If you can’t remember the last time you paid cash for groceries or a cup of coffee, you’re not alone. More than 40% of Americans say they don’t use cash for any of their purchases in a typical week, up from 24% in 2015, according to Pew Research.
What’s more, many Americans have resigned themselves to a world without cash: Nearly 65% believe that it’s either likely or very likely that the U.S. will become a cashless society in their lifetimes, according to a Gallup poll conducted in 2022.
Multiple factors have led to a shift away from cash, including the increase in online shopping, particularly during the COVID-19 pandemic, and the growing use of self-checkout lanes at grocery and other retail stores.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Technology has also played a role. Electronic payment devices have made it possible for even very small merchants, such as sellers at local farmers' markets, to accept digital payments.
Meanwhile, smartphone apps such as Zelle, Venmo, Apple Pay, and Cash App allow users to pay their babysitters or split a restaurant bill without opening their wallets. The shift has led to some profound changes in the retail and banking industry.
Some retailers no longer accept cash payments, while the number of ATMs has declined by 4% since 2019, according to Euromonitor International, a London-based research firm.
Misdirected Money
While transferring money via payment apps is convenient, the fact that you don’t have to do it in person increases the risk that you’ll send it to the wrong recipient.
In addition, scammers have targeted users of mobile payment apps by impersonating legitimate businesses seeking payment for a product or service. Others pretend to be a loved one needing cash to pay for an emergency. Another tactic is to send a text purportedly from your bank, claiming that your account has been compromised.
Some 13% of people who have used one of the most popular payment apps say they’ve been victimized by a scam, while 11% report that their accounts have been hacked, according to Pew Research. U.S. consumers lost $1.6 billion to payment app scams in 2021, an amount that’s projected to rise to $3 billion by 2026, according to ACI Worldwide, a payments software company.
These scams aren’t new, but they’re problematic for users of mobile payment apps. Once you transfer money, it’s difficult to get it back, even if you were scammed or accidentally sent it to the wrong recipient.
However, if a criminal hacks your P2P account (say, by stealing your user name and password and logging in from his or her device) and makes unauthorized transactions, you may have some legal protections.
Some lawmakers are pressuring the banks that own the Zelle network to reimburse customers who lose money due to payment fraud. It’s unclear, though, how such a plan would work and whether it would cover customers who lose money due to user error.
If you use payment apps, the Federal Trade Commission and the American Bankers Association offer these tips:
- Protect your account with multifactor authentication or a PIN.
- Confirm the name, e-mail, phone number or applicable identifier of your intended recipient before you transfer money.
- Don’t share bank authentication or verification numbers or your personal information with anyone who contacts you, even if the caller ID indicates it’s a familiar company.
- Set up alerts to notify you of transactions in your account.
Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related Content
-
Stocks Can't Hold Meta, Microsoft Gains: Stock Market TodayThe main indexes all opened higher Thursday on impressive Big Tech earnings, but momentum faded into the close.
-
Retirement Health Care Costs Are On the Rise: What You Need to KnowA 65-year-old retiree will face significantly higher lifetime health care costs than they would have a year ago, even with Medicare. Here are the surprising totals.
-
These Beach Towns Are the Safest Spots in the US This SummerLow crime rates, accessible medical care and calm conditions make these coastal destinations perfect for a stress-free getaway.
-
You Need to Have This Financial Talk With Your SpouseWomen are poised to inherit significant wealth from their husbands. Here's how they can prepare for it.
-
Three Ways to Find Deals in Your Investments This YearLooking for ways to save because of tariffs? Don't forget to look for deals in your investments. Here are three expert tips for making a little extra this year.
-
Surprising Ways to Find Deals on Cars Despite TariffsLooking for a new car? Tariffs will make good deals harder to find, so use these expert tricks to get a lower purchase price and keep long-term costs down.
-
Don't Miss Out on These Four Credit Card BenefitsCredit card benefits aren't always limited to cash back, points and miles. Check whether your existing card offers these valuable extras — or switch to one that does.
-
Smart Ways to Save Money at MuseumsWant to save money at museums, art galleries, zoos and gardens? Use these tips to get free or discounted admission to national and local collections.
-
How to Find Deals on Travel in 2025Finding deals on travel is an excellent way to cut costs in 2025, as tariffs start to bite. Here are three suggestions for lowering the cost of your next trip.
-
Strategies to Spend Less on Clothing and Online Shopping in 2025It's easy to spend less on clothing and other goods when shopping online. Arm yourself with these expert tricks and tools that will help you grab a bargain.
