Cash is and forever will be a classic form of completing daily transactions. As the rise of digital payment forms continues, however, it’s no wonder that people have begun to place cash in the back seat of their wallets. Whether it be the convenience of virtual payments or the sheer ease of pulling out your phone and placing it above the contactless payment register, it’s never been easier to forget about the use of cash in completing a purchase.
Moving toward a “cashless society,” it’s no question that people have begun to prefer their credit or debit cards and digital applications on their phones over handing somebody physical cash. Plastic and digital payments now dominate the payment industry, as some businesses and large corporations have even begun limiting the use of cash as a component of their business model.
“…in a typical week, 29% of Americans make absolutely zero purchases using cash,” Ramsey Solutions, a wealth development and budgeting guidance company, says. “…a lot of people choose to make their everyday purchases using PayPal, Venmo, Zelle, Apple Pay, debit and even…credit.”
Beyond sticks of gum and outdated reward cards, the thought of carrying cash has become far less common in the grand scheme of payment methods, especially in the last couple of years. As wallets become full of anything except cash, space left over to carry a couple of dollar bills and some twenties is becoming smaller by the day. In a world where cash was once used exclusively, events like COVID-19 have escalated the recent downfall in cash usage.
“…after COVID-19 came on the scene, people didn’t want to touch anything that someone else touched,” Ramsay Solutions says. “It didn’t take long for businesses to decide they didn’t want their cashiers handling cash from every random consumer coming in off the street. So they started pushing for cashless payments with only cards to cut back on the spread of germs.”
As stores across the country began putting up signs that indicated restricting the use of cash as a form of accepted transaction, efforts to limit the spread of germs built a nationwide distaste towards carrying and using cash. While cash was never clean, even before COVID-19, moving away from cash usage left daily consumers and business owners with more confidence in their sanitation methods. Gradually growing away from the classic idea that “cash is king,” some individuals have also said that wealth and household income has a role to play in cash usage.
“Adults with an annual income of over $75,000 were more than twice as likely as those making less than $30,000 to say they do not make any purchases using cash in a typical week,” contributing writer and personal finance coverist for CNBC, Jessica Dickler says. “…lower income adults were about four times as likely to say they make all or almost all of their purchases with cash.”
As factors like annual household income and sanitation continue to influence overall usage, cash is still a prominent payment method throughout the country. Dominating any form of electronic payment, cash still plays a vital role in the economy, especially when it comes to low-income consumers and those who have no choice but to utilize cash on a recurring basis. When it comes to corporate America, however, some mainstream companies have hinted at becoming cashless organizations.
“…more businesses, including Starbucks and Shake Shack, experiment with becoming completely cashless establishments,” Dickler says. “(Lawmakers working to pass bills that would require retailers to accept cash allege the growing cashless trend discriminates against low-income customers).”
Regardless of how society chooses to go about it, it doesn’t seem as if cash will be disappearing as a payment method anytime soon. Considering its significant roles in the economy, companies experimenting with a cashless business model will confront difficulties associated with lower-income consumers, revealing how necessary dollar bills really are, especially in today’s economy.