The Future Of Cash

 

Millennials and Gen Z people use cash less and less. Some studies suggest that, in the next couple of decades, paper money will disappear altogether. Think about it. How often have you found yourself in a place of business that doesn’t accept cash in the past several years? The situation becomes even more fascinating in the testing COVID times we are living in right now. With the majority of people’s purchases happening online, cash seems almost obsolete. So, what is the future of traditional currencies? 

Reasons Cash May Disappear 

The proponents of the idea paper money will and should very soon get out of general circulation make a compelling case. The evidence in defense of their stance falls into the following categories:

  • The move toward online payment;
  • Easier fight against crime;
  • Restructuring in the bank and credit sectors;

Each of these suggests not only will cash become obsolete, but that is also the right thing. One can make the argument a cashless society is going to be fairer. It will benefit the common person, and it will run more efficiently. 

Online Payments

Since 2012 the Federal Reserve marks a constant steady increase in non-cash payments in the United States. Consumers pay between 3 and 5 percent more often without cash for purchases, year after year. Just a few decades ago checks used to be the only non-cash payment method available to the common man. The rise of the internet made it all too easy for everyone. Today consumers can choose from:

  • Credit and debit cards;
  • Electronic bank transfers;
  • Direct deposit;
  • Various online payment methods (PayPal, cryptocurrencies, and the like);

You have to resort to the good old cash only when these methods fail. But let’s be honest for a moment. How common it is to find yourself in a situation when you can’t pay any other way than cash. And these methods are generally much more convenient. 

Crime Fighting 

The Federal Government has an interest in reducing the amount of cash citizens use. That has a marked positive effect on crime-fighting. In modern times, large cash deals are often closely associated with illegal activity, like drug deals, tax evasion, and other sinister deeds. When cash is no longer a thing, criminals will have a much harder time covering their tracks. 

Changing Business Models

Online transactions cost banks and other financial institutions much less than regular cash transactions. They are already stimulating their clients to use credit and debit card transfers to pay for goods and services. The most common method is charging lower fees for such transactions than, let’s say, depositing a sum at a cash register. The strive for business optimization by banks and credit unions is just another nail in the coffin of paper money. 

The Other Side Of The Coin

There are some good arguments for keeping cash as a part of our financial system. Cash is still the most common means of exchange for the most economically unprivileged in our society. Privacy protection is another thing. People who worry about identity theft and losing sensitive private information in the digital world still prefer to pay in cash.

Conclusion 

While there are some good reasons to still keep cash around, there is an evident trend for moving to fully moving to electronic transactions. Paper money will most likely still be around for years. In the not-so-distant future, though, they will most likely be remembered as an artifact from another world.