Why We Still Need Cash (2024)

Speculation about a coming #cashlesssociety is back in the news as mobile payments skyrocket in the aftermath of COVID. Though hotly debated, some industry experts believe that ATMs - a keystone of how many of us get cash in the first place - will be gone in 25 years.

We've been here before. Every time a new method of payment has come out in the past 60 years, there has been a wave of interest in and predictions about the death of cash.

This report from Google Ngram, which scrawls print publications, shows how the term "cashless society" spiked in usage with each #fintech wave.

Thus, there is a good chance that today's predictions of coming cashlessness may also be premature.

Still, there can be little denying that cash is dying a slow death in the developed world. Some stores don't accept it. Many entertainment venues don't. And of course all e-commerce is done cashless.

Why shouldn't we just go cashless? Here are five reasons why I believe we need cash.

1. In the U.S., our currency says cash is legal tender. Granted, there has never been a law binding private businesses or individuals to accept cash payments. But the verbiage on American currency makes the intention clear: "this note is legal tender for all debts, public and private." Unless that text is removed or modified, not accepting cash is hypocritical and goes against what our nation's money symbolizes.
2. If cash disappears, it is harder to teach children about money. It's unlikely you will give a child a credit or debit card or a mobile payment app to play around with. In fact, it may not be legal to do so. But children can start learning about cash at an early age. And that not only improves #financialliteracy, but also #stemskills, since mathematics and counting change goes hand in hand. Children can learn the importance of work through an allowance, too.
3. In an emergency, we need cash. Our society's move toward electric everything has a downside. What if the electrical grid fails? We've already seen the concern with home heating systems and automobiles. Similarly, if the only forms of payment we have are electronic, what happens in a power outage? Such as after a natural disaster? We'd be reduced to an even simpler system or bartering.
4. Cash preserves human cultures and history. The U.S. and almost all other nations use their currencies as a way to communicate what is important or special about their countries. The likenesses of famous leaders, local wildlife or monuments often adorn dollars and cents. And this in turn memorializes what is special about a nation and helps forge a collective identity, as well as communicates a nation's history to those who might not be interested in book learning. In a cashless society, this would all be lost.
5. Cash is private and secure. In a free society, we all deserve a certain level of privacy. And cash provides that. This privacy also brings greater security in certain cases, since you might not want to give a credit card or share mobile payment info with an unknown small business or individual you're doing business with. But cash provides a good anonymous method of payment, thus keeping exchange going.

If you agree with my viewpoint about the importance of cash, what can you do to make a difference?

First, make more of your purchases in cash. The more cash is used, the less likely it is to go out of circulation.

Second, don't shop at physical stores or establishments that don't accept cash. If more people boycott cashless stores, it will make companies rethink their policies. Of course, it only makes sense that a company would want to accept all methods of payment. But as long as cash is legal tender, stores really should accept it. And we can penalize those that don't be not giving them our business.

Third, let your voice be heard on a local, state or federal level. Many communities are considering laws requiring shops to accept cash, out of concern that cashlessness hurts those with lower incomes.

Supporters of paper and coin currency might in the end be fighting a losing battle. But it is a battle worth fighting - and one we can win in our lifetimes.