemic caused consumers to think twice about handling cash and checks, these types of transactions were already on the decline. Paper check usage has been dropping steadily since at least 2000. Meanwhile, ATM withdrawals, which provide a clue to how often consumers are using cash, have more or less stagnated according to the Federal Reserve.
Global data suggests that cashless payments have been gaining a foothold around the world. The World Bank, which has tracked financial inclusion since 2011, found that digital payment activity has grown steadily over the past few years. Adults that sent or received digital payments in developing economies increased from 35% in 2014 to 57% in 2021. As of 2021, 2 in 3 adults globally received or sent money digitally.
More than 1 in 3 adults in those countries used digital payments for the first time because of the pandemic, according to the World Bank 2021 Global Findex. Nongovernmental organizations, including the Bill & Melinda Gates Foundation, have long said that giving people access to digital banking and cashless payment options helps them use more financial services that can build wealth and economic stability.
This story originally appeared on Experian and was produced and distributed in partnership with Stacker Studio.
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