America Lurches Toward a Cashless Future

Electronic payments are increasing, but a cashless economy has drawbacks.

(Image credit: © 2019 Ryan Donnell)

Joseph Bailey, an associate research professor at the Robert H. Smith School of Business at the University of Maryland, discusses the pros and cons of a cashless society.

According to a recent Pew Research Center survey, nearly 30% of Americans say they make no cash purchases during a typical week. How does the use of electronic payments in the U.S. compare with other countries? The U.S. is moving quickly toward more cashless transactions, but it still lags some European countries, such as Sweden, Denmark and Norway. Sweden has reached a tipping point at which only about 2% of transactions are conducted in cash. In part, that’s because the Swedes are technologically savvy, they have a relatively small market, and the government encourages electronic payments of its currency. Chinese cities are also embracing the cashless life, with a mobile-phone system that uses encrypted codes for transactions. In India, some 255 million people are making everyday purchases using the Paytm virtual wallet system, backed by China’s Alibaba.

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Rivan V. Stinson
Ex-staff writer, Kiplinger's Personal Finance

Rivan joined Kiplinger on Leap Day 2016 as a reporter for Kiplinger's Personal Finance magazine. A Michigan native, she graduated from the University of Michigan in 2014 and from there freelanced as a local copy editor and proofreader, and served as a research assistant to a local Detroit journalist. Her work has been featured in the Ann Arbor Observer and Sage Business Researcher. She is currently assistant editor, personal finance at The Washington Post.