Has Cash Become Passé?

New research predicts plastic cards are on track to become more popular than cash payments across the globe this year.

September 30, 2016

CHICAGO – Worldwide, plastic payments are the new king, kicking cash to the curb, USA Today reports. New research by Euromonitor International shows that across the world, more payments via credit and debit cards will be made than cash in 2016. Plastic payments will register $23.1 trillion in consumer spending, edging out cash payments of $22.6 trillion.

“This stagnant growth of cash payments signals a shift ... and is a major victory for card and electronic payments,” said Kendrick Sands, senior consumer finance analyst at Euromonitor International.

One of the big shifts within plastic has been the increase of debit card usage. According to Euromonitor, the number of debit cards rose 8.1% to around 10.1 billion cards. Credit cards also proliferated with a 5.3% jump globally to reach 2.7 billion cards. In the United States, in 2016, 35.7% of spending was done with one of the 454.9 million cards in the country.

The preference for plastic payments over cash could mean consumers are using the cards to help keep on a budget. “Debit is the payment card that is most like cash,” said Michelle Evans, digital consumer manager at Euromonitor. “If consumers like to use cash as a way to monitor their budgets, then debit is the best vehicle for that.”

Driving the shift has been millennials, who, while eschewing credit cards, have embraced debit cards. “Certainly millennials are a very important generation,” Evans said. “The up-and-coming generation tends to be the generation that adopts any sort of new technology, and new payment methods certainly fall under that umbrella.”

Not everyone’s jumping on the card payment bandwagon. One Maine resident recently urged his fellow citizens to use cash at local merchants to help retailers avoid paying high interchange fees.

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