In a socially distant world where payment is as easy as a tap or a swipe, is cash still as valuable as it used to be? While cash remains relevant, it is no longer considered king. Electronic payments have taken over checks, and card payments have experienced significant growth. However, cash still dominates transactions under ten dollars, with two-thirds of these transactions still being conducted in cash.
The COVID-19 pandemic has also had a noticeable impact on cash usage. The risk of contamination has led to a decline in the use of cash, as people have shifted towards contactless payment methods. Major companies like Apple, Square, and PayPal have seen a surge in demand for their cashless payment solutions.
With the increase in digital transactions and the decreasing use of cash, some wonder if the pandemic is signaling the end of cash in the United States. Nearly a third of U.S. adults report making no purchases using cash during a typical week. The Federal Reserve has also found that cashless methods of transactions, such as debit cards and mobile payments, have increased over the past few years, while cash and check payments have decreased.
Millennials are leading the charge towards a cashless future, with one in ten using their digital wallets for every purchase, especially for food, rent, and ride shares. Pew Research has also found that adults under 50 are more likely to make no purchases using cash compared to older adults.
The COVID-19 pandemic has further accelerated the decrease in cash usage. The potential hygiene issue of banknotes has made people hesitant to use cash, resulting in a decline in its usage. This has led to a tipping point in e-commerce, with the acceleration of digital transactions happening much faster than anticipated.
Both cash and electronic payments have their advantages and disadvantages. Electronic payments offer convenience, simplicity, efficiency, and security. Cash, on the other hand, provides flexibility and is relatively free from charges. However, transitioning to a cashless world raises concerns about discrimination and access to goods and services for those without bank accounts or credit.
While major companies have experimented with cashless models to cut costs, there has been public backlash, accusing them of discrimination. Some states and cities have even passed laws to ban cashless stores to ensure fair access to goods and services for all.
Despite new technologies and the rise of cryptocurrencies, experts believe that the United States is still far from becoming entirely cashless. The demand for cash remains high, and the amount of money in circulation continues to grow. While the COVID-19 pandemic has accelerated the trend away from cash, it is unlikely to lead to a cashless society.
In conclusion, cash is no longer considered king in a world where digital payments are on the rise. While cash usage has declined, it still holds significance, especially for small transactions. The COVID-19 pandemic has further emphasized the preference for contactless payments, but a cashless society is not yet in the near future for the United States. The demand for cash remains high, and concerns about discrimination and access to goods and services continue to be raised.