Cash is king has been a statement that we have all herd of but few take to heart. While the actual use of cash is aggressively dwindling, it is still an important tool that takes even more care in our techno society.
Today, most people use debit cards or credit cards to facilitate daily transactions. The days of writing checks, carrying coins or bills has come to a near halt in the mainstream economy. According to Gallup Polls, 24% of the population uses cash to make their purchases. That means that 75% of people are making their purchases by other means.
Consumers that receive government support get those funds on a pre credited debit card. Child support funds are deposited on a similar card. Actual paper money is becoming more of a black market tool than mainstream use. Can you imagine the drop in contributions to the Salvation Army at Christmas time or how much less is given to support the homeless and needy?
What happened and Why?
Paypal, Square, and hundreds of other smart apps have replaced the paper in your pocket. Now you can use your smart phone to pay at the local Starbucks or checking out of Best Buy. Technology is under foot that will bill you without ever going to a check out counter. The items will electronically be scanned and billed to you upon simply exiting the door.
Have you noticed that most local convenience stores only accept debit card transactions of $5.00 and up? How many times have you purchased more then you needed because you gum was only $1.59 and you had no cash in your pocket. A cost free way to double sales.on items under $5.00.
Creating a simpler form of cash delivery has eliminated the need for more employees as well as the speed at which money can change hands.
Do you remember check kiting? The process where you could write a check on Tuesday to buy food and not have any money in your account at that moment. The plan would be to get paid by Friday and deposit money before the check would hit the bank and try and clear giving you supplies today for money in the future.
Debit cards has given retailers next to immediate access. Funds clear overnight or excess fees will be billed. Checks now are verified thru a universal portal. This portal lets retailers know if you’ve written bad check recently and if you are good for the amount on the check.
People ultimately don’t value a plastic cards as a real monetary source. Therefore it is easy to pull out the card and buy what you want on an impulse. Checking to balance your account and verifying how much is truly available takes more work that most are willing to do.
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