Cash Is Not Dead Yet, Especially Among the Unbanked

By Steve Dinnen

The death of cash has perhaps been exaggerated.

As we’ve heard for years, consumers just aren’t that into using greenbacks for their purchases. Credit card and debit card usage surges to new highs every year, ACH transactions occur day-in, day-out (including nights and weekends), and by 2020, only 19% of purchases were estimated to have been made with cash. Surely the zero-cash days are not far off.

But financial thinkers question that assumption, and whether it’s even useful.

The run from cash may be a byproduct of the experience of the middle and upper classes, Brookings Institution senior fellow Aaron Klein writes in American Banker. After all, they have the easiest access to noncash payment systems. But there still are 7 million households without a bank account. That locks them out of the ACH game, and credit and debit cards may not be an option.

Fully one-third of unbanked people reported they were that way simply because they distrust the banking system. For them, cash is king. It’s also anonymous: Nobody’s toting up a list of your purchases and crafting a sales pitch based on your e-commerce transactions because they simply don’t exist.

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