The credit card companies and the commercial banks would lead consumers to believe that their so-called “War on Cash” is being won.
Examining the statistics worldwide on cash issuance and usage, one concludes that while, as stated above, the rate of growth in cash (not cash itself) may be declining in some countries, cash overall continues to grow worldwide between 5% and 8% per year.
Supporting this trend are the following banknote circulation and growth charts from the European Central Bank (ECB) and the US Federal Reserve respectively:
Cash is the most commonly accepted and reliable form of payment for a business. Many small businesses operate as "cash only" merchants. Years ago this wouldn't have been uncommon, but with advances in technology, business owners must ask themselves if they're hurting their bottom line by limiting payment options.
Cash plays a dominant role for small-value transactions, is the leading payment instrument for many types of purchases and stands as the key alternative when other options are not available. Despite the rise of plastic cards and electronic money transfers, cash is still the most important kind of money in the world.
If millennials are supposed to be the first generation going mostly cashless, they are making the move halfheartedly.
Millennials still rely on cash — 80 percent of millennials carry greenbacks. And 42 percent still write checks, according to the Accel + Qualtrics Millennial Study 2017. And that could be a good thing, as some advisors say a cash diet is the best way to pare down debt.
Digital wallets continue to look for some respect.
After kicking around for years, a mere 16% of consumers have ever used a digital wallet, based on a new study. Even worse, consumer awareness and understanding of digital wallets is low, according to the study conducted by Forrester Research for JPMorgan Chase. The study, ‘The Intersection of Payments and Commerce in a Digital World,’ comprised an online survey of 1,500 U.S. adults who go online at least weekly, and a survey of 800 merchants responsible for their company’s payment decisions.
There is a lot of discussion about the death of cash throughout the financial technology industry. This mentality has even spread to mainstream media, producing articles such as “Millennials are Saying Bye-Bye to Paper Money” and “Why Don’t Millennials Use Cash?” These pieces are widely published and disseminated, despite the consistent use of assumptions which are primarily based on anecdotal evidence, rather than hard data from a multitude of sources. So what is the real story on currency?
Even as credit and debit cards become more popular and new payment methods like mobile wallets enter the scene, the world’s largest economy still relies on cash more than any other payment method.
According to research revealed inside the new PYMNTS.com Global Cash Index™ United States Analysis, while there may be a recent onslaught of payment cards, digital wallets and contactless payments, nothing has come close to replacing cash in the U.S.
It’s our family’s policy to use cash whenever possible. Why? Mainly because using cash causes us to spend less. When we make a budget, we stick to it. That can sometimes be hard if you use a debit card or credit card instead of cold, hard cash. A plastic card is impersonal. You swipe it and magically get to take something home (as long as there is money in your account), even if you didn’t budget it. But that $50 bill in your pocket…that puppy is personal. It’s attached to your hand. You SEE it. It causes you to really think over what you’re about to buy…realizing that once it leaves your hand, it’s GONE. “Hmmm, do we REALLY need Kleenex this month?” This is one of the biggest reasons to use cash this year.
Take control of your money and improve your life.
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