Citizens of Denmark make about 90 percent of their payments with credit cards or e-wallets, according to USA Today. And a 2016 TSYS survey showed that most Americans prefer to use credit and debit cards over cash. What does this mean?
Why Cryptocurrency Will Succeed
First, the electronic payment industry in America will be going gangbusters as we catch up with Denmark. Second, being in the electronic payment industry will prove very profitable over the next decade. Third, I believe digital currency — or cryptocurrency — will replace physical currency altogether. Let’s explore why.
Denmark, Norway, and Sweden are all leading the charge against physical currency. In Sweden, you can even use a card to buy newspapers from homeless people. These countries are doing it because it’s cheaper to handle and process digital currency. It also provides greater security and a drop in attempts to steal cash.
The United Nations and the Bill and Melinda Gates Foundation want societies to forego cash for similar reasons.
On a consumer level, who likes to carry around cash? It’s dirty (very dirty), tangible (meaning it can be misplaced and gone forever), and bulky. Plus, it provides zero ability to track payments and it can’t be used online.
However, I will say that some people really enjoy the envelope budgeting method. It’s a method wherein you keep envelopes filled with cash for each spending category. Once the cash is gone, you don’t get more. It helps some people keep from overspending. Visualizing money can be very powerful. Nonetheless, cash generally isn’t too popular anymore.
Do you know what’s also becoming a thing of the past? Cards. Credit cards, debit cards, greeting cards . . .
There are many wholly electronic ways to send and receive cash today without using them.
The Different Ways to Send and Receive Money
Sending and receiving money can be done a number of convenient, electronic ways. Mobile wallets, for instance, are becoming popular. These are financial apps used for buying things in stores. Popular ones include Google Wallet, Apple Pay, Lemon Wallet, Square Wallet, and Isis (I’m sure it’s wonderful day for their marketing departments right now).
Carrier billing is also becoming a dynamic way to pay. It’s what you used to use ages ago to buy ringtones and wallpapers. You simply charge your electronic purchases to your phone account and then pay the bill at the end of the month. Now carriers are allowing people to charge a large variety of things, including goods on e-commerce sites and apps.
Peer-to-peer services like PayPal, Venmo, and Popmoney are gaining steam thanks to smartphones. Peer-to-peer services take the place of cash for transactions like splitting a dinner bill or having your friend reimburse you for the box of Girl Scout cookies that were hungrily bought with an IOU. But let’s stop for a second.
Will Cryptocurrency Replace Cash?
Will we end up using traditional currency or cryptocurrencies like bitcoin, litcoin, and ethereum?
More than 82,000 merchants already accept bitcoin. But while many companies like Overstock and CheapAir accept cryptocurrencies, the concept is still in its infancy.
Global usage of digital currency was just $50 million per day in 2014. Visa and MasterCard processed $32 billion per day. Whether traditional currency or cryptocurrency takes over, your payments will likely be sent in binary.
What Would a Cashless Society Look Like?
Getting your face on a U.S. bill probably won’t be as meaningful. Kids will see a stack of dollar bills representing money on a smartphone app and be a little puzzled.
You won’t find loose change around parking meters. Cars will no longer have coin slots in their center consoles. Pockets will no longer jingle. Kids won’t understand the line in Home Alone where Macaulay Culkin mouths the words, “Keep the change, you filthy animal.”
Some tech news outlets are even predicting crazier ways to pay than with a phone. And there are many hardware alternatives, too.
Some companies are testing pills you can swallow that will store things like your Social Security number, medical records, and banking information. Other companies are testing microchips that can be implanted in your hand so that you’ll never be without money.
Who knows what the future holds? But it seems obvious that physical currency is becoming a thing of the past, whether we like it or not. Even Dave Ramsey — creator of the famous envelope budgeting method — has a budgeting app now. The times, they are a-changin'.