Economy

Will Consumers Start Using Cash Again?

Douglas A. McIntyre

Published: April 5, 2018 6:35 am

Last Updated: January 12, 2020 1:45 am

The cash register has become an anomaly at many retail locations. As a matter of fact, some stores and restaurants do not accept cash at all. If people cannot pay with a credit card, they are not welcome. Data breaches that have exposed tens of millions of credit card records may change that trend. Anxious consumers may start to use cash. Ironically, it may be the safest currency available.

Cash dominated transactions for decades and, in some businesses, for centuries. Money was moved from bank to bank via cash. Banks had huge vaults with doors that weighed tons and secret combinations.

Cash became a notoriously unsafe way for people to keep their savings and the money they used daily for transactions. Bank robbers looted cash from bank branches and retail locations. People were robbed on the street, particularly in big cities. Some bills were hard to track, particularly ones that were not new. Along with the credit card came safety. Use of stolen credit cards could be hampered by banks and retail establishments. Over a relatively short time, plastic became more secure than paper.

The credit card has evolved into something that is an anachronism as well. Plastic is no longer necessary. People can store credit card numbers online with merchants that can access the records. The practices have been essential to the rise of Amazon and companies from eBay to Expedia, even to unicorn startups Uber and Airbnb. Without credit card numbers, none of these companies would be viable.

The e-commerce industry has become its own worst enemy. As hacker skills have raced ahead of security measures, consumers have started to shy away from supplying anything about themselves online. #DeleteFacebook has become part of the debate about whether people should provide their personal data online at all. This includes even basic information like name, phone number and address. Social Security numbers have become a precious part of people’s privacy again.

Cash was killed off by the credit card. The most modern forms of credit card face an erosion in trust. Cash may have at least a modest comeback.