Will cash eventually disappear?
No! Many experts say there's no need to empty your piggy bank just yet. Going cash-free isn't possible for people who don't have access to the right technology.
We have been issuing banknotes for over 300 years and make sure the banknotes we all use are of high quality. While the future demand for cash is uncertain, it is unlikely that cash will die out any time soon.
This author says that's a false narrative. If it's been a long time since you pulled out actual dollars and coins to pay for something — here's a conversation for you. It might seem like cash is slowly becoming obsolete. But, Brett Scott says it's a false narrative that we're all pining for a cashless society.
Two-fifths of Americans used no cash in 2022 (Source: Pew Research) 11% of US adults have completely stopped using cash, up from 5% five years ago (Source: Gallup) The average number of cash payments fell from 26% in 2019 to 20% in 2021 (Source: Federal Reserve)
As people move toward more electronic or digital forms of payment, it might seem like paper money is on its way toward obsolescence. But experts say that cash will always be around.
Nope. We might use less cash, but our society still has a long way to go before it's totally and completely cashless. And just because some stores didn't want to accept dollar bills for a while (and maybe still don't), that doesn't mean a cashless society is here to stay.
Cashless transactions are becoming more common globally, as digital and card payments proliferate. Around the world, people increasingly rely on debit and credit cards, mobile payment apps, and other digital payment methods for their daily transactions.
She estimates that Australia will enter into a cashless society by 2030, slightly later than Commonwealth Bank's prediction of 2026, and argues for government regulation of digital payment services to help navigate the transition.
- Sweden.
- Finland.
- China.
- South Korea.
- United Kingdom.
- Australia.
- Netherlands.
- Canada.
Cash can play a role in criminal activities such as money laundering and tax evasion. Using digital money prevents the transfer of physical money, and all transactions are handled using computers and the Internet.
Why shouldn t the US go cashless?
Decreased Monetary Security
When you have cash in hand, you know it's safe from everything except direct robbery or physical destruction. But when your money is in digital form, it's vulnerable to hackers and system malfunctions.
Is the US Going to Digital Dollar? As of June 2024, the US Federal Reserve has not decided to transition to a CBDC or supplement its existing monetary system with one. It is researching the effects a CBDC would have on the dollar, the US, and the global economy.
A cashless society would rely on a complex network of digital systems, which would be vulnerable to cyberattacks. If these systems were hacked, it could have a devastating impact on the economy. Privacy is the third challenge raised. Cash can be exchanged anonymously, leaving no digital trail.
All of the Big Four banks - Commonwealth Bank, Westpac, ANZ and NAB - have ruled out going cashless. However, hundreds of bank branches and ATMs have been closing across the country. Supermarkets Coles and Woolworths have also reduced the amount of cash that customers can withdraw.
China's cashless evolution is a remarkable story, as the country transitioned in less than two decades from a cash-first society to one with an 86% mobile payments penetration rate.
In a cashless society, financial transactions are not conducted with physical banknotes or coins, but instead with digital information (usually an electronic representation of money).
Although paper-based currencies are becoming less popular, they will likely stick around for the foreseeable future. Dollars and cents may become harder to use, but as with many obsolete technologies, there are enough users to ensure demand doesn't disappear completely.
On the impacts of a cashless society, I think other witnesses have clearly said this in a very effective way: We know that those who suffer most in a cashless society are immigrant communities, senior citizens, unbanked and/or unhoused persons, and others who are likely to depend on cash.
In general, the Nordic countries lead the way for cashless payments. Arguably, this is because Nordic populations have high trust in institutions, such as banks, and an openness to new digital technologies including amongst older generations.
Non-cash payment methods overtook cash transactions in 2016, spurring many to predict the end of cash usage in the UK. Payments UK predicted card will overtake cash by 2021, and research by Mastercard shows consumers believe 2036 is the year we will stop using paper money whatsoever4.
Which country is closest to cashless?
And, if you're interested in going cashless, we can help you compare quotes from EPOS system providers. Just fill in our quick form. Norways is the most cashless country, with only around 2% of payments being made by cash, and 100% of the population having a bank account.
No country has achieved a fully cashless economy yet, but countries like Sweden, Canada, and the UK are leading in this transformation. Is India ready for a cashless economy? India has made progress but still faces challenges in terms of digital infrastructure and the digital literacy of its population.
Analysis from Barclays Investment Bank, meanwhile, predicts that the global transition from cash to digital payments would reach a tipping point moment in 2025, when absolute cash usage would decline from 41 per cent in 2019 to 20 per cent by 2030.
Sweden has led the way in Europe in going cashless, but fast and easy digital commerce have left consumers and the state vulnerable to fraud. Digital crime in Sweden has doubled since 2021 and become a growing risk for the Nordic economy.
Low earners are most likely to use cash
Lower earners prefer businesses to accept cash (44%) compared to only 32% of those who earn $150,000 – $200,000. Lower earners are more likely to pay for essentials such as groceries using cash, than higher earners.
