It is evident that virtually every country in the world will see a decline in cash usage. This is not all that surprising, as cash is one of the least efficient ways to transfer value. Digital payments, plastic cards, and other tools add more convenience, yet put more power into the hands of the banks. New research indicates that the US may soon consider getting rid of large denomination banknotes.
One In Four Cash Transactions In The US By 2026
The new research conducted by Paul Hastings and the Center for Economics & Business Research predicts a future most people have already envisioned. The United States, similarly to other countries, is seeing a significant decline in cash transactions. At the same time, the country is still home to lots of check usage, with cash usage being less high, compared to other developed regions.
But that does not mean there will be more cash usage in the future. In fact, it appears that far fewer people will use cash as time progresses, indicating an increase in electronic payments usage. Right now more than six in ten US transactions happen electronically, a number that will increase to 76% by 2026.
This trend is not unique to the United States, though. The same research indicates that a similar pattern will occur in the United Kingdom, where digital payments have been far more popular than cash for years now. None of these factors suggest that either country will go entirely cashless anytime soon, which is a positive development.
Contactless payments are touted as the driving factor behind the growing digital payment revolution. As of 2016, 38 million contactless payments have occurred in the US. That number is expected to increase to 221 million by 2026. This is quite a spectacular prediction, but this increase is not necessarily impossible to achieve.
Digital wallets, which are often seen as a competitor to other forms of digital payments, are not seeing much success so far. Instead, they only account for 6-7% of all transactions, even though that number will go up over time as well. But consumers seem to indicate that they find the usage of apps rather irrelevant, particularly when it comes to switching accounts. That also points out why bitcoin is such a great alternative, as this one account does everything.
With the declining cash trend, the conversation ultimately turns towards whether or not large denomination bank notes should be removed. Australia, India, and Venezuela are doing so already, although they allegedly are doing it to get rid of the shadow economy. It is not unlikely that the US will try to get rid of large bills in the future, although that has not yet been confirmed.
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