Will Cash Payments Disappear Any Time Soon?


It was in the early 1920s that the California-based General Petroleum Corporation, which operated a nationwide network of gas stations, issued what would become the prototype for bank cards: preferred cards. Using these cards, you might save money on fuel and other items, or even pay for them. In a short time, other gas station networks, and eventually big retail chains, adopted General Petroleum’s idea.

Originally, the cards were composed of cardboard, which rapidly deteriorated into dust. This did not sit well with either the companies providing the cards or their consumers, who were not impressed. Demand for more durable cards was met by the market’s supply of more durable cards. A predecessor of the Charge Plate metal card was launched in 1928 by Boston-based Farrington Manufacturing, which specialized in engraved metal boxes and cases. It rapidly became ubiquitous in retail chains.

Bank cards and their issuers are virtually all embossed or pushed out now. As a sort of homage to the past: The seller took the buyer’s credit card and used a special press – an imprinter – to imprint the buyer’s credit card on the invoice. According to the card holder’s imprint, he had purchased the product. Embroidery allegedly eased and expedited buyer-seller interactions by removing the seller’s need to manually fill up and insert buyer’s information into sales receipts.

It was in the 1990s when cashless payments became extremely popular, as electronic banking became the norm in wealthy nations before slowly spreading to poorer ones. Globally, digital payment systems have become widespread by the 2010s. In addition to a conventional card, users may now pay with a digital card through a smartphone or smartwatch. Cash has become a waste of time, and others believe it should be completely eliminated.

We are often told that digital money is more efficient and that cash is used in the criminal realm. When compared to paper money, cashless payments are speedier and more convenient. Coronavirus, according to the World Health Organization, may survive for three to four days on paper.

Consumers, on the other hand, don’t need to be convinced to convert to cashless payments. Seventy-five percent of respondents to the 2016 U.S. Consumer Behavior Survey selected credit or debit cards as their payment method, while just 11 percent preferred cash. There would be more card users if the research was done now.

Cash as a Payment Method – Still Popular?

Contrary to popular belief, cash is still the most popular payment method in the United States, according to a Federal Reserve System report from 2018. 30% of all transactions and 55% of transactions of less than $10 are carried out using this method Cash is still king, especially when it comes to minor purchases.

In addition to that, it is worth noting that cash money from time to time loses its popularity in the trading sector. One of the examples of this is the Forex market, which is one of the largest markets around the world. As time goes by, the Forex market becomes more and more digital. Instead of exchanging money face to face, people started to exchange currencies through the help of digital platforms. This means that fiat money in Forex is no longer relevant and one of the main factors, which has shown this kind of tendency was the burst of Coronavirus pandemics. Many traders and investors, nowadays, implement transactions through cashless money. In addition to that, the popularity of decentralized and digital money increases among individuals. All of this means that in capital markets, and mostly in Forex trading, people start to use cashless money.

Pew’s survey backs up these conclusions. Most Americans still prefer to pay with cash, despite the fact that the number of people utilizing alternative payment methods is increasing. Individuals over the age of 50 are more likely to have cash on hand than younger adults. In addition, Americans with lower incomes are more prone to rely on cash payments.

Despite the fact that cash is still the most popular payment method, it has declined from 33% of transactions in 2015 to 30% in 2017. Payments made with credit have risen from 18% to 21% in the same time period. According to Federal Reserve research, debit accounts for 27 percent of payments, while electronic transfers account for 10 percent.

The United States also has a tendency to choose alternative payment methods for larger purchases, according to a study. For transactions between $25 and $99.99, debit and credit cards are more popular than cash. And Americans are more inclined to utilize electronic transfers for larger transactions, such as mortgage and loan payments, than for smaller ones.

Then, for how long will there be cash? Andrew Morris, senior counsel for research and policy at the National Association of Federally-Insured Credit Unions, says that although the United States is moving away from cash, it won’t disappear anytime soon. In his opinion, “cash will be around for a long time.”

Cash, he says, will continue to be utilized for small-value transactions, as it is now. But Morris said if the Federal Reserve’s real-time payment settlement system is established, the shift to a cashless world may come sooner.

Payouts may be paid instantly, allowing cash to be available immediately after transactions are finished. Customers may pay small company owners with credit or debit cards and the money will appear in their account immediately. He’d get compensated right away. In Morris’ opinion, “faster payments may be a game-changer.”

