The debate over whether we should become a cashless society shows no signs of abating soon, but in the meantime plenty of compelling reasons remain for using cash in a variety of situations.
While some businesses are embracing cashless payments, and the whole country of Sweden is moving in that direction, cash isn’t about to disappear. Too many businesses still depend on coins and bills to sell their wares. Cash remains king at fast food restaurants, for instance, where 41% of the business accounts for cash transactions. Cash also remains a significant portion of business at gas and convenience stores (33%), mass merchants (32%), restaurants and bars (26%), and warehouse clubs and food stores (25%), according to IHL.
With so much business still conducted in cash, don’t expect it to disappear any time soon. Besides, some customers cannot pay with anything but cash, since they are unbanked or under-banked.
When Banking Isn’t Available
Currently, the number of Americans without bank accounts is 5%, according to a Federal Reserve report. In Europe the number is higher – 14%. And the World Bank estimates that globally 2 billion people are unbanked.
If forced into a cashless system, unbanked and under-banked people would be disenfranchised, unable to buy food, clothing and other life necessities. Most people don’t choose to be unbanked or under-banked; they simply have no access to the banking system. In some cases that’s because they live in rural or inner city communities where bank branches are scarce.
Banks also deny people accounts if they fail a background check or they’ve had too many overdrafts of bounced checks in the past. Other reasons for unbanked or under-banked people include distrust of banking institutions, unemployment, illiteracy and banking fees.
A cashless society would disproportionally affect the poor and other vulnerable communities, such as recent immigrants who haven’t had enough time to build up credit or open a bank account.
Security Issues
Some consumers choose to pay for purchases with cash because of security concerns. Every time another big company suffers a breach that compromises payment card information, consumers worry about how that impacts them.
In 2017, the consumer credit reporting agency Equifax suffered one of the biggest breaches to ever grab headlines. It compromised personal data of almost half of all Americans (145.5 million), including driver license numbers birth dates, addresses and Social Security numbers.
Consumers have good reason to worry about a potential cashless society. One of the possible consequences of having personal data stolen through a security breach is identity theft, which can cause years of headaches for victims. Through identity theft, cybercriminals can empty a person’s bank account, use their credit cards, get government benefits and even apply for a job in the victim’s name.
Paying Cash for Online Purchases?
While there is an undeniable push for cashless systems, there is just as persistent a movement to continue using cash. It is even possible to pay for online purchases with cash, thanks to a product called Paysafecash. It allows buyers to go to a nearby location to pay with cash for an online purchase. How successful Paysafecash will be remains to be seen, but one thing is for sure: As long as initiatives and technology like Paysafecash are introduced, you can bet cash will stick around for a long while.
FAQs
But many people think cash is still king. They say using it keeps customers from overspending since they can see how much money they have left after a purchase. They also argue that not everyone has access to digital payment options. This is part of the reason why the U.S. has not yet gone cashless.
Why will cash never go away in the US? ›
There are many reasons experts list in arguing that cash must remain a viable payment option: Going cashless excludes the millions of unbanked and underbanked people in America, most of whom are people of color; cash is the best way to pay while maintaining a modicum of privacy; cash is integral to many cultural ...
Will cash disappear soon? ›
From paper to polymer banknotes
We have been issuing banknotes for over 300 years and make sure the banknotes we all use are of high quality. While the future demand for cash is uncertain, it is unlikely that cash will die out any time soon.
Are we becoming a cashless society? ›
The concept of a cashless society has been around for decades. But with 80% of payments in the US being made digitally in 2022, and four in ten of us ditching change altogether, research suggests that the transition from physical currency could take place sooner than we once thought.
Is the US trying to go cashless? ›
It might be said that the US is headed toward a cashless society. Some small businesses have even put up signs saying that they no longer accept cash, another factor that's driving this change. Cash payments can take longer, limit potential sales, and open up businesses to the possibility of an audit.
How long until cashless society? ›
A cashless future enabled by technology
We may not be a cashless society by 2060, much less by 2030. But the fact is we're closer to becoming a nearly cashless society every day. The transition from a mostly cash to nearly cashless society didn't happen overnight.
Which banks are going cashless? ›
Commonwealth Bank, ANZ, NAB and Westpac all confirmed on Friday that there are no current plans to go cashless. This comes after Macquarie Bank announced it would phase out cash and cheque services across all its banking and wealth management products from January to November 2024.
What would happen if the US went cashless? ›
While a cashless system would likely make it easier to track the transactions and freeze the accounts of certain criminals, the lack of an easy, cash alternative would likely push many larger criminal organizations into offshore banking, Bitcoin-style currencies, and other sophisticated digital tricks that would make ...
Which country is getting rid of cash? ›
Sweden. With a date set in 2023 to go completely cashless, Sweden is arguably the closest country to achieve this. It is currently not uncommon to see signs that say “No Cash Accepted” in various shops in Sweden.
Why are banks going cashless? ›
The fear of transmission coupled with lockdowns and other restrictions led to a boom in online shopping and cashless payments globally. As consumers continue to embrace the legacy of the pandemic and a surge in finance technologies, cash payments are expected to continue to decline in the coming years.
While it may be tempting to stash your money in cash, cash doesn't outpace inflation in the long term. “When we look at cash equivalents, it's very difficult to beat inflation long term by parking lots of capital in those types of accounts,” says Ashley Weeks, Vice President and Wealth Strategist at TD Wealth.
What will replace money in the future? ›
The future of money is expected to be heavily influenced by technology. Predictions include the rise of cashless societies, the growth of cryptocurrencies, the continued adoption of digital currencies, and the potential offering of a Central Bank Digital Currency (CBDC) by governments.
Is China cashless? ›
As of June 2023, about 943 million people in mainland China used mobile payments, bolstering the country's status as the world's largest cashless society.
Who is left behind in a cashless society? ›
Cashless society: disadvantages
Elderly people may be less comfortable with tech and less able to make the switch from physical currency. Rural communities could also be left vulnerable, because of poor broadband and mobile connectivity. People with low income or debt tend to find cash easier to manage too.
Who is leading the cashless society? ›
Norways is the most cashless country, with only around 2% of payments being made by cash, and 100% of the population having a bank account.
Why should cash be kept? ›
Key takeaways
Reasons people keep cash at home include emergency preparedness, financial privacy concerns and mistrust of banks. It's a good idea to keep enough cash at home to cover two months' worth of basic necessities, some experts recommend.
Why is it better to keep cash? ›
As an emergency fund
This is cash you might keep aside for a specific purpose, such as a rainy-day fund, an unexpected large expense, or a purchase in the near future.
Why you should always keep cash? ›
Cash allows you to purchase essential items like food, water, and medical supplies when electronic means of payment are unavailable. Cash can also serve as a backup in instances of identity theft or fraud, offering an alternative means of payment while resolving any issues that may arise.
Why should we still use cash? ›
It ensures your freedom and autonomy. Banknotes and coins are the only form of money that people can keep without involving a third party. You don't need access to equipment, the internet or electricity to pay with cash, meaning it can be used when the power is down or if you lose your card. It's legal tender.
