In recent years as more digital methods of payment have gained in popularity, there has been discussion and speculation about whether cash as a medium of currency and payment is beginning to die a slow death. For years, the adage cash is king was paramount, but now many digital options are poised to overshadow this traditional currency.

I’ll never forget going to a coffee shop a few months ago and the cashier did not accept my dimes. The store wanted nothing to do with change that was smaller than a quarter. I couldn’t believe it. In my personal finance brain, money is money. But apparently not everyone thinks that way.

While people may think that cash is obsolete and should be phased out of use anyways, plenty of others take up the opposing side, stating that cash is still critically important to a healthy economy and that removing it would be a terrible idea. And pretty much a cashless society would be the demise of the vice economy. While both sides have some good arguments and some bad arguments, the fact is that cash isn’t going anywhere any time soon. Hard currency has been a part of human history for centuries, though the modern variation of paper bills and coins not backed by any gold or silver is a much more recent development. Let’s take a look at some fun money facts.

Common Payment Types and How Often They’re Used

There are a number of different methods that people commonly use to purchase goods. The methods you’re most likely to see include credit cards, debit cards, checks, and cash. But while those four have been the dominant methods for years now, newer methods like digital wallets and contactless payment cards have begun to slowly grow in market share.

According to the Federal Reserve Bank of San Francisco, payment by check is the method that has fallen out of favor the most as debit and credit cards pick up the slack. Cash, on the other hand, is still widely used in a number of different situations, even if cash only accounts for 14 percent of total consumer transactions based on value. Some of those particular situations where cash is king include transactions under ten dollars, where cash is used in 66 percent of transactions. Additionally, cash is used in 40 percent of retail transactions with debit cards used in 25 percent and credit cards at 17 percent. The final 18 percent is split with checks and electronic payments taking seven each, and other payments claiming the remainder.

While cash is still a major player in the realm of going to the store to buy stuff, the growing popularity of eCommerce and shopping online is beginning to have an effect on people’s outlook on cash. This is even more pronounced as more business fields are beginning to refuse accepting cash as a payment. According to The Huffington Post, airlines no longer accept cash for in-flight purchases, which I know is true of American Airlines.

Problems with Cash

While cash is still a major player in the payment method game in some areas, the overall trend is towards alternative purchase methods. There are other problems with cash that aren’t normally discussed that may be starting to have an effect on how consumers react to it. According to TransferWise, a study by Tufts University discovered that the cost of dealing in cash to the US alone sits at close to $200 billion. It literally costs the US government around $637 per person for cash to be available for use. That’s a decent chunk of change. These costs come from a couple of places, including the transportation and collection services required to deal with cash.

Additionally, cash can be very dirty, which makes OCD people like me cringe. According to ABC News, the Wright Patterson Medical Center conducted a small study examining the cleanliness of $1 bills. They found that a massive 87 percent of the bills they looked at had potentially harmful bacteria on them — and who knows what else! Of the 68 single bills they collected from customers in a grocery store checkout line, the researchers only found four they considered relatively clean.

Will Cash Disappear Soon?

Truthfully, that question is difficult to answer. Cash will remain an important part of economies around the world for some time yet, but futurists have been predicting the fall of cash for years now. While cash is still a major player in the payments game, its use has been steadily declining for a number of years.

Cash isn’t gone yet, and it’s not likely to go away completely any time soon, but it’s no longer king of the monetary castle.

What Does This Mean for You and Your Business?

Realistically, these trends shouldn’t really have any effect on your business, unless you choose to not accept a particular payment type. While some businesses no longer accept cash, that doesn’t mean you should stop taking money in return for your stuff as well.

If you start denying cash payments, you will most likely see some detrimental effects to your bottom line. They may not have a huge impact, but they will be there. The best bet for moving forward with your business is to continue accepting cash along with all other payment types while keeping an eye on what’s happening in the payment method world. Plus, having a cash drawer, like what eCommerce vendors like Shopify offer, can come in handy down the line.

You never know when you will need two one dollar bills — like when you really want some coffee and the only thing nearby is a street vendor. I promise you, that two dollars will be a lifesaver!


Melanie is a freelance writer currently living in Portland, Oregon. She is passionate about education, financial literacy, and empowering people to take control of their finances. She writes about breaking up with debt, freelancing, and side hustle adventures at

Currently she puts more than 50% of her income towards debt, while living a frugal, fun life. In addition to her love of personal finance, art and music, she is also a karaoke master. Follow the adventure @DearDebtBlog.

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8 responses to “Are We Becoming a Cashless Society?”

  1. Tony Rapleya says:

    Woah Melanie. What an awesome piece! Here I am getting upset that my local bodega doesn’t take cards. I can’t imagine cash being obsolete. Explaining to my kids what a dollar bill was lol it seems so foreign but I had no idea that it cost so much to make money available. I could understand why the government would want to move to a cashless society, but then again, what would they do with all of the retained money. Definitely not use it for good lol.
    Tony Rapleya recently posted…What Do You Value?My Profile

  2. I wonder how a cashless society will affect the black market economy that rely on no-trail cash transactions. If money is dealt electronically and therefore recognized, how can these types of business survive? In no way am I supporting them but the reality is that many countries rely on these type of arrangements to sustain their economy so going cashless would work against their agenda.

    Getting a bit deep here haha but would love to hear your thoughts!
    Christine @ The Wallet Diet recently posted…Eating Well on a Budget | Q&A with Danielle Zies, Holistic NutritionistMy Profile

    • Melanie says:

      Wow, you are so right! I immediately thought of the vice economy, but not black market kind of stuff. I know there is so much cash flowing in that economy and a cashless society would be truly crippling for them! Thanks for your thought provoking comment, Christine.

  3. Nicole says:

    Don’t get me wrong, I’ve always hated carrying cash…but I don’t like the idea of cash becoming obsolete. There are usually small fees for business owners when they complete a transaction with a credit or debit card. Plus, how will I score great deals at yard sales?! I’ve also had my credit card number compromised twice, and keep hearing about places that I’ve used my card having security breaches. I use my debit card all the time, but rarely think about how someone could basically track my every movement with each swipe of the card. Now I want a CARD-less society, ha!
    Nicole recently posted…A Very Crafty ChristmasMy Profile

    • Melanie says:

      Cash really does support small and local businesses! I have also had my card compromised twice and it’s no fun! I just want a world where cash and cards can co-exist harmoniously 🙂

  4. Jenny says:

    I really enjoyed reading your post. So much that I started googling ‘no cash society’ and I found some interesting reads, especially this one about Sweden and them moving to a cash-free society:

    Personally I would not want to loose cash as I try to pay by cash as much as I can. And hey you would never again have the chance to find a dollar bill on the ground anymore haha

    • Melanie says:

      Thanks for stopping by, Jenny! I think it’s really interesting too, the direction we are headed. I’ll check out that article. And yes, I also wouldn’t want to lose the ability to find random money on the street, or to be able to GIVE random people money on the street.

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