NEW YORK (MainStreet) – A new forecast projects that Americans’ use of cash will continue to decline during the next four years, but puts to rest the notion of a cashless society.
The report, conducted by research and advisory firm Aite Group, draws on two studies to project that cash use by consumers will decline by 17% between 2010 and 2015. The report’s authors were dismissive of the popular notion that we’re hurtling toward a society that conducts all transactions electronically.
“Developed economies around the world – especially the United States – appear nowhere close to becoming cashless,” writes analyst Ron Shevlin in the report’s introduction. “Based on our forecast, Aite Group sees no cashless society in the foreseeable future.”
Indeed, despite the convenience of credit cards and other electronic forms of payment, 62% of respondents said they would rather pay cash or write a check than use a credit card. And cash remains by far the most popular vehicle for person-to-person payments, with 51% of all P2P transactions conducted with cash. (Still, the report projects that use of cash for this purpose will steadily decline as technology for mobile payments becomes more common, especially given that the P2P category is dominated by transactions between family members.)
While a steady decline of 4% per year seems significant, it’s worth noting that consumers’ use of cash currently stands at $1.2 trillion per year, according to the report. That means it would take almost 200 years for cash usage to fall below $1 billion annually if the current rate of decline continues. In other words, America isn’t going to stop using greenbacks any time soon.
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