Will cash die out? (2024)

FAQs

Will cash disappear completely? ›

New data reveals Australia has lost around half of its ATMs since 2017.

Cash use has been declining for years, but cash isn't close to going away. In 2022, there were a staggering 70 billion cash transactions, making it the third-most-common payment method.

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.

The downsides of going cashless include less privacy, greater exposure to hacking, technological dependency, magnifying economic inequality, and more. Credit and debit cards, electronic payment apps, mobile payment services, and virtual currencies in use today could pave the way to a fully cashless society.

The US is moving toward cashless payments, with a substantial increase in the use of mobile wallet apps and contactless cards. A report from the Federal Reserve Bank of San Francisco found that payments made using cash accounted for just 18% of all US payments in 2022.

Physical currency isn't becoming obsolete any time soon, so it's important to weigh up your options before deciding to go fully cashless in 2024. Ensuring you can accept some cashless payments though, is essential to keeping with today's trends and customer expectations.

Nope. We might use less cash, but our society still has a long way to go before it's totally and completely cashless. And just because some stores didn't want to accept dollar bills for a while (and maybe still don't), that doesn't mean a cashless society is here to stay.

“China is one of the top countries for using cashless payment systems, but penetration is not 100%,” says Sara Hsu, an associate professor at the University of Tennessee, specialising in supply chain management. “Elderly Chinese still often prefer to pay with cash and some struggle with using mobile payments.”

Demand for the U.S. dollar is also high because it is the world's most prevalent reserve currency; many nations hold large reserves of the dollar. For these reasons, among many others, the likelihood of the U.S. dollar collapsing is zero.

Sweden, the first European country to introduce banknotes in 1661, became the world's first cashless society on 24 March 2023. Finland and the UK are top–ranked to become cashless societies as well. Poland, on the other hand, has scrapped plans to limit cash payments to ensure freedom of choice.

Should I still keep cash? ›

Reasons people keep cash at home include emergency preparedness, financial privacy concerns and mistrust of banks. It's a good idea to keep enough cash at home to cover two months' worth of basic necessities, some experts recommend.

Will CBDC Replace Cash? Many countries are researching and developing CBDC programs. Developed nations have already begun transitioning away from physical cash, so it's not unrealistic to believe that CBDCs will soon replace it.

People with low income or debt tend to find cash easier to manage too. Another potential disadvantage concerns security. Although abandoning cash helps to reduce theft and fraud, for many consumers, data and cybersecurity issues are a worry — with justification.

A total of 424 bank branches - or 11 per cent of Australia's overall branches - closed in the 12 months to June 2023, Australian Prudential Regulation Authority data found. A further 718 ATMs were closed or removed. The Big Four banks - Commonwealth, Westpac, ANZ and NAB - have all ruled out going cashless.

It may even be as unequal as it's ever been. My worry is that a cashless society may exacerbate inequality even further. It will hand yet more power to the financial sector in that banks and related fintech companies will oversee all transactions.

If it's been a long time since you pulled out actual dollars and coins to pay for something — here's a conversation for you. It might seem like cash is slowly becoming obsolete. But, Brett Scott says it's a false narrative that we're all pining for a cashless society.

When money becomes less valuable, it's usually due to inflation. Inflation is when the price of things goes up over time which in turn, makes the value of money go down over time. Inflation or the rate of inflation is expressed as a percentage.

Analysis from Barclays Investment Bank, meanwhile, predicts that the global transition from cash to digital payments would reach a tipping point moment in 2025, when absolute cash usage would decline from 41 per cent in 2019 to 20 per cent by 2030.

Central banks routinely collect and destroy worn-out coins and banknotes in exchange for new ones. This does not affect the money supply, and is done to maintain a healthy population of usable currency. The practice raises an interesting possibility.