In its recent “The Future of Money in a Mobile Age” report, the Pew Internet and American Life Project has released a strong compilation of data sources as well as the results of its own survey of technologists on the future of money in these days of mobile devices. It’s well worth the read
In the opinion of these experts, and we agree, cash and cards will still be with us in a decade. So, for financial institutions, merchants, the Fed, and consumers, folding money will still be a tool for exchanging value. The important question has far more to do with the volume each method enjoys and there is no question the convenience of electronic exchange will continue its paper-killing drive.
But extinction for paper is still a long way out. Paper, especially cash, will continue its appeal for those who deeply mistrust the traceability of electronic transactions, poorer consumers with limited access to electronic means of value exchange and, of course, criminals. As author David Wolman pointed out in his useful and entertaining 2012 book “The End of Money: Counterfeiters, Preachers, Techies, Dreamers – and The Coming Cashless Society” cash is a criminal organization’s best friend.
As the ability to transact via smart device expands, an implication for developed economies then is the potential growth of regional preferences for particular methods of exchange. In the U.S., for example, the Deep South is poorer, more deeply religious, and conservative, characteristics that will tend towards favoring cash and check transactions at a rate higher than either coast, for example. For many in this region, cash is both the trusted means of exchange and, too often, the only method available. This has implications for payment service providers, merchants, government entities, and financial institutions as they plan for merchant acquiring, terminal deployments, card issuance, app usage, and more.