Legal implications of a cashless society

Abstract

The movement toward a cashless society is by no means a new phenomenon. The introduction, in the 1860's, of checks into the monetary system of the United States initiated the transformation of the American monetary system from a “cash-based” community to a cashless society. In fact, it has been estimated recently that over 90% of the total dollar volume of payments made in the United States are made by check. <sup xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">1</sup> Nevertheless, checks, which require multiple handling by banks, are inherently inefficient payment instruments. This inefficiency, combined with the seven percent annual increase in volume of checks processed in the United States, <sup xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">2</sup> threatens the fundamental operations of our payments system. While recent operational developments, such as the introduction of magnetic ink character recognition techniques, provide short-term solutions, there is some question whether the present check-processing system can be sustained in an operationally sound condition beyond the present decade.