Is Cash Still King?
As the world is advancing with rapid changes in technology every day, people start to move towards a digital payment environment. With the ease and convenience of mobile banking, digital payments, and virtual wallets the question is posed- is cash in fact still king? Let’s take a look at the pros and cons of both!
Reasons Cash Is Here to Stay
Electrical and digital systems can fail. Whether it be Wifi going down, power outages, or a broken webpage, things can go wrong with technology. When situations like this arise, the backup is cash. Cash is a foolproof form of payment.
Cash is the only form of payment that still truly remains anonymous. Housing your credit card or bank information online can leave you more susceptible to fraud or stolen information. Paying with cash protects your money and personal information from security breaches. When paying by cash, there are no personal information or details involved in the process.
Psychologically, it is more difficult for someone to hand over cold, hard cash rather than swiping a card. Furthermore, seeing the amount of cash in your wallet dwindling makes you acutely aware of the amounts in which you are spending. Many people use cash as a way to manage finances and protect themselves from overspending. A great budgeting method is pulling out cash at the beginning of each week and allotting a certain amount to what you plan on spending it on (gas, groceries, lunch, etc.) that particular week.
In today’s world, we enjoy instant gratification. Cash remains the fastest method of payment. The transfer of money is instant. There is no issue of waiting for a check to clear or a credit card payment to hit. This also helps you monitor how much money you have in real-time as opposed to the amount being pulled out of your account days after you have written a check.
Communities Without Digital Banking
Cash is still a predominate payment method for communities that may lack access to digital banking.
Reasons Digital Payments Are the Way of the Future
Cash is Gross
Cash has been circulated so many places and touched by so many different hands. During the COVID-19 pandemic, many individuals preferred contactless payment methods to avoid contact with germs. This can also be viewed as an added safety benefit of using digital payments.
Paper Cash Is Expensive to Produce
Each year, the Federal Reserve Board projects the likely demand for new currency and places an order with the Department of the Treasury's Bureau of Engraving and Printing, which produces U.S. currency and charges the Board for the cost of production. The production of paper cash and coin is an expensive endeavor. Meanwhile, cash is very easy to destroy. Think about how easy it is for that dollar bill you have been carrying around to rip and become useless.
Comprehensive Audit Trail
With a digital payment you can essentially track and maintain details of your payments at any given moment. This is a great resource to have when totaling up bills, tracking business expenses, or simply making sure your money got to a certain destination on a particular date.
When using digital payments, users can be eligible for many attractive discounts by buying online or in-store. Credit card companies also offer certain rewards such as travel miles, discounts, and cash-back when spending virtually.
Many individuals are engaging in P2P payments through apps like Venmo and Zelle (Zelle with Third Coast Bank available here) for Real Time Payments transactions to pay friends instantly. The best part is you can do this instantly from your mobile device from anywhere without a trip to the ATM to pull out cash.
There are many advantages to using both cash and digital payment methods. While digital payments are rapidly growing in popularity, it is safe to say that cash will not be going away anytime soon. How do you prefer to handle your money? Are you a strictly digital user, or do you prefer to keep cash on hand in your wallet? Let us know!