The less money you have, the more money you spend to get your money. According to a study published by the Institute for Business in the Global Context at Tufts University, people who don't have a checking or savings account are four times likely to pay fees to access their money through ATM charges, check-cashing fees, and other tariffs that the authors of the study say have "the effect of a regressive tax" which "exacerbates social inequalities."
8.2% of U.S. households don't have checking or savings accounts, and are called "unbanked." 20.1% of housholds are "underbanked," while only two thirds of the country's homes have both checking and savings accounts.
The average consumer spends 28 minutes each month "traveling to the point where they access cash." This doesn't include the amount of time it takes to wait in line. That's 5.6 hours a year, and at the average wage, equals $31 billion in collectively lost income. Or just 5.6 hours a year where you aren't forced to walk to a fetid booth and have a robot ding you an average of $3.85 per transaction to take what's already yours. ATM fees generate $8 billion in revenue each year. Check cashing fees draw $200 million.
The total cost of hard currency each year in the U.S. is $200 billion.
“The truth is every payment instrument adds a disproportionate cost onto the poor,” one of the study's authors, Bhaskar Chakravorti, tells The New Yorker. “Yet cash we tend to think of as the poor man’s best friend. That is where we’re wrong.”