The Resilience of Cash in a Digital World

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Cash Is King

Cashless proponents have sounded the death knell for cash for at least two decades, but their predictions have been premature. To be sure, digital forms of payment have received a boost in recent years but have not succeeded in completely displacing coins and paper money. It’s unlikely cash will be entirely displaced anytime soon – if ever.

The need for legal tender remains high in a variety of settings, including small retail shops, convenience stores and environments where tipping is common. Cash has proven resilient despite threats over the years from a variety of alternatives, including credit and debit cards, online payment systems and digital wallets.

High volumes of coins and bills remain in circulation around the world. In the United States, cash circulation is higher than ever. The U.S. is hardly alone, according to banking services organization BIS, which says most countries have seen higher cash in circulation since 2000. BIS, which works with 60 central banks, says “demand for cash rose in most advanced economies after the 2008 global financial crisis.”

It still means something to have cash in your pocket. In fact, most small retailers prefer it that way. “Cash is king. When you pay with cash, businesses know that the transaction is complete, and there’s minimal risk of future complications,” a recent article in The Balance explained.


The Current State of Cash

With all the digital currencies and forms of payment now available, it’s understandable that the notion of a cashless society has gained traction since the 1990s, when the computerization of manual processes got into full swing. The popularity of smartphones in recent years helped fuel an
explosion of digital wallets, giving consumers alternatives to cash and payment cards when making purchases. An increasing number of retailers have adopted these digital forms of payment out of convenience.

Still, cash remains the most frequent form of payment in the U.S. as of 2018, accounting for 30% of all transactions and 55% of purchases under
$10, according to the Federal Reserve’s Diary of Consumer Payment Choice (DCPC). “Because the majority of reported transactions were below $25 in value, cash was the most used instrument overall,” the DCPC said. Paying with bills and coins remains commonplace at convenience stores, gas stations, fast food restaurants, outdoor markets, laundromats, food trucks and vending machines. Cash accounts for almost half (41%) of fast food purchases and a third of transactions (33%) at convenience stores, according to IHL.


Download the full white paper to learn more about why cash has been so resilient despite the ever-growing digital age.


The Resilience of Cash in a Digital World White Paper