COMMENTARY: Physical currency needs to go
Using cash in the year 2022 is a bit ridiculous. The 21st century has led to many advancements in science and technology, currency has seen an advancement regarding digital money and how people transfer money to each other but physical currency is still something that is used by many people.
Using physical money like cash and coins in the modern age is such an antiquated idea. Watching someone dig through their wallet or purse trying to find an extra bill or change to pay for a couple of items does not really make much sense when we have debit and credit cards that can process these transactions at a much faster and easier rate.
While some may think this only represents a small group of people who use physical currency for their purchases it just is not the case. A 2022 survey from Spendmenot found that 20% of people in the south still use cash instead of credit/debit cards.
Society should start moving away from physical currency and needs to embrace the digital age. To a degree, cash use is starting to see a downward trend in use especially in a post-COVID-19 world and even before the pandemic.
A 2018 study by the Pew Research Center found that roughly three-in-ten U.S. adults (29%) say they make no purchases using cash during a typical week, up slightly from 24% in 2015.
The same 2018 study also found that the share who say that all or almost all their weekly purchases are made using cash has modestly decreased, from 24% in 2015 to 18% in 2018.
Small businesses are also sharing the sentiment of going cashless. In 2018 CBS published a story about small business owners that are refusing cash. Michael Kaplan is a small business owner who gave his reason on why his business was rejecting physical currency: with every cash transaction, the payment process was slowing down significantly.
Besides small businesses not wanting to deal with the slower processing times and being the potential target of robberies, most Americans just do not carry cash on them as much as they used to. Evangelina Chapkanovskan reported in a 2022 article from Spendmenot that participants in a survey were asked about carrying cash on them and found that just 16% of survey respondents stated they always had bills in their wallets. 27% said they carry cash most of the time, while 37% responded that they only carry cash sometimes.
Cash use also saw a sharp decline in the year 2019 because of COVID-19 and lockdown policies that were enacted by governments around the world. Using contactless methods of payments saw a rise in use to curb the spread of COVID-19.
Physical cash is obsolete but while the world is moving slowly towards a more digital age there are some who view cash as a necessity, especially those who may not be able to afford the transition to digital transaction methods.
The Federal Deposit Insurance Corporation (FDIC) in a 2019 survey found that an estimated 5.4% of U.S. households (approximately 7.1 million) were “unbanked” in 2019, meaning that no one in the household had a checking or savings account at a bank or credit union.
For many low-income families who live from paycheck to paycheck and may not be able to keep a certain amount of money in a bank account, using cash and keeping it on them is a much easier solution than having to deal with overdraft fees, credit/debit card fees and balance requirements.
For others, using cash feels more secure than using cards and contactless methods with older Americans feeling safer having their money on them than in a bank. Physical currency is private as cash leaves no history and is universal with some countries taking other countries currencies.
While one can understand the reservations some have about going digital, the benefits that going digital can offer people should not be discounted. Technology is only going to keep advancing and parts of life will only become simpler and easier because of this.
Switching to a cashless society has benefits to consumers in the long run. For one it will simplify sending money to people, we see this already happening with online payment services such as PayPal, Zelle and CashApp.
Moving towards a cashless society will also help businesses reduce costs with cash handling fees and the services associated with it. Credit cards also have their share of processing fees for businesses that use them with the national average being around 1.5 % to 3.5% per transaction fee.
