Cards Are Continuing to Gain Over Cash

Physician's Money Digest, January31 2004, Volume 11, Issue 2

Still like to pay for things in cash? You may be a dying breed. The electronic age is in full force and only getting stronger. In 2007, 95% of the cash made by the Federal Government will be to replace worn currency, leaving only 5% as ‘new’ supply. Just 10 years ago, 80% of consumer payments were made with checks and cash. Today, credit cards and debit cards are used more than half of the time.

According to Newsweek, the number of electronic payments rose from 15 billion in 1995 to 44 billion in 2003 and the number of card-swiping terminals rose to 6.8 million in 2005. The Nilson Report, an industry newsletter, predicts that electronic payments will exceed 70% by 2010. Electronic transactions are cheaper for the government and more convenient for consumers; however, consumers and retailers pay for that convenience in transactions fees. With fees increasing and identity theft a continuing threat, will technology continue to thrive or will cash ever make a comeback?