Is a Cashless Society Around the Corner?

Editor’s Note: This blog entry was originally published on March 28, 2018, and was updated on June 12, 2020.

The Move to a Cashless Society

While America isn’t yet a fully “cashless society,” in recent years, more and more Americans have switched from cash to other payment methods like credit/debit cards or contactless payments such as digital wallets.

Studies have shown that about 3 in 10 Americans said they make no purchases with cash in a typical week - back in 2015, that number was closer to 2 in 10 Americans. In addition, only 18% of respondents said that all or nearly all of their purchases are made using cash, a percentage that had dropped from 24% in 2015.

A U.S. Bank survey found that 50% of respondents said they carry cash with them less than half of the time they are out. When they do carry cash, 76% said they carry less than $50, and nearly half carry less than $20.

Examples of Cashless Transactions

Food Delivery and/or Curbside Pickup

Many restaurants now have apps that allow customers to pre-order and pay right in the app. This has become so convenient to both the customer and the restaurant, that more and more locations are adopting this technology. Smartphones with digital wallets have become so ubiquitous that a few establishments have found they can eliminate cash payments with little negative impact to the business. In fact, there are even benefits: removing the exposure of sending out delivery drivers with money in pocket, avoiding runs to the bank, and not hassling with the security issues associated with keeping money onsite.

Onsite Cashless ATMs

Some retail locations have started using cashless ATMs. These function similarly to regular ATMs - the main difference is that the transaction is completely electronic. A customer follows the onscreen prompts and enters the PIN number associated with their payment card. Instead of dispensing cash, the machine provides a voucher confirming that money has been debited from the customer’s bank account and directly deposited into the merchant’s bank account.

QR-Code-Based Retail Stores

Recently, some retail stores have begun experimenting with a business model based on smartphone QR codes. A customer enters the store and browses the merchandise as they would during any shopping trip. Using the store’s shopping app and the camera in their cell phone, they scan the QR code by each item they wish to purchase. This, in turn, enables a payment to the store. A clerk only needs to confirm payment at the end and see the shopper out the door – with no cash changing hands.

Advantages of Cashless Payments

Many consumers and businesses see the advantages of adopting or offering cashless payment methods.


Cashless payments are certainly more convenient for many customers. If they’re paying with a cashless method such as a digital wallet on their smartphone, they don’t have to worry about whether they’re carrying enough cash to cover their purchase. Transactions are quicker because there’s no need to count out change.


Digital payment methods have robust security features built in. If a thief steals your wallet, they can spend your cash right away. If they steal your smartphone, it’s harder for them to access your payment methods due to security features such as passwords and PINs.

Easier Business Operations

Businesses such as restaurants and retail stores need to manage their cash flow. They need to have a secure location onsite to store their cash, ensure they always have enough cash on hand to make the proper change, and make frequent deposit runs to the bank. With cashless transactions, these time-consuming tasks are eliminated.

Disadvantages of Cashless Payments

While there are many advantages to cashless payments, there are also several disadvantages, which may explain why the country has not yet made the transition to being a fully cashless society


Some consumers are afraid that they’ll sacrifice privacy if their personal information is used for digital transactions. Software developers and merchants can alleviate this concern by ensuring their payment software has a robust security program including such methods as tokenization.


Cashless payments rely on technology in order to work. If a power outage occurs, or the Internet goes out, it’s a good idea to have cash on hand as a backup payment method.

Limited Availability

Cashless payments require users to have credit cards and/or a smartphone. Since 22% of Americans don’t have a credit card, and not everyone can afford a smartphone, a fully cashless society would leave out a lot of the population.

For these reasons, even as more and more customers and businesses continue to implement the latest technology payments, cash will likely remain widely-used as a backup for these methods for some time to come.