Roughly 10 percent of Americans don't carry any type of cash at all, and nearly 80 percent of shoppers keep less than $50 in their wallets — and why should they?
Thanks to credit cards and debit cards, there is no need to carry paper money. You can buy goods and services with a simple swipe of your plastic. This is why card-based transactions continue to soar while cash money is on the decline.
However, you still need a wallet to carry your plastic, right?
The rise of mobile payments has liberated American shoppers from billfolds and money-clips. Although near field communication (NFC) technology had a rocky start, the arrival of Apple Pay has revolutionized the world of retail shopping.
If you map current trends to their logical conclusion, isn’t it safe to assume that cash and wallets will eventually become obsolete?
When Will Cash and Wallets Go Extinct Permanently?
Although paper-based currencies are becoming less popular, they will likely stick around for the foreseeable future. Dollars and cents may become harder to use, but as with many obsolete technologies, there are enough stragglers to ensure demand doesn't disappear completely. Despite the growing popularity of mobile payment solutions, cash will always have a loyal following among:
- Elderly shoppers who simply aren't ready to change. This demographic will slowly get phased out, but it will take a while.
- Low-income shoppers, many of whom don't have smartphones or bank accounts. For them, cash is the easiest and most reliable option.
- Non-smartphone users and those who don't trust mobile payment options. You'd be surprised how many Americans still have "old school" cell phones.
- Criminals, terrorists and black market shoppers. Credit cards and mobile payments leave a paper trail. Cash is largely anonymous. However, Bitcoins could soon change all of this.
Wallets will also likely stick around for a while — even when they don't carry any paper money. That's because wallets offer a convenient way to store driver’s licenses, loyalty cards and family photos. Most modern smartphones can duplicate these core functions, but it will take some time for this practice to become 100 percent universal.
Still Think the Days of Cash Are Numbered?
Even if every person on the planet had a smartphone — and all black market activity stopped overnight — cash would still be here to stay.
Keep in mind the following:
- VHS technology has been replaced many times over (e.g. DVDs, BitTorrents, streaming). Yet, nearly 60 percent of American homes still have a VCR — and millions of blank VHS tapes are sold every year.
- People still send telegrams. Even with the advent of postal services, email and text messaging.
- There are those who still produce most of their own clothes and food. Apple Pay hasn't enjoyed much traction with the Amish.
Adjusting Your Payment Options to Meet the Needs of the Few?
In the coming years, fewer of your customers will use cash. The number will probably never reach 0 percent, but the general downward trend is unmistakable.
Though as a merchant, your focus shouldn't be on removing increasingly obsolete payment options from your business. Instead, it should be on expanding the number of ways customers can buy your products and services.
To learn how we can help, contact our payment support team today.