Faster transactions are actually the major benefit of a cashless society, according to him. Nevertheless, if currency disappeared completely, there would be downsides, such as the greater chance of fraud. In the event of a crisis, the main negative would be the absence of payment alternatives. It would be really tough to pay for items if you didn’t have cash if the power went out and you couldn’t swipe a card.

“As the effectiveness of cashless choices improves, those obstacles will eventually collapse,” Morris said.

But Jeff Ramson isn’t waiting around for a cashless society to take hold. It won’t be long before we live in a cashless world, according to Ramson who is the founder and CEO of PCG Consulting Group which provides advisory services to the digital assets industry.

A digital currency is expected to replace the dollar and other government-backed currencies, says Ramson. A few difficulties must be conquered before all cash is gone.

All customers must be brought onto the ‘digital grid,’ so to speak, Ramson added. Each and every one of us will require a bank account, and we’ll also need continual access to the internet via mobile devices.”

Because of the built-in fraud protection provided by encryption technology, a cashless society would make transactions easier, more efficient, and safer, he added. Even so, fraud will not be abolished. There is always a worry with digital currency and transactions, Ramson added. Trust in the organizations that make digital transactions possible will also be required for a cashless society. As a consolation, your money will be safe.

Cashless Society

An entirely cashless world may sound like a sci-fi fantasy, but the reality is that it’s already happening. Several powerful forces, including certain governments and big financial services firms, are pushing the drive to a cashless society.

Many social concerns must be solved before society can completely give up on currency. Paying using a debit or credit card has several advantages and downsides that you should be aware of.

Anyone with the technology to take advantage of a cashless world will probably find it handier than they thought it would be. Your cash is instantly accessible as long as you have your card or phone with you. There are other advantages as well. We’ll list a few more perks.

There is no way to trace down the money that has been stolen from your wallet once it has been transferred to the criminal’s wallet.

In a cashless world, financial crime should also be curtailed. Sources of funding must constantly be identified to make money laundering more difficult.

Money-free shopping isn’t simply handy; it also saves the environment. Massive security teams are hired by banks to safeguard their branches against physical bank robberies. As more and more transactions become cashless, the need to move money and secure huge quantities of cash may become obsolete in a cashless future.

It’s possible that you’ll need to convert your dollars for local money when you’re traveling. There is no need to worry about how much local currency you’ll need to withdraw if your destination allows cashless transactions. Instead, your mobile device takes care of everything for you, saving you time and energy.

It’s possible that being cashless is more troublesome than advantageous, depending on your perspective. A cashless financial system has a few drawbacks.

Because of this, electronic payments are less secure than cash payments. You may have confidence in the businesses that manage your data, and you may not have anything to conceal from anyone. It’s important to remember that the more information you put out there, the more probable it is to fall into the wrong hands. Spending and receiving money anonymously is made possible through the use of cash.

People in cashless societies are more vulnerable to hackers since they have less money. Some people may not have any other means to spend money if they are targeted. However, even if you’re covered by federal law, it will still be difficult to restore your financial position when a breach occurs.

You may be unable to purchase items when you need them because of technical glitches, outages, and innocent mistakes. Similarly, merchants are unable to receive payments if their systems are not working properly. For instance, a dead phone battery might leave you “penniless.”

Poor and unbanked people in a cashless world would certainly have an even tougher time if outreach attempts are not done. As smartphones become the norm, people who cannot afford them will be left behind. For now, contactless contribution methods are being tested in the United Kingdom, but they may not be ready to replace cash payments.

Due to the high volume of transactions, payment processors may charge fees, which would negate the savings that should come from reduced cash handling.

In the absence of currency, all payments are made electronically. An electronic transfer of funds from a bank account to another person or business replaces the need for paper currency and coins. A cashless society has yet to be fully developed in terms of logistics, but there are some clues as to how it may develop.

As popular as credit and debit cards are, they may not be enough to maintain a cashless world. As a result, mobile devices might replace desktop computers as the major means of payment.

For person-to-person payments, electronic payment applications like Zelle, PayPal, and Venmo are useful. Bill-splitting applications, on the other hand, allow pals to share their costs quickly and fairly. Account-to-account (A2A) online payments are supported by fintech firms such as Stripe, Adyen, and Fiserv in a reliable and timely manner.

Cashless payments are made possible by mobile payment systems and mobile wallets such as Apple Pay. Mobile devices have already become ubiquitous payment instruments in several countries that use cash infrequently.

In addition, the topic of cryptocurrency has been brought up. This type of technology is already in use for transferring funds, introducing competition and innovation, which may help keep prices low. As a result of the dangers and regulatory difficulties they face, they may not be suitable for broad usage yet.