I’m in line at the bank. Just mingling with my generation, not to mention a few painters, landscapers, and other service providers.
Stop rolling your eyes.
No need to cite the headlines. “Cash will be obsolete by 2030.” Venmo, Apple Pay, and countless similar services will spell the end of coins and paper currency. Then again, cryptocurrencies may be what finally vanquishes King Cash. Whatever the cause, experts agree on the effect.
These sources will cite that over 40% of Americans no longer make cash purchases, up from under 25% just eight years ago. A trend that is expected to continue. Who’s arguing? Heck, there’s even a Bitcoin ATM at my local bagel shop. Really.
I agree that cash use will diminish, markedly. But obsolescence? I’m not buying it.
Weather-related disasters, like tornados or hurricanes, cause power outages that prevent people from making electronic transactions. Such calamities are expected to be more frequent/powerful in the future. And such catastrophic events are not the only problem. According to Forbes.com, “Electric shortages have become more acute; brownouts and blackouts have become common. Look deeper and it becomes clear that the nation’s power grid has not only become less reliable but also more fragile.” Paper money is a sensible backup.
Also, a sound argument can be made that the Federal Reserve should facilitate choices of payment. Give the people what they want. And guess what? Cash is the payment-form-of-choice for the informal economy. The size of the US informal economy is estimated to be about $1.7T. Hard to ignore.
So, let the people have their cash. Without the pennies, of course. Talk about obsolete!
Peter has spent the past twenty-plus years as an acting/consulting CFO for a number of small businesses in a wide range of industries. Peter’s prior experience is that of a serial entrepreneur, managing various start-up and turnaround projects. He is a co-founder of Keurig.
