Ignore the Scary TikTok Videos: Cash Is Not Going Away

Scary news may make people click on a video, but it also makes them less financially savvy.

You know what sells? Fear and blood. One of the first terms I learned early in my news career was, "If it bleeds, it leads." In other words, we'd drop all the happy "dog saves boy from well" stories if there was a particularly gruesome incident to cover.

Nothing has really changed since those early days of the printing press (just kidding; I actually started shortly after the printing press was invented). There will always be someone who tries to scare you into clicking on a story or watching a TikTok video. The more clicks, the more ad sales. The more ad sales, the more income.

It's a vicious cycle.

Their version of the truth is scary

The most recent example of this is a TikTok video sent by a friend. It featured three attractive 20 (or 30)-somethings talking about how FedNow -- a new Federal Reserve program due to launch next year -- is going to change life as we know it.

The very serious young woman spreading the fearsome news goes on to say that FedNow is a way for the federal government to know how you're spending your money. In fact, she claims the government will shut off your access to funds if you spend money on the "wrong things," like fossil fuels.

At first, the guys sitting to her right appear somewhat disinterested, but as her passion picks up, so does their interest. After a few minutes, both gentlemen are adding to the conspiracy theory. Here's some of what they're telling viewers is going to happen:

• FedNow will be "getting rid of the middleman," doing away with payment apps like CashNow, PayPal, and Venmo.
• The service will do away with cash, forcing Americans to use a new digital currency.
• FedNow will make it impossible for people to have access to money unless they go along with the government's plan and use the app.
• The service will track and monitor the way Americans spend their money.
• FedNow will become the government's own digital currency.

None of it is correct -- not even close

Again, trauma sells. The more TikTok creators scare people, the more those people will come to them for advice. I would like to think that they're true conspiracy theorists, because that would be preferable to the alternative: That they're deliberately taking advantage of people by spreading false information.

The truth matters

In answer to each piece of somewhat hysterical (but poorly researched) information, here's what the new FedNow Service will mean to you:

• Apps like CashNow, PayPal, and Venmo are not going anywhere. As president and COO of OneUnited, the largest Black-owned bank in the U.S.,Teri Williams provides the answer. "The first thing they need to know is that CashNow, PayPal, and other apps are not going anywhere. Those services may actually use FedNow and will be able to transfer money more quickly than they have in the past. It's a win-win."
• FedNow is not a digital currency and cash is not on its way out. The FedNow Service is simply a way for the Federal Reserve to update how quickly money is transferred from one bank to another. Back in the day, we wrote checks. The person or company we wrote those checks to had to wait for them to move through the postal system, hit the recipient's bank account, and spend two or more days pending until they cleared. It can even take days for a more modern ACH payment to clear. With FedNow it will be possible for a payment to be made, hit an account, and clear immediately.
• FedNow Service is not an app. According to Williams, "It's not an app. It's not digital currency. It's a way to transfer money between bank accounts quickly."
• FedNow is not a way for the government to track your spending. If the government had any interest in tracking you, they've had the means to do it for decades. As Williams says, "It's really important that you manage your money in a way that doesn't require secrecy. Whether it's Venmo, CashApp, or whatever, there's an electronic footprint you're leaving."

Bottom line

One thing humans avoid like the plague is change. Change feels unpredictable and scary -- even good change. According to banks signing on to the FedNow Service, this change will be good for all of us. Business owners will no longer have to wait for payments to clear. Homeowners can pay an electric bill and know their account is immediately up to date. It's all about the Federal Reserve moving into the 21st century and making it easier for all of us to do business as usual.

The moral of the story is twofold: The FedNow Service is an example of the Federal Reserve trying to keep up with the times by providing instant service. The other moral of the story? For the love of all that's good, do not get your news from random people on TikTok.