Money first began to replace the long-outdated barter system over 10,000 years ago. Not too long ago – relatively speaking – the credit card was invented; The Diners Club Card, the name of the world’s first credit card – was created by Frank McNamara in 1950. Just one year later, more than 20,000 Americans owned and used The Diners Club Card.
As of April 2018, 364 million lines of credit were active in the United States alone. Statistics from the Boston Federal Reserve indicate that just over three-quarters of all American consumers had at least one open line of credit.
Over time, plastic has certainly become a more popular method of transferring funds. The trend is set to continue indefinitely. Many financial services industry experts believe that smartphones and other electronic devices will one day replace debit and credit cards as the main mode of payments for commercial activity.
The world is moving towards a fully-digital commercial landscape – or is it?
Many sources across the Internet, televised media outlets, and social media have shared sentiments about cash as a method of payment dying out of style.
The most recent annual edition of the consumer-related study “Diary of Consumer Payment Choice” found that cash is used more frequently than any other method of payment by consumers at 31 percent, nearly totaling one-third of all transactions in the United States.
Debit cards and credit cards were used in 27 and 18 percent of transactions, respectively.
Believe it or not, despite cash being used as payment so frequently, some businesses have gone cashless.
Here’s the real question – should your business think about getting rid of cash payments?
Credit and debit cards charge fees for using them. Paying with cash, conversely, comes along with zero fees. Goods and services sold by cash-phobic businesses cost more than their competitors – on average, at least – because the aforementioned fees are absorbed into their prices.
Roughly one-fifth of Americans don’t subscribe to financial services offered by traditional financial institutions. This means approximately one-fifth of the United States’ population doesn’t have a credit or debit card. Turning away these customers simply doesn’t make sense.
Going cashless can’t make sense to business owners interested in maintaining the welfare of their consumers; leaving the under-banked behind it literally shooing away customers.