The concept of cash is always going to be an important part of the economy. After all, actually having money on hand to use in payment is always welcome. However, the physical aspect of cash may have its days numbered, as more and more emphasis is put on the digital equivalent, rather than printed paper and metal coins.
One of the biggest reasons that traditional, physical cash is losing popularity as a form of payment is that it is less reliable and efficient than modern forms of payment processing. A corner store, for example, can be robbed, and the cash emptied out from the cash register. However, a vendor that has the cash safely stored away in the bank because of digital transactions can’t be robbed.
In the same way, cash can also be used for crime. Money laundering, for example, is the act of taking cash acquired through illegal means, such as robbery or drug dealing, and reintroducing it into the economy through various means to make it “clean” and untraceable. Cash is easier to launder in this way than digital transactions, which leave an electronic “footprint” that can be followed back to the source.
But perhaps the biggest factor in the rise of credit cards and digital transactions as popular forms of payment processing is that they are flexible. If you use a phone with a link to your bank account, or credit card, you can buy a product in any country without needing to have the local currency on hand first. With credit cards and other forms of payment processing, you can shop online, buying whatever you like from any vendor in the world, something that’s not possible with cash.
We still use physical cash in many day to day activities, but the frequency of that use is dropping. By the end of this century, we will still heavily rely on money, but it may not be in physical cash form any longer.
Posted in Payment Processing on Dec 13, 2016