Cash is logistically intensive and expensive to handle, not to mention the security concerns associated with its movement. It makes economic sense to do away with it for businesses, if possible, but it also disproportionately hurts the poor and people of color as is always the case.
It's the business's choice. Can be because of counterfeit money, stolen/missing cash, too much cash customers in line, cash being filthy, the money has to be taxed or accounted for. Card customers may actually exist in the same bank or government system as them.
The main reason is cash is expensive & time consuming. Cash needs to be printed or forged & requires lots of handling, it also needs replacing & to be counted. So tellers, cash machines, money pick up & transportation can all be eliminated.
The Benefits of Cash
It simply doesn't feel like you're spending more money when you're using credit cards since you can't feel the money leaving your wallet. Just as cards encourage overpaying for one item, they allow you to buy more things than you mean to.
A small wallet with cards is much easier to put in your bag than a bulky wallet full of cash. This also helps prevent theft. Secondly, technology has made online transactions much more common and convenient. It's safer and more secure to pay for things online, especially with the rise of mobile payment apps.
Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
Inflation Is Eating Away at Your Funds
According to the Bureau of Labor Statistics, the average rate of inflation from April 2023 to April 2024 was 3.4%. If you've been keeping your money in a savings account with a lower yield than the rate of inflation, you should switch over to a higher-yield account.
Countries Leading the Race: Sweden is widely considered the leader in the cashless race, with the country potentially eliminating physical cash by 2024. Other countries making significant strides include Norway, the Netherlands, Finland, China, and the UK.
As long as there is a demand for cash, that possibility will most likely remain there.
While cash isn't disappearing entirely, data from Marqeta shows that both consumer attitudes and habits are shifting towards a less cash-dependent economy. According to Marqeta's 2024 State of Payments Report, nearly three-quarters of U.S. consumers aren't concerned about moving towards a cashless society.
Australia's Macquarie Bank is going fully cashless, with critics raising concerns about the resilience, privacy and security of digital-only transactions.
In the model of Gale and Yorulmazer, banks hoard liquidity to protect themselves against future liquidity shocks (precautionary motive) or to take advantage of potential sales (strategic motive).
Crime Prevention
If you're not carrying hundreds of dollars in cash, you're less of a target for robbery. And even if a thief does steal your credit cards or smartphone, most companies provide theft protection, ensuring you don't have to pay for anything a criminal purchases on your card or mobile wallet app.
Key features of a cashless society
Banks and financial institutions would operate almost entirely online. Branches would become even less common, with customer service shifting to virtual channels. Financial services, including loans, investments, and insurance, would be managed through digital platforms.
Q: What is the future of money? The future of money is expected to be heavily influenced by technology. Predictions include the rise of cashless societies, the growth of cryptocurrencies, the continued adoption of digital currencies, and the potential offering of a Central Bank Digital Currency (CBDC) by governments.
From paper to polymer banknotes
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.
Just: The Bible says absolutely nothing about predicting a cashless society, as some people claim. And in fact, if it did, the closest passage to anything that you could call a “cashless society” is not from the Book of Revelation, but it's from Isaiah, Chapter 55.
In 2023, Sweden will become the first cashless society in the world, with its economy going 100% digital. According to the Swedish Central Bank, already now, nearly 80% of the country's residents use cards for conducting purchases. Overall, 58 % of transactions use payment cards, and only 6% are made in cash.
Banks face fines if they fail to provide free access to cash withdrawals for consumers and businesses, the Treasury has confirmed.
It's a good idea to keep enough cash at home to cover two months' worth of basic necessities, some experts recommend. A locked, waterproof and fireproof safe can help protect your cash and other valuables from fire, flood or theft.
As a general rule, if you withdraw funds before age 59 ½, you'll trigger an IRS tax penalty of 10%. The good news is that there's a way to take your distributions a few years early without incurring this penalty. This is known as the rule of 55.
While this figure can vary based on factors such as location, family size, and lifestyle preferences, a common range for a good monthly salary is between $6,000 and $8,333 for individuals.
Ideally, you want to have 20% of your take-home pay left over after paying all of your bills.
It is recommended that you spend 30% of your monthly income on rent at maximum, and to consider all the factors involved in your budget, including additional rental costs like renters insurance or your initial security deposit.