Will millennials go cashless?

calendar iconMay 8, 2018


A recent post by Brave New Coin says that 'millennials are driving the change and shaping the future of money.' Yet, even with half the workforce experimenting with a wide array of new payment options, cash is still alive and well due to its unique convenience and reliability.

Fintech journalist, Andrew Gillick draws findings from the Federal Reserve Bank of San Fransico's report on growing cash use as well as a recent report from the J. Walter Thompson Company titled, Future of Money. The former provides a recent and authoratative report on cash stats within the US while the latter analyses the power of demographics in leading social and economic change. Gillick concludes that even in the age of digital payments, there's a long way to go before phasing out king of payments - Cash. 

Why wouldn't the tech-savy generation turn to alternative currencies or accounts? Reasons for their general reluctance towards bank accounts include low interest rates and lack of trust in financial institutions since the 2008 Global Financial Crisis. 

And still, that doesn't mean millennials will be going cashless any time soon. The Federal Reserve Bank's research reveals that when it comes to consumer cash use in the United States of America, cash still rules.

"The perception that young people rarely use cash is just not correct," - Doug Conover (Analyst at FRBSF)

Enter 73 million millenials

Soon to make up two-thirds of the workforce, the millenial generation* have a difficult position to play in the payments landscape. 

On the one hand, the tech-savvy generation make for perfect trial subjects for testing all the new mobile, smart crypto options springing up all across the payments landscape. On the other hand, it's costing them financial self-control and rights to their personal data. 

Unsurprisingly, they are not quite ready to say goodbye to cash just yet...

“Reports of the death of cash have been greatly exaggerated [...] In most countries, demand for notes and coins is strong and shows no sign of slowing down.”
"John Williams (president & CEO)Claire Wang (data & policy analyst)Federal Reserve Bank of San Francisco


Excerpt from Brave New Coin article 

Tainted by the legacy of the Global Financial Crisis, millennials arguably had the most reason to lose faith in the current financial system and, according to research on the Future of Money report, 76 percent of millennials are looking for new forms of banking. Millennials are driving the move to mobile banking.

Are we close the end of the cash age? 

With the proliferation of so many digital mediums for holding, transferring and transacting our money, looking from street to street to find your bank’s nearest ATM machine to take cash out seems like an ancient way of living. 

Proponents of cryptos as a form of payment are usually quick to cite cash’s decline to bolster their argument. However, as anachronistic as the cash system seems now its use has not diminished as much as popularly believed...

So we have two very contrasting findings.

In the context of the Future of Money report the emphasis is on demographics as a powerful force driving social and economic change; that millennials will soon become the most dominant generation in the workforce and that they are seeking ways to disintermediate conventional banking. Also, emerging economies with burgeoning youth populations and restricted access to traditional banking are already the biggest adopters of mobile banking and there is no reason why this trend won’t accelerate.

But we should temper the idyll of a totally cashless society with the Fed’s findings and consider that although we may be in a fasting-moving trend to mobile and decentralized banking, we’ve only scratched the surface there’s still a long way to go. 

“We don’t believe in a world that will be cashless [...] Cash will continue to be the bulk of payments for the next fifty years. But digital will grow faster.”
"Odilon AlmeidaPresident of Western UnionAs quoted by CNN

According the Federal Reserve Bank of San Fransisco, 'the majority of person-to-person money transfers between millennials are made with cash.'

Today, we have a variety of options to exchange money with each other, including mobile apps like Venmo. Despite these options, millennials mostly use cash to pay back a debt or give a monetary gift.

Suggesting that even alongside the disruption of digital payments, cash continues to be the fastest, most convenient and reliable payment choice.

*Pew Research defines millenials as those born between 1981 and 1996

Read full blog piece here


Gillick, Andrew. 'Will millennials be a cashless generation?' Brave New Coin. Published 04 May, 2018. Accessed 08 May, 2018.

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Last Updated: Jun 15, 2018