current
Cash Usage Declining
Digital payments are rising, checks are disappearing, and cash usage is declining towards a stable baseline.
Timeframe
near-term
Categories
Subcategories
Impact areas
Detailed Analysis
The increasing adoption of digital payment methods like credit cards, debit cards, and P2P transfers is driving a decline in the use of checks and cash. While checks are nearing obsolescence, cash is expected to remain in circulation, albeit at a lower, more stable level. The shift away from checks is evident in the move towards "check zero" policies by major retailers like Target, Whole Foods, and others, primarily driven by cost savings and fraud mitigation. "As consumers increasingly leverage these e-commerce options, they will need to pay for these online purchases with a digital option."
Context Signals
Federal Reserve data shows check transaction volume and value decreasing.
Cost of issuing a paper check is $2-$4, while receiving a check costs businesses $1-$2.
ACH transactions cost less than $0.50.
Edge
The 'floor' for cash usage may be higher than anticipated due to its continued relevance in specific demographics or situations.
New digital cash or CBDC implementations could revitalize cash usage in a digital format.
