The End of Cash?
19% – Segment of the 2006 US Economy involving cash
Visa U.S.A Inc. recently conducted their annual consumer spending survey. Overall, respondents said that they prefer electronic transactions to traditional paper money and checks.
Visa’s chief economist Wayne Best said that 79% of baby boomers and 74% off echo boomers (the children of baby boomers) believe that the U.S. economy will be cash free as early as the next decade.
According to Best, during the past 10 years, check usage has declined from more than 1/2 of all monetary transactions to less than 1/4 today. Boomers will account for 46% of the 15 trillion U.S. economy in 2015. This is a huge percentage of consumers wanting to make the shift from cash to electronic.
Visa is recommending that retail operations aggressively review all cash-processing operations and shift to electronic exchanges. Best says that in 1996, 2% of adults used debit cards. Today, 75% of adults do. This is a radical shift and further backs up the Visa’s claims.
With that being said, I think we have to take these numbers and claims in context: All of the numbers are from Visa. Visa doesn’t make money on cash and it would of course be in their best interest to move all financial transactions from cash to electronic. Are their claims overstated, yes most likely; however, I do believe that people are moving to electronic transactions.
I know I am, it’s just easier. I use my debit card for most all purchases as I seldom carry cash with me. A debit card takes up less space, is easier to use and allows me to automatically track my expenditures using online banking. From a different perspective, it also has major environmental benefits causing a significant reduction in paper.
What do you think? Is cash on the way out? How would you feel without cash in the U.S Economy? Comment below with your thoughts or just contact me.