A Finextra member 11 October, 2013, 15:16 0 likes

I completely agree with Jay. Paper and coin money will continue to go down as a percentage of use to electronic and plastic  methods, but it is NOT going away.

Donald Chapman - DNC Consulting - Boston 11 October, 2013, 18:55 0 likes

I do pretty much only carry a credit card around with me - barely holding cash except for an emergency $20 bill... Therefore his view gives me confidence in the future of mobile money - if mobile becomes half as successful as cards have, then us Money2020 attendees should be well off!... Great article.

David Birch - Tomorrow's Transactions - London 12 October, 2013, 01:03 0 likes

1972? Here I found an article in the New Scientist in 1963 forecasting a cashless economy by 1983

http://www.chyp.com/media/blog-entry/1995-and-all-that

A Finextra member 12 October, 2013, 08:33 0 likes

Hundreds of years ago, we bought our goods at market stalls and small stores. Then High Streets emerged followed by supermarkets, malls and countless other retail concepts. Meanwhile in USA, rail roads were installed and catalogue retailing took off, followed by phone based mail order and of course the miriad of retailing options offered by the internet.

All these mass channels still exist - it's only the mix that changes. And channels with a large infrastructure behind them tend to survive.  History shows cash is here to stay for a very very long time.

A Finextra member 12 October, 2013, 09:29 0 likes

Predictions about the demise of cash come and go.  We can surmise that most of these are premature.  That yellowing newspaper clipping in ‘The
Fresno Bee’ from the 1970s predicting the end of cash with the rise of Credit Card and ATM use, is a case in point.   

It is my considered position that a cashless society is unstoppable.
It will be a convergence of the internet, credit and debit cards that have Visa PayWave, MasterCard PayPass, American Express cards that have ExpressPay, and a smart phone that can be used in much the same way as a physical wallet is used, only with virtual examples of all of your plastic cards with the same contactless capabilities.

It is a combination of these developments that will eventually consign cash to history, after a considerable amount of debate. Not only will our smart phones contain every debit and credit card we own, they will also have all of our discount vouchers and purchase receipts in digital form. As a result, there will not be any need to carry any more bits of paper in our wallets, or notes and coins for that matter. 

I am quite confident that we are on the verge of a tipping point regarding the eventual elimination of cash from our economy. As long as there is a national regime of privacy legislation, the security and integrity of the internet is assured, powerful institutions such as state and federal governments will obtain taxes in full in future. This will help to fund our treasury and help to pay for the nation’s community infrastructure, the
operation of federal and state departments, all government projects, and future policy developments. In addition, governments will not have to bear the cost of printing, manufacturing, storing, and transporting cash.

We will have a de facto cashless society first, where a majority of transactions will be done without cash, both in numbers of transactions and in the quantity of money involved. We will probably have a de facto cashless society in about 10 years’ time. After a period of a further 30 to 50 years, or somewhere thereabouts, cash will be eliminated from our economy after the nation has had a plethora of free and wide-ranging debates about this issue. However, I am not hung-up on predicting when this will happen because it may happen in 100 or more years from today.

Banks will want a cashless society simply because you cannot
rob a cashless bank with guns at the ready.  The other reason relates to cost cutting.  There will no long be a requirement to physically count, secure, or transport it any longer.  Banks will be reconfigured to be without tellers, but will be available to negotiate a mortgage, to organise large transfers of money, either within the country or internationally and for potential investment advice.  In this age of smart phone technology, it makes little sense for any bank to have the current numbers of bank branches that serve our population going forward. 

The police and intelligence services will favour a cashless society as an easier context within which to detect criminals and terrorists.  Not only will they be able to do this with greater ease, they will no longer have to solve cash robberies of the type we currently experience throughout the world on a daily basis.  Cash robberies are potentially violent and often involve the illegal use of a weapon.  The crime of counterfeiting will be consigned to the history texts of future students. 

Crime will not suddenly disappear as a result of having introduced a cashless economy.  Everybody knows that crime is forever and will continue in a cashless society with computer crime, identity theft, fraud and deception.  The advantage here is that violence is taken out of the equation in a cashless society. 

The important thing to be cognisant about the eventual evolution to a cashless environment is that it will not happen overnight.  We are talking of a generational change that children born today will most likely see in their future societies.  The children and the very young of today will
be the drivers of a cashless society simply because they will overwhelmingly choose it through their take-up and use of smart phones with digital wallets. 

Taking cash out of any economy will not be done against the majority of people who insist that cash remains.  Only after the ‘penny drops’ for the vast majority of people, who are genuinely convinced of the advantages in removing cash, will we see the advent of such a significant shift to daily life.  The removal of physical cash will be a very slow process involving rigorous planning and national debate.  It is akin to a lingering, ultra slow death of a thousand cuts.

http://www.youtube.com/watch?v=jxjlwu5xOAY 

Jan-Olof Brunila - Swedbank - Stockholm 14 October, 2013, 08:43 0 likes

Dear Sirs,

In Sweden the banks have for the last 20 years invested in expanding  card payments to all areas of society. Today more than 97 % of adults above 18 yeas hold at least one Visa or MasterCard debit card, many also have credit cards. Welfare pay-outs are done with prepaid cards and virtually 100% of everybody who need to charge customers accept cards. It is today difficult to find a merchant that does not accept cards, it is much easier to find one that does not accept cash! In 2013 more than 75% of everything sold in shops in Sweden is paid for by cards. Annual growth rate of transaction numbers is +11%. If you need to visit an emergency hospital you have to have a payment card to cover the 15 USD treatment fee... they do not accept cash. Same thing  if you want to buy a new I Phone 5... no cash acccepted in mobile phone stores. In 2014 we probably reach 80% card payments.  The driving force has been the business model making it convenient and affordable för both consumers and merchants to use cards instead of cash while banks acting as issuers and acquirers have been able to avoid the high and difficult to price for cash cost while earning revenue from the card payments. Most bank branches are cash free today - no OTC deposits or withdrawals are accepted.The Swedish central bank came  in 2012  to the conclusion that cards are more cost effective than cash for society down to the 3 USD threshold per purchase. The banks have in 2013 launched a P2P online real time money transfer service via mobile phones in order to tap into the cash usage between consumers.  Today I can avoid cash in 100% of all payment situations - if I want to. Still, the 80% level does not make Sweden cash free. The anonymity, the unaccountability,the culture to pay cash will for many years to come keep cash in circulation. Furthermore the authorities, in the shape of the EU Commíssion, want to regulate the card business model in Europe to "forster expansion of electronic payments on a unified European market under increased competition", by depriving the financial incentives for card issuers and add investmenty burdens, a safe way to see that cash will prevail - also in Sweden.