According to Bank of America, in America, the share of non-cash trade in the IV quarter of 2019 amounted to 50.4%. The situation in which non-cash expenses exceeded cash in our country for the first time. Analysts at SberData predict that in 2020 the 50% threshold will also be overcome.
Experts are in no hurry to put America on a par with states that are rapidly abandoning banknotes. We cannot compete in this area, for example, with Scandinavia or South Korea, which in the next 5-10 years plans to completely switch to cashless payments. Moreover, statistics show that it is cash that remains the most popular payment method: 89% of our compatriots regularly use it, according to Levada Center. According to the Bank of America, in January of this year, the cash volume amounted to 10.6 trillion dollars, which is 2.9% more than in 2019. Today, Americans have a little more than 6 billion banknotes in their hands, which citizens are not going to refuse.
Who and how uses cash in America
The Levada Center survey shows that in our country, older people prefer cash: they are used by 91% of citizens aged 55 and 90% from 40 to 54 years. Among young people under the age of 25, this type of calculation is chosen by 84% of respondents. Men prefer to pay in cash more – their share is 57%. Most often, Americans carry from 500 to 1000 dollars in cash (28%) and spend up to 1000 dollars on everyday purchases (25% of respondents).
According to Romira, cash is preferred by compatriots with lower earnings. So, families with an income per person up to 30 thousand dollars use this payment method in 60% of cases, with an income of more than 60 thousand – in 30%.
Analysts at Raiffeisenbank note that most often Americans part with cash in markets, in transport, in taxis or in stores near their homes, less often when buying electronics, repair supplies, and books.to transfer money to use TD Bank Routing Number In cities with populations from 100,000 to 300,000, citizens more often spend cash on medicines (45.5% of respondents). The average payment for all categories of goods does not exceed 1 thousand dollars – this was stated by 74% of respondents. As for cash withdrawals, most often Americans take from 15 to 20 thousand dollars in terminals.
Why do customers prefer cash?
Despite the widespread use of bank cards, many citizens of developed countries prefer to keep cash with them. Megan Elliott, a financial analyst, and writer have compiled a list of key reasons.
Cash is accepted everywhere
Today you can pay in cash at any store. Exceptions are quite rare: for example, in Sweden, there are cafes and restaurants in which you will not accept bills. However, in approximately 99% of cases, you can get what you want by leaving banknotes at the checkout.
Cash comes in handy in an emergency
Elliott notes that cards are convenient as long as they can be used. If a malfunction occurs in the banking system or a power outage occurs in a store, then you cannot pay. Many governments have added not only food, clothing, water, and medicine, but also cash to the list of the most essential things in the event of natural disasters. After all, if a flood or a hurricane destroys power lines or network cables, then the cards will become useless.
Cash helps save money
Card issuers may charge a small transaction fee to companies. Stores compensate these costs at the expense of buyers, to whom they charge an additional amount. Moreover, if the client pays in cash, he does not overpay anything.
Cash protects against big expenses
Researchers at the Massachusetts Institute of Technology found that customers who use bank cards are willing to spend more than those who prefer cash. In addition, banknote holders are more likely to pay attention to the value of the goods, and not to its advantages.
Payment by notes enhances the emotions of the purchase
According to the authors of the Journal of Consumer Research, we experience greater pleasure and a strong emotional attachment to the things we purchase for the cash.
Cash helps plan your budget
It is difficult for many people to perceive virtual money as real. For this reason, they are not able to correctly plan their budget, because they are not spending their property, but something ephemeral. Businessman Dave advice to lay out money in several envelopes, depending on the type of spending: for the purchase of food, clothing, training, for entertainment. When you visually see how money disappears from each envelope, you can better control your budget.
No one will know your expenses
Not only attackers but also law-abiding citizens appreciate anonymity. Government agencies will easily track purchases on a card, but will not be able to do this if you paid in cash. In addition, credit card issuers and retail stores can share purchase data with marketers who use the information to promote their product.
Fears of Americans related to the use of cashless payments
Along with the above advantages of using cash, experts highlight the most common fears of Americans related to bank cards. According to the Levada Center, 40% of our compatriots are afraid of becoming a victim of scammers and hackers. Analyst at Finam Group Alexei Korenev believes that Americans prefer cash because they do not believe in the stability of the global and domestic banking system.
In addition, fellow citizens do not like the increasing international isolation of America, the regular introduction of sanctions, and the constant aggravation of relations with leading states. Also among the adverse factors, the analyst refers to a decrease in real incomes of the population, an increase in VAT, and retirement age. According to Korenev, taught by the bitter experience of the 1990s, Americans keep cash in order to pay off loans, pay off small contracts, and lend money.
The impact of cash on the economy
Most American officials and financiers advocate the transition of the population to cashless payments. According to the Finance Minister, this will lead to a “whitewash” of the economy: the state will take control of all transactions and will be able to collect more taxes. Such a step will be a serious help in the fight against corruption, “gray” schemes, and fraud. In addition, notes Siluanov, the modern economy requires the construction of a new financial system – more flexible and operational, which can only be achieved by switching to cashless payments.
In turn, the expert on remote service channels, Alexander Shibaev, believes that the disappearance of cash is unprofitable for the state. This is due to the fact that thanks to the money supply, the country ensures its own independence and economic security.
Currency Research partner Viktor Ionov notes that today, along with cashless payments, there must also be tangible means of exchange. In his opinion, new technologies can become an instrument of state pressure on citizens if, for example, the government closes non-cash exchange channels, hiding behind concern for the security of the country and its citizens. In addition, do not forget about possible environmental and technological disasters that can disable the entire infrastructure.
Cash Benefits for Small Businesses
If the state insists on the transition of the business to a non-cash form of payment, then American entrepreneurs themselves are interested in the reverse process. According to the leading TeleTrade analyst Artyom Avinov, this is primarily due to large tax and administrative deductions. For example, the owner of the enterprise can make cash payments with counterparties, getting rid of the high fiscal burden.
The analyst notes that the state does not make efforts to withdraw business from the shadows and worsens the situation by raising the value-added tax to 20%. In addition, government actions aimed at helping entrepreneurs lead only to a short-term effect, but they are not designed for long-term support and development of small businesses, which further stimulates the flow of cashless payments.