Will cash still be around in 20 years?
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.
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.
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.
Physical currency isn't becoming obsolete any time soon, so it's important to weigh up your options before deciding to go fully cashless in 2024. Ensuring you can accept some cashless payments though, is essential to keeping with today's trends and customer expectations.
In an effort to assert sovereignty, many central banks, including the U.S. Federal Reserve, are considering introducing their own digital cash, known as a central bank digital currency (CBDC). For proponents, CBDCs promise the speed and other benefits of cryptocurrency without the associated risks.
It might be said that the US is headed toward a cashless society. Some small businesses have even put up signs saying that they no longer accept cash, another factor that's driving this change. Cash payments can take longer, limit potential sales, and open up businesses to the possibility of an audit.
Reasons people keep cash at home include emergency preparedness, financial privacy concerns and mistrust of banks. It's a good idea to keep enough cash at home to cover two months' worth of basic necessities, some experts recommend.
The US is moving toward cashless payments, with a substantial increase in the use of mobile wallet apps and contactless cards. A report from the Federal Reserve Bank of San Francisco found that payments made using cash accounted for just 18% of all US payments in 2022.
Commonwealth Bank, ANZ, NAB and Westpac all confirmed on Friday that there are no current plans to go cashless. This comes after Macquarie Bank announced it would phase out cash and cheque services across all its banking and wealth management products from January to November 2024.
When it comes to budgeting, yes. A study by the British Retail Consortium (BRC) has some in the FinTech space a flutter due to a surprising find: Cash usage grew for the first time in a decade, rising to 19% of all transactions (from 15% in 2021).
Which country will go cashless?
With a date set in 2023 to go completely cashless, Sweden is arguably the closest country to achieve this. It is currently not uncommon to see signs that say “No Cash Accepted” in various shops in Sweden.
As of June 2023, about 943 million people in mainland China used mobile payments, bolstering the country's status as the world's largest cashless society.
The only way to pay for stuff in a cashless society is through digital transfers. These transfers can be done with debit or credit cards or through digital wallets (think Cash App, Zelle, PayPal, Google Pay, Venmo and Apple Pay).
But it is unlikely that there will be any major shift soon. The US economy is not only the largest economy in the world but is also diversified, dynamic, innovative and relatively flexible. While its share of global GDP has fallen, this is due to rising shares of emerging markets.
The collapse of the dollar remains highly unlikely. Of the preconditions necessary to force a collapse, only the prospect of higher inflation appears reasonable. Foreign exporters such as China and Japan do not want a dollar collapse because the United States is too important a customer.
Some say it will be the euro; others, perhaps the Japanese yen or China's renminbi. And some call for a new world reserve currency, possibly based on the IMF's Special Drawing Right or SDR, a reserve asset.
On one hand, transitioning to a cashless system can reduce crime rates, streamline financial transactions, and simplify international payments. On the other hand, it raises concerns about privacy, cybersecurity risks, technological dependency, economic inequality, and the potential for increased overspending.
Today, roughly four-in-ten Americans (41%) say none of their purchases in a typical week are paid for using cash, up from 29% in 2018 and 24% in 2015, according to a new Pew Research Center survey.
Cash remains king – 67% of Americans still use traditional in-store payment. Recent data from YouGov Profiles provides an overview of how American adults are engaging with mobile payment systems, and their choices for in-store and online purchases over the last 30 days.
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.
Can I deposit $50,000 cash in a bank?
You can deposit as much as you need to, but your financial institution may be required to report your deposit to the federal government. That doesn't mean you're doing anything wrong—it just creates a paper trail that investigators can use if they suspect you're involved in any criminal activity.
It's perfectly legal to do so, but know that cash deposits over $10,000 will be reported to the federal authorities. That's not a problem as long as you can document a legal business that produced that cash.
Cashless society: disadvantages
Elderly people may be less comfortable with tech and less able to make the switch from physical currency. Rural communities could also be left vulnerable, because of poor broadband and mobile connectivity. People with low income or debt tend to find cash easier to manage too.
A cashless society is one in which cash, in the form of physical banknotes and coins, is not accepted in any financial transaction.
The fear of transmission coupled with lockdowns and other restrictions led to a boom in online shopping and cashless payments globally. As consumers continue to embrace the legacy of the pandemic and a surge in finance technologies, cash payments are expected to continue to decline in the coming years.
