This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Who's Beating Us in Cashless Payments

NEW YORK ( TheStreet) -- It's no secret that more and more Americans are turning away from cash in favor of using debit cards, credit cards and mobile and online payments.

It turns out the rest of the world is going cashless too.

According to a report from MasterCard (MA) called The Cashless Journey, of $63 trillion spent by global consumers in 2011, 34% of those transactions were cash based and 66% were paid for with cashless currency such as credit or debit cards or electronic payments.

In the U.S. alone, 80% of all consumer payment transactions in 2011 were cashless, but that leaves Americans well down the list of countries on the fast path to abandoning cash.

Ahead of the U.S. were these countries:

Belgium: 93%
France: 92%
Canada: 90%
The U.K.: 89%
Sweden: 89%
Australia: 86%
Netherlands: 85%

For consumers, the trend away from paper-based currency is about convenience. Buying a pair of jeans or filling the car at the pump using cash costs consumers time, and as any economist will tell you, the extra stop at the ATM or bank to draw out cash is just as much a commodity as a $20 bill.

There's also the risk of losing cash stashed in pockets or in the console of a consumer's car or truck.

Consumers are also turning rapidly to smartphones to pay for goods and services, rendering even credit cards less useful. According to Forrester Research (FORR), mobile payment usage in the U.S. will rise to an estimated $90 billion in 2017 from $12.8 billion last year.

"What seems to be overlooked in the policy dialogue is that cash takes time to access, is riskier to carry and costs a country up to 1.5% of its GDP," says Peer Stein, an analyst at the International Finance Corp. "We can't expect the journey from cash toward electronic payments to be completed overnight, yet driven by technological advances and public-private partnerships this trend has gathered significant momentum over the past few years."

The MasterCard study says the U.S. is at a "tipping point" and that the only reason consumers even use cash is due to history and habit.

Still, the road to a cashless society includes several categories of global consumers. Analysts at the U.K.-based Kantar Media's TGI Insights & Integration team say there are three types of financial consumers right now:
  • Cashless converts: Those who have already readily embraced a largely cashless existence.
  • Cashless cautious: Those who have taken first steps toward moving away from cash but still have a ways to go.
  • Cashless concerned: Those who still cling fiercely to cash as the default means of payment.

Until the last category is convinced cash is a quaint relic, global governments will keep printing paper currency, even if they'd prefer not to. 

That won't be forever. In 20 years or so, don't be surprised if dollar bills go the way of the duck-billed platypus.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%
TSLA $162.60 0.00%
YHOO $27.97 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs