Will cash eventually be phased out?
Efforts in Sweden and China to move away from cash in favor of other payment methods have portrayed cash as outdated. Modern, forward-thinking countries are moving towards a cashless society.
The shift in payment methods indicates a potential future where cash may no longer be necessary. Even though cash remains vital and widely used in the developing world, people tend to opt for debit or credit cards given the choice. A study by DepositAccounts revealed that one-third of Americans cannot make a $20 cash payment without visiting an ATM. Conversely, in China, a nation with a deep history of banknotes, cash is rapidly being replaced by digital payments. By 2017, over three-quarters of the Chinese population had switched to digital payments over cash.
In the race to become the world’s first cashless society, China closely trails Sweden, which has announced plans to go completely cashless by 2023. Even in countries not aiming to eradicate cash at a national level, both businesses and individuals are gradually and voluntarily moving away from cash. This shift is also noticeable across different age groups. The survey indicated that only 65% of Gen Zers surveyed were without cash, while 97% of the Silent Generation carried cash. Although only a quarter of Americans prefer using cash, a significant majority prefers to have cash on hand for emergencies or small purchases.
The inconvenience of carrying and repeatedly using cash appears to be a significant driver behind this global transition. In the U.S., 57% favor card payments, as per the survey. With the increasing popularity of digital payments, including cryptocurrencies, more countries are likely to follow in the footsteps of China and Sweden, the pioneering nations that introduced banknotes to their continents.
