The SF Federal Reserve Bank questions the value of cash within a digital payments landscape

calendar iconJul 10, 2017


In a blog published by the Federal Reserve Bank of San Fransico earlier this year, the state and future of cash are questioned. And with smart, digital and crypto payment options popping up like there's no tomorrow, the loyalty for cash is tested.

Yet, amidst the threatening push for cashless futures, cash continues to thrive. Did you know that at a whopping 34%, it's the 18-24 year old demographic that make up the biggest share of people who prefer cash? In the US, up to 89% of American consumers still carry cash on a semi-regular basis. 

Except: Who uses cash?

Contrary to conventional wisdom, consumers who prefer and use cash are a diverse group. When it comes to age, the 2015 Diary shows that many younger consumers are cash “lovers.” Although the share of people who prefer cash was lower in the 2015 Diary across all age groups, approximately one-quarter of all age groups still chose cash as their primary payment preference. Consumers between 18 and 24 years old made up the largest share of people who prefer cash, at 38 percent...

"Personally, I am a diehard credit card user who loves cashing in her points for airline miles and hotel stays [...] That said, when my preferred payment option is simply not an option, I always turn to cash.”
"Wendy MathenyManager of Marketing AnalysisFederal Reserve’s Cash Product Office

Except: The future of cash

Using Fed data on currency in circulation as a proxy for the demand for cash, the CPO continues to see a strong and growing demand, both domestically and internationally. Today, there are roughly 39.5 billion notes worth approximately $1.4 trillion circulating around the globe. While we use cash for different reasons, our demand for cash does not show signs of declining anytime soon.

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SF FED Blog. "What’s the Value of Cash in a Digital Payments Landscape?" Federal Reserve Bank of San Francisco. February 27, 2017. Accessed July 10, 2017. Web.

Last Updated: Jul 19, 2017