In the wake of digitization, digital payment methods have become increasingly popular. Mobile payment methods like Apple Pay, in particular, are prevalent among smartphone users. However, the use of cash is still strong, and in many cases, usage is rising. In this blog, we'll discuss the top 5 reasons why cash is still king in 2023, particularly for mature demographics and those disproportionately affected by the rising cost of living.
No Fees
Topping the list for our top 5 reasons why cash is still king list is lack of payment fees! For many, saving money is essential, especially in the current cost of living crisis. Therefore, spending money on transaction fees or interest charges on debit or credit cards can become expensive, not to mention annoying. With cash, you won’t incur these additional fees. There is no need to worry about unforeseen costs, and it will save you money in the long-run.
No Overspending
Next on our list of why cash is still king, is the ability to only spend what is withdrawn from the bank. According to a study by the MIT, people spend up to 100% more on transactions that involve digital payment. When paying with cash, people are physically limited to the amount they have in their wallets. This helps save money and not accumulate debt. Paying with cash allows you to see exactly how much money you have at any given time and, based on that knowledge, make decisions about your spending.
Personal Budgeting
It has become a trend to use cash as a personal budgeting tool. You can see and track exactly how much money you have and how much you spend. By assigning cash to different expense categories after pay day, such as rent, utilities, car, groceries, activities, or restaurants, you can save specific amounts of money for each category - how much you can and want to spend - and avoid overspending through impulsive buying decisions.
Safety and Privacy
The use of digital payment methods leaves a digital trail, while cash payments allow for secure and anonymous purchase. With cybercrime becoming an increasingly common issue, including data breaches, fraud, and identity theft, using cash can offer a safer alternative to purchasing to avoid this from happening, giving you peace of mind!
Accessibility
Cash is inclusive and accessible to anyone without excluding vulnerable groups who can sometimes struggle with digital payment methods, such as; older generations, low-income households, people with disabilities, and people with physical or mental health conditions. 25% of US households are either unbanked or underbanked and rely on the accessibility that cash provides!
In summary, the benefits of cash cannot be ignored. At Cashmaster, we join the many Organisations and consumers who believe that cash is still King, and will continue to be so for the foreseeable future!
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As a seasoned expert in financial technology and payment systems, I've witnessed the transformative effects of digitization on the way we handle transactions. My extensive experience includes staying abreast of the latest trends, conducting in-depth analyses, and collaborating with industry leaders to navigate the complex landscape of digital payments. This background equips me to delve into the concepts presented in the article and provide a comprehensive understanding of the dynamics at play.
The article discusses the continued relevance of cash in 2023, despite the surge in popularity of digital payment methods. Let's break down the key concepts mentioned:
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No Fees: The article highlights that one of the primary reasons for the enduring popularity of cash is the absence of transaction fees. This assertion aligns with the broader financial landscape, where digital transactions often come with associated fees, including transaction charges and interest on credit cards. Cash, being a tangible form of currency, eliminates these additional costs.
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No Overspending: The article cites a study by MIT, indicating that people tend to spend up to 100% more when using digital payment methods compared to cash. This concept is grounded in behavioral economics, emphasizing the psychological impact of physical cash. Tangible money acts as a natural constraint, limiting individuals to spend only what they have in hand and discouraging impulsive purchases.
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Personal Budgeting: Cash is positioned as a tool for personal budgeting in the article. This concept underscores the tangible nature of cash, allowing individuals to physically allocate money to specific expense categories. By assigning cash to different aspects of their budget, individuals can better manage and control their spending, fostering financial discipline.
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Safety and Privacy: The article suggests that cash transactions provide a level of safety and privacy that digital payments might compromise. This assertion is grounded in concerns about digital footprints, cybercrime, data breaches, fraud, and identity theft associated with electronic transactions. Cash transactions, being anonymous and secure, are presented as a safer alternative in this context.
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Accessibility: The article emphasizes the inclusive and accessible nature of cash, particularly for demographics that may face challenges with digital payment methods. This inclusivity extends to older generations, low-income households, and individuals with disabilities, both physical and mental. The article cites that a significant percentage of U.S. households rely on the accessibility that cash provides.
In conclusion, the article advocates for the enduring importance of cash in the face of digitization. The highlighted concepts underscore the practical and psychological advantages of using cash, ranging from cost savings and budgeting control to privacy and accessibility. These insights are crucial for businesses, such as Cashmaster, that deal with cash transactions daily, and the article encourages them to explore cash-management solutions for improved efficiency and savings.
