As a purchaser of real Sudafed to deal with cold congestion I can assure you the Government doesn't not need a cashless society to exert control over what you purchase. If I have to have all merchants online so the database can check if you've exceeded your non-insect protein allocation for the week, does it really matter if you are identified by your State issued ID or by your cashless payment method?

The cashless part just makes it harder for you to exchange money with other citizens, it doesn't fundamentally change your experience with the merchant who will be required to enforce purchase limits and other policies. The funds check is separate from the "will we allow you to buy that" check.