Technology is continuously growing, expanding, and evolving, and with it, so is our world as we know it. Virtually no part of our daily lives has been left untouched by the effects of technology, not even the way we purchase products and services. Even though money has been around for a long time, approximately 100,000 years, people have been predicting its extinction for nearly 60 years now, with technology as the catalyst.
First there was the rise of credit cards and debit cards. Then, electronic payment options and wallets came into the picture, like PayPal, electronic cheques, Interac e-transfers, and Google Wallet. You can even pay with cryptocurrencies like Bitcoin now. With advancements of technology, the death knells for cash only got louder.
However, it might be too premature to predict the disappearance of physical bank notes and coins in our lives just yet.
Physical Money Is the Top Payment Option
Even though we have a wider variety of payment options to choose from, and many of us do use a mix of many different methods of payments, the fact is cash is still the top way to pay in 2016.
In fact, even Millennials who are known as tech junkies and grew up with contactless and electronic payment methods and know how to use them still prefer to pay and get paid with physical money the majority of the time.
The Benefits of Using Cash
Money in circulation is actually growing, not diminishing. In the US alone, it’s grown in circulation by 42% between 2007 and 2012. There are clear reasons for this trend.
Physical money is untraceable, which makes people more comfortable to use it—their parents, their spouses, their banks, and even the government can’t track their spending when they use bills and coins.
Physical money is also widely accepted, whereas other electronic payment options, especially the relatively new ones, aren’t accepted at all retailers, especially at small businesses. Physical money is a universal way to pay and get paid.
Cash is also more reliable. You don’t have to worry about power outages or blips in the electronic systems affecting your ability to pay for anything.
In addition, money allows for finality of payment. You hand the cashier the money, she hands you your goods, and the transaction is over. There’s no waiting for funds to clear, no waiting to pay off your balance later on.
Many people, especially older persons, aren’t comfortable with technology enough to use electronic payment methods. They might not know how to sign up or process the funds or they might be too worried about cyber-attacks and online fraud to feel safe using electronic methods of payments. There’s a reason some people don’t trust banks and hide their cash under their mattresses instead, after all.
Finally, physical money can also help people control their spending. Studies show that people spend more when using cards than physical money because of a lack of accountability. People feel, irrationally perhaps, that if they have physical money, they own it more and are thus more responsible with it.
Cash Isn’t Going Away Just Yet
Though there are certainly alternative systems of payment available today, none offer the convenience, reliability, and anonymity that physical money offers, which is why it’s still a very popular payment method today. Is it soon to be a thing of the past? Doubtful. People just aren’t ready yet to part with their bills and coins completely, even if they do use other payment methods as well. And until there is sufficient, reliable, and universal alternatives in place, cash isn’t going to go anywhere. It seems the reports of a looming death might have been exaggerated over the years.