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  • Writer's pictureJaime González Gasque

Will we see the end of cash by 2030?

In a single generation, cash has fallen from the undisputed king of payments to nearly the verge of extinction. Will cash still be viable in 2030, or are we on our way to a truly cashless society?

“The Jetsons” was a popular 1960s cartoon set a century in the future. The Jetson family of the 2060s enjoyed several “space-age” innovations that have already come true, like videoconferencing, smart watches and having robots perform household tasks.

There’s one “Jetsons” prediction that we can safely dismiss, however, and that’s its vision of cash. In the famous opening scene, the show’s main character, George, offers his wife, Jane, cash to go shopping. Instead of accepting, Jane grabs his entire wallet before she jets off to a physical shopping center.

Even in an imagined future world where cars could fly and anything was possible, we still paid in cash and did our shopping in the store.

A cashless future enabled by technology.

We may not be a cashless society by 2060, much less by 2030. But the fact is we’re closer to becoming a nearly cashless society every day.

The transition from a mostly cash to nearly cashless society didn’t happen overnight. Cash is being replaced over time as technology produces alternatives that make financial transactions faster, safer and easier.

Consider the arc of checks, credit cards and debit cards, the first modern wave of cash replacements. Each represented dramatic change when they were introduced. Many consumers embraced these new cash alternatives right away. For others, the cash habit was hard to break. Over time, these “new” alternatives made their way to the mainstream, forming new habits for billions of global consumers.

The more recent wave of payment innovations is taking an even deeper bite out of cash. Today, advances in technology and rising consumer expectations for convenience combine to offer contactless payments, integrated app-based payments and digital wallets.

Think of your own daily journey. Twenty years ago, you’d need cash for virtually every transaction throughout your day. You paid for your morning coffee at the corner store in cash. Getting on the bus required exact change. Lunch was cash-only and required waiting in line to order and pay.

Now, imagine those same transactions today. You very likely ordered your morning coffee on an app on your mobile phone, with payments deducted from your bank or from your preloaded account. Getting on the bus or subway in many cities now means a simple tap-and-go of your mobile phone or credit card. Whether ordering delivery or eating out, lunch during a busy workday is made easier by apps that let you both order and pay ahead – no waiting, no cash.

Cash's decline by the numbers.

Though in steady decline, cash was still the leading point-of-sale payment method globally as recently as 2019, according to Worldpay from FIS® Global Payments Report (GPR). In 2019, cash accounted for 30.2% of global point-of-sale transactions, with a healthy margin over the next most popular payment method, debit cards, at 24.3%.

Cash represented just 20.5% of global POS transactions in 2020, a dramatic 32% reduction from 2019, according to the Global Payments Report.

Then the COVID-19 pandemic hit. As commerce shifted from physical stores to e-commerce, cash fell sharply. Cash represented just 20.5% of global POS transactions in 2020, a dramatic 32% reduction from 2019, according to the GPR.

We can’t quite see where cash will be exactly in 2030, but near-term projections see a continuation of the decline. Globally, the GPR projects cash will fall from 20.5% of global point-of-sale transactions to just 12.7% by 2024. Even in a growing global economy, that means more than $2 trillion dollars of cash that was in global circulation in 2020 won’t be around in 2024.

In North America, cash is projected to account for only 8.7% of all POS transactions by 2024. If you’re looking for a cashless society, it’s increasingly easy to find.

What does a cashless society mean for banks?

Financial institutions already live on the front lines of the transition to a cashless society. The displacement of cash presents daunting challenges alongside tremendous opportunities in creating a lasting payments infrastructure for 2030 and beyond. Having successfully navigated disruptions by innovating and adopting business models like credit cards, financial institutions will need those skills and more to navigate digital transformation brought by the smartphone.

Financial institutions know all too well the importance of adjusting to cash’s decline. Less cash means fewer trips to the bank, and fewer trips to the bank means that there will be fewer branches for financial institutions to support. Customers need cash even as less is coming in, resulting in a shortage so severe that the U.S. Federal Reserve imposed coin distribution caps during the pandemic.

“There’s a lot we don’t know about life in 2030, but financial institutions don’t need to wait to know that cash will be very near – if not beyond – retirement.” said Mike Kresse, head of global B2B payments at FIS “From individual consumers and small businesses to the largest clients, cash can’t compete with rising expectations for fast, safe and easy payments. The smartphone was already transforming payments, and the pandemic brought the future faster, accelerating the trends.

“Decision-makers at financial institutions face the same imperatives as their business clients: Deliver services at the highest bar for speed, convenience and security. Digital transformation means going beyond online banking, with innovations like live remote wealth management consultations or apps that make running a business easier. The customer experience needs to match the speed and convenience everyone expects in every financial transaction.”

The sunset of cash heralds the immediate need for digital transformation for today. Planning for a cashless society in 2030 is too late: It’s happening now.

The cashless society is all around us.

So, will we be a cashless society by 2030, if ever? “Cash will likely persist in some countries and economies for decades, much like vinyl records persist in the digital age,” Kresse said. “But it’s already well past its prime, and the sunset of cash is already in full swing. Even the first wave of cash replacements like checks and physical payment cards are being replaced by digital alternatives.”

One of those alternatives, the mobile wallet, exceeded cash for the first time for global in-store payments, according to the GPR. And, while mobile wallets are not anything new, adoption of them grew significantly due to the pandemic.

“The technologies that enable digital payment innovations have been in use for years, but the pandemic created a tipping point,” Kresse said. “Businesses and consumers needed to conduct essential commerce – even at the distances the pandemic demanded. Cash was not only impractical; it was nearly impossible to use.

“From pure e-commerce to blended commerce like online ordering and curbside pickup and everything in between, consumer economies moved forward without cash. As it turns out, consumers really liked the new payment methods and technologies. Some consumers may fall back to old habits, but many more will form new habits around the convenience of digital payments.”

As far as bold predictions, Kresse stopped short of saying the global economy will ever be completely cashless. He believes, “there will always be an element of nostalgia about cash.” But Kresse also believes that all sports stadiums, all mass transit, and the majority of retail and restaurants will be all cashless in the future – maybe even by the year 2030. All third-party trademarks are the property of their respective owners and not affiliated with FIS.

Contact Expert: Mike Kresse

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