COMMENTARY

How elotes and tamales keep a cashless society at bay

June 23, 2017 | by Will Hernandez

One of the many murals located in Pilsen that celebrate the neighborhood's Mexican vibe.

Once the summer hits in Chicago, street food cart vendors are not hard to find in the Mexican-dominated Pilsen neighborhood.

You notice them by the 18th Street Pink Line stop. They're scattered around the perimeter of Harrison Park, a staple in the neighborhood for decades.

Most vendors sell the same kinds of foods. Elotes, which is grilled Mexican street corn served with an array of condiments mixed into a creamy concoction, and tamales are the most popular items.

And if you want dessert, it's not hard to find a "paleta man" pushing a cart filled with ice cream bars and ice cream sandwiches.

But in a world that continues to go more digital and mobile, there's only one way to pay for a tasty treat from these hard working vendors: cash.

No one uses Square to accept a credit card. Not one vendor is asking you to Venmo them for a tamale. In fact, some of them still use flip phones. It's truly amazing to see in this smartphone-dominated world.

Pilsen is one example of the many anomalies when it comes to the digital discussion because as long as street vendors are in business in this kind of a neighborhood, cashless society talk is a moot point.

Yes, that's an exaggeration to some extent. But a look at these street vendors tells a story about an aspect cashless society chatter that doesn't get discussed enough: the 10 million households in the U.S. that are unbanked (and millions more worldwide).

And we can take it a bit deeper. Despite a neighborhood that houses branches from Bank of America, BMO, Byline Bank and Wintrust, cash is still king at many businesses despite credit card acceptance. It's not uncommon to see a line 10 people deep at Bank of America waiting to withdraw cash from the two ATMs in the lobby.

But back to the street vendors. Is there a way to ever persuade these folks to accept electronic payments of some sort?

M-Pesa's system comes to mind.

For those people unfamiliar with it, M-Pesa is a mobile money program that enables users to send and receive money through text messages on their mobile devices. Deposits and withdrawals are handled through a network of authorized M-Pesa agents at local stores.

A M-Pesa-like system in the U.S. could work in communities such as Pilsen, particularly for those citizens that favor old school feature phones over an iPhone or a Galaxy. You can take such as system a step further if you incorporate the direct carrier billing model as well.

If someone without a bank account wants to buy a tamale, he or she could charge the purchase to their monthly phone bill. They can later pay off that bill with cash at a wireless carrier store or check cashing establishment, both of which are plentiful in Pilsen and other less affluent neighborhoods in Chicago.

As for the seller, funds would be deposited into this M-Pesa-type account with a same-day cash-out option. The provider of such a service could use bodegas, check cashing stores and supermarkets as an agent network. The provider could charge a small fee for the service.

The margins on such a service might be thin, but a company that has established and fruitful revenue streams could provide this concept as a community service. Companies such as MasterCard and Western Union come to mind because they tend to work with such communities more than others in the payments industry.

Until the business operations of a street vendor in Pilsen are addressed to push the digital future forward, the idea of a true cashless society is a pipe dream at best.

Flickr photo. 


Topics: Direct Carrier Billing, POS, Trends / Statistics

Companies: Western Union, MasterCard



Will Hernandez
Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago. View Will Hernandez's profile on LinkedIn

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