By Indi Rooney
Is the U.S. becoming a cashless society? Sweden is already moving in that direction. Cash payments are currently only 15 percent of retail sales in Sweden and they have a goal to be completely cashless by 2023. You’ll have to pay by card or mobile app.
Would this concept work in the U.S. where cash has long been considered king? What are the pros and cons of a truly cashless society?
Reduced crime is one of the proposed benefits of moving away from cash. Think about it. There’s no actual money to steal. Plus, there is always a paper trail of transactions which reduces money laundering or other unsavory activities. But the most attractive benefit may be pure speed. Going cashless is faster for retail establishments. It takes less time to swipe a card or tap an app than to make change and secure cold hard cash safely.
Cashless detractors claim cards and apps expose businesses to hacking. There is also concern that those without a credit card or smart phone simply won’t be able to make purchases. But as digital payment options become more and more popular at coffee shops, gas stations and grocery stores, we are moving closer and closer to a cashless society.
Digital payment options are expanding from traditional debit cards and credit cards to a flurry of new mobile payment apps and transactional platforms. According to the FDIC, cash represented just 30 percent of all payments in 2017. Furthermore, 68.7 percent of U.S. households had a credit card in 2017 versus 63.8 percent just two years earlier.
We are probably decades from going completely cashless in the U.S. because there are still a lot of people in our country that rely on cash. However, studies show that people spend less when paying with cash as compared to the convenience of credit cards. It’s sound advice for people trying to pay down debt or save money.
Safer, smarter and more accessible digital payment options continue to appear all around us. Credit card companies offer businesses access to company cards that cover not only everyday purchases but also targeted buys for items such as office supplies and fuel for fleets of vehicles. Credit card processing options are embracing better technology for wireless connectivity at kiosks, ATMs and other point of sale systems.
Could all of this add up to even better digital options with more inclusive access for those with banking restraints? That might eventually spell the end of cash as we know it. To be clear, cash isn’t dead yet in the U.S., but we predict cash may cash it in in our lifetimes.