Think long and hard about the last time you carried physical cash or a business asked for cash only as a payment.
While there are still some retailers today that have either a cash-only policy or still take cash, most consumers do not typically carry it on them.
Just three years ago, The Washington Post reported eight out of 10 people carried less than $50 in their wallets on a regular basis, according to research from Bankrate.com. Surprisingly, at this point in time, only one out of 10 Americans admitted to no longer carrying cash at all.
An astounding 62 percent of American adults surveyed in a Gallup poll this past year think the country has the possibility of becoming a cashless economy. The data also shared that 56 percent of millennials do not feel comfortable carrying cash in their wallet, which could be due to concerns of either spending it all too quickly or losing it.
While there hasn’t been a clear reason shared as to why carrying cash has been on the decline in recent years across all age groups, it may be safe to assume that people are either becoming more budget-conscious or mobile payment technology has lured in consumers.
This week, we reported on news that U.K. Finance is showing a significant jump in contactless payments. In the month of May, the finance company’s research showed there was an 18 percent increase in consumers shopping with contactless payment technology up from last year.
U.K. Finance’s Head of Cards, Richard Koch, commented on these findings and shared future projections for this trend. He said, “With one in three card payments now contactless, it is clear consumers value the speed and convenience of this way to pay. Card payments continue to grow at a faster pace than spending generally, a trend we predict is going to continue.”
Companies that offer up ways to pay without physical cash have been popping up more and more over the past decade. These mobile payment technology companies include the likes of PayPal, Venmo, LevelUp, Square, Google Wallet and more. With Apple Pay and Android Pay also taking a bite out of the online payment technology space, it’s looking more and more like cash will become obsolete.
In Q1, Apple Pay saw a 450 percent use increase, generating $7.04 billion, with the Apple App Store jumping 40 percent in the marketplace. Earlier this year, PayPal announced its plans to be folded up into Google’s Android Pay, while PayPal saw a revenue of $2.98 billion at the end of 2016 and processed $102 billion in payments.
Juniper Research’s data shows that Apple Pay, Android Pay and Samsung Pay alone will reach 300 million users by the end of 2017.
Just recently, credit card company Visa threw its hat into the cashless gauntlet with its news of extending its war on cash. In its new competition, the first 50 U.S. companies to go completely cashless will receive $10,000 from the credit card giant to convert their register systems to be cash free.
With all of the various ways that are offering up payment options that entirely remove cash from the equation, the possibility of becoming a cashless society is not coming completely out of left field. E-Commerce has undoubtedly been a contributing factor to the rise in contactless payments. As more people shop online rather than in a brick-and-mortar retail store, the rate of either credit card or mobile payments is likely to continue its upward trajectory.
Are online payments making cash obsolete?
Not yet, but we may not be too far off.