Direct donations in a cashless economy: few answers, many questions
Tags: Cashless Economy, Financial Inclusion, Homeless, Homelessness, Cashless Society

Cash is no longer king. That much is clear from recent reports on the rapidly growing popularity of the cashless economy. According to UK Finance, in 2017 debit card payments overtook cash payments for the first time and are predicted to grow by more than any other payment method over the next decade. But as the cashless economy grows, warnings of its effects on the most vulnerable in the society also multiply. An interim report from the Access to Cash Review warns that for some 8 million people in the UK, cash remains a necessity, and that some types of transactions continue to be made predominantly in cash, including donations to charities and giving money to homeless people. As a result, rough sleepers and other homeless people who depend on cash to acquire basic daily necessities, such as food and shelter, are among the most impacted by the rapid expansion of the cashless economy.

The good news is that this expansion also offers opportunities for innovation. In the UK and beyond, there is a growing number of startups trying to find solutions to the challenges that the cashless economy poses to the homeless.

Innovation in this area is happening along two main axes. On the one hand, organisations are testing out new ways to use modern technology to close the gap that has formed in charity donations as a result of the cashless economy growth. Contactless donation points have been installed in London, Cardiff and Bristol to facilitate cashless fundraising for homeless charities, while street newspapers such as The Big Issue in the UK and Situation Stockholm in Sweden have begun supplying their vendors with mobile payments terminals through a partnership with iZettle.

On the other hand, innovators have attempted to tackle the fall in direct donations to homeless people as a result of fewer people carrying cash and spare change. Piloted ideas include Helping Heart, a winter jacket with built-in chip that enables cash-free transactions and Greater Change, a scheme that uses QR-codes to facilitate cashless donations made directly to participating homeless individuals. Outside the UK, a Seattle-based startup Samaritan is using bluetooth technology to match homeless people in need with willing donors on the streets to facilitate cashless donations.

These innovations demonstrate the positive potential of using innovative technology solutions to facilitate cashless donations to help the homeless. For example, donations made through platforms like Greater Change and Samaritan are earmarked to be spent on specific goods and services or with specified retailers (e.g., a bed in a shelter or a grocery shop that excludes alcohol purchases). Homeless people participating in these initiatives are also offered dedicated support through partner charities who help them manage their finances and plan for a successful transition from homelessness. Because cashless donations can’t be easily lost, stolen or spent on things like alcohol or drugs, they mitigate some of the risks that cash donations pose to the homeless.

What is striking, however, is the apparent lack of engagement of homeless people in the design of these innovations. From our initial research, it was not clear how — or whether at all — homeless people were consulted about their needs and preferences with regards to these potential solutions. How do the beneficiaries of the Greater Change scheme feel about wearing QR codes and being scanned by strangers? Could a chip on the chest of a Helping Heart jacket make some people feel unsafe, stigmatised or put them at risk? The stories behind these innovations are inspiring and the initial impact is promising. But the absence of views and lived experiences of the actual people they are meant to help is felt acutely in their designs.

What would a cashless direct donation solution look like if it was designed with active engagement and input from the people it seeks to support?

For now, this question remain unanswered but urgent if we are to mitigate the negative effects of the cashless economy on the lives of the most vulnerable among us.