Redefining Cash, San Francisco Style

Even when you shop locally, a percentage of your money does not stay local through such things as transaction fees and credit card payments. These costs are footed by businesses you shop at, either impacting the sometimes razor-thin profit margins, raising prices, or both.

In fact, in San Francisco, it’s not uncommon to come across a business with a sign: “Cash Only.” While, on first glance, this can be a nuisance, in practice, there are a variety of reasons why a business would choose to accept only cash.

First, and foremost, it’s cheap. Processing payments with credit cards comes with an overhead: in money, time, and infrastructure. It requires handling disputes when they come up, reporting and accounting costs with credit card processors, and ensuring equipment is kept up-to-date.

It’s estimated that in San Francisco, residents and visitors spend $25-$40 billion locally every year. Even at low transaction rates, 3–5% of that money goes to credit card processors every time you pay for a cup of coffee or pick up groceries. That’s $1–2 billion per year taken out of our local economy, coming at a cost to both consumers and businesses, particularly impactful on our smallest business.

Why Local Matters

Studies have shown that spending money at local merchants (rather than chains) can create an over 70% increase in local economic activity, including creating local jobs, increasing wages, and decreasing turnover, to name a few.

In fact, the San Francisco Retail Diversity Study demonstrates that for every $1 million spent at local booksellers, $321,000 in economic activity and $119,000 in additional wages result.

“If residents were to redirect just 10 percent of their spending from chains to local businesses, that would generate $192 million in additional economic activity in San Francisco and almost 1,300 new jobs.”

San Francisco Retail Diversity Study

It’s important to increase our investment in local businesses and keep our money local whenever possible. One approach to keep money local has been to create local currencies. There have even been a few attempts to create a local currency in San Francisco, from Bernal Bucks to Bay Bucks. (Even Emperor Norton had his own local currency.)

Creating a local currency is an interesting idea, but it can easily wind up even more burdensome than cash. If we instead take a page from the technology sector, we can create a fully modern cashless payment model for local businesses and residents, and grow it into something much bigger.

Introducing Sutro Cash

The concept is simple: a cash-less debit model that would allow for zero-transaction-fee direct payments. By partnering with our local credit unions and banks, together we can pioneer a citywide plan that saves businesses money, supports our local financial institutions, keeps prices lower, and keeps our money in San Francisco.

For the consumer, the process is seamless. We start by modernizing the San Francisco ID card as a contactless smart card, and making it simpler to acquire for any resident — with a version for everyone else.

Any business can participate by acquiring a Sutro Cash card reader, and a payment can be made with a simple tap and PIN entry.

Even simpler, with a smartphone, when you walk within range of a small business, a payment becomes as simple as just saying your name.

A push to your device allows you to verify the payment and optionally confirm with a fingerprint scan or by entering a personal PIN.

It’s that simple.

Beyond Retail

Not only can Sutro Cash and the new City ID fundamentally alter transactions locally at merchants, it has the potential to work with public services across the city. From parking to Muni to bikeshare, Sutro Cash can more seamlessly integrate how we pay and manage our services in San Francisco. As we look at additional models for affordability and social services in San Francisco, having a unified system for benefits has immense potential.

Social Cred

An intriguing opportunity emerges from a municipal payment system, which is that of credits. Certainly, shopping locally can earn credits, which can be stored directly on the card and redeemed at local merchants for discounts or promotions. It’s a great way to reward consumers even more for supporting local merchants.

But we can take it a step further, allowing people to accrue social cred for doing otherwise unpaid work on positive city change. From helping to clean up Dolores Park to spending time working with our city’s most vulnerable residents, efforts to help create positive city change can earn social cred.

With Social Cred, Sutro Cash becomes both a simple way to seamlessly pay for local goods and services without fees, as well as a more comprehensive model for how residents, merchants, nonprofits, and the City can work together to value and reward actions that have a positive impact on San Francisco.

Cash SF is a part of my Grand San Francisco mayoral campaign, writing the next chapter of the story of San Francisco through humanity, technology, and a grand vision.

Join my campaign for Mayor of San Francisco, and help shape the incredible opportunity we have ahead of us at

Passionate about humanity, equality, mobility, technology, design, art, culture, San Francisco.

Passionate about humanity, equality, mobility, technology, design, art, culture, San Francisco.