Wednesday, May 9, 2018

Our Dwindling Pile Of Cash

Photo credit: Annette Fischer

I hardly ever carry cash anymore. It's rare that I have more than $5 in my wallet and most the time, I don't have any bills at all. Just about everyplace accepts credit cards now. Thanks to mobile phones and services like Square, even places that used to be cash-only, such as farmer's markets, can now accept cards.

I'm fine with this. Cards are much more convenient. I also can earn points or cash back on more purchases. But it wasn't until the last time I took a trip to Las Vegas that it struck me just how common the lack of cash has become.

My Credit Union Doesn't Deal With Cash

OK, that's a bit of an exaggeration. I can still deposit cash at any ATM, but when I was planning my last trip to Vegas, I needed to visit a branch to withdraw our gambling money, an amount larger than I can withdraw at an ATM. I also wanted $100 bills, so I needed to see a teller.

My credit union has 56 locations in Washington state. Do you know how many have tellers that can accept and dispense cash?


All the other branches are "neighborhood financial centers." You can do everything there that you would expect - open an account, apply for loans, transfer money from one account to another, or get a cashier's check. But the one thing you cannot do is withdraw cash. Even when you open an account, you do all the paperwork and then make the initial deposit at an ATM.

Cash seems to be going away.

The Swedish Experiment

For a government, printing currency is expensive. Bills wear out and need to be replaced. Coins are heavy and people don't like using them. As more anti-counterfeiting measures are incorporated, costs rise. On the other hand, the government has a responsibility to provide currency that its citizens can use to conduct commerce.

In Sweden, businesses have slowly been shifting away from cash and towards card-only payment methods (including phone payments) in recent years. Banks too, are joining this trend. Like my credit union, there are banks in Sweden that only deal with cash at a few locations.

Surprisingly, this trend away from cash is not driven by the government, but by consumers. Speaking about the effort to support cash, Swedish bank customer Viktor Sjoberg said "There's no need to keep an infrastructure alive if no-one uses it."

To be fair, there are concerns that not everyone will be able to function in a cashless society. There are concerns that many, especially the elderly, might not be able to use or be comfortable using cashless payment methods. It does seem, at least at this point, that Sweden may be an outlier here. On the other hand, they could just be the start of a trend. I think it's too soon to tell.

Will The U.S. Ever Go Cashless?

Probably not. In fact, I don't think any society will ever be completely cashless. There are simply too many people that don't have access to the things a cashless society needs - a bank account and a debit or credit card -  for cash to completely disappear. Plus, there are privacy concerns that arise when every single transaction can be traced. But I do think we will see cash become less and less common. Soon, it will be the exception rather than the norm.

The decline of cash won't be a government conspiracy to track everyone's spending, as I'm sure many conspiracy theorists will claim. Rather, just as is happening in Sweden, it will be consumers' behavior that reduces cash's place in our day to day lives.

What are your thoughts?


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