Kim Messina, going through her normal before-work routine, stood in line at Starbucks to buy a coffee to start the day. When the barista asked her for the $4.50 for the grande latte with almond milk, Messina did what she did every other day -- she pulled out her credit card.
"I didn't have my full wallet on me," said the 32-year-old, New York-based digital media producer, who added she really began noticing using her cards more than cash about 15 years ago. "I had my credit card holder, which has my MetroCard, my license and a couple of credit cards. It's just easier to bring that with me wherever I go than my big wallet."
Aside from an occasionally joining friends for a birthday dinner or getting her nails done (the salon lacks a payment infrastructure to take credit cards), cash is hardly ever an option for Messina. "I just don't think about it," she says.
Messina, like most Americans, is using cash at a much less frequent pace than they did several years ago -- a trend that's not slowing down anytime soon.
'More convenient than having to carry cash'
According to a June 2016 Gallup poll, 24% of Americans use cash for purchases, down from 36% five years ago. One of the chief reasons is the continued increase in technological innovations, both on the payments side and the purchasing side.
"As mobile technology and e-commerce have proliferated, Americans can use their cellphones and computers to make purchases," the poll's findings read. "And, with the onset of PayPal, Google Wallet, Apple Pay and numerous other mobile payment options, Americans may find that paying for items electronically is more convenient than having to carry cash for in-person purchases."
These stats aren't just unique to Americans -- the globe is quickly moving towards a "less cash" society, if not a cashless society altogether.
Late last year, global market research company Euromonitor International noted that consumer card payments surpassed cash payments for the first time ever, amounting to $23.1 trillion across the globe. Card payments and mobile commerce are expected to grow at 6.6% and 23% compound annual growth rates until 2021, compared to just 1.3% for cash.
"With more consumers gaining access to financial products and services, total debit cards in circulation are expected to register a 7.4% global CAGR growth from 2016 to 2021," said Kendrick Sands, senior consumer finance analyst at Euromonitor International in a statement. "Overall, continued strong momentum is expected in the conversion of consumer payments away from paper to card and electronic alternatives."
Some countries around the globe have gone so far as to surpass traditional payment infrastructure, either due to technology or because it was never there in the first place. For example, in Kenya, the majority of the population has a smartphone, making mobile payments far easier there than in some developed countries.
The phenomenon is strong in Asia, as countries like China are experiencing strong growth, where more than 5.4 billion debit cards are in circulation. It's happening in India as well, which recently experienced a shock and awe tactic by Prime Minister Narendra Modi's administration to limit the number of bank notes in circulation, in hopes of cracking down on corruption and unpaid taxes.
But governments around the world are moving toward the same end-goal all at different paces, and regulations vary by country, making it difficult to have a "one-size-fits-all" solution.
Investors have been moving towards companies that have attractive profiles in a "less-cash" society, including the big credit card processors, such as Visa, AmericanExpress (AXP) - Get Report and MasterCard (MA) - Get Report , as well as other financial technology companies, like PayPal (PYPL) - Get Report and London-based Worldpay.
Asset manager PureFunds, owns the aforementioned names in its PureFunds ISE Mobile Payments ETF (IPAY) - Get Report and also has exposure to the mobile payments space with other ETFs under the firm's belt.
The transition is likely to increase over time, as mobile payments provide "superior economics," according to a January 2017 research note from Wedbush Securities analyst Moshe Katri. By 2017, research firm eMarketer expects that U.S. retail mobile commerce sales will reach $151 billion, a 23% rise over 2016. That benefits the interchange networks, as Moshi noted the card not present (CNP) fees "typically call for higher interchange fees."
The trend toward fewer payments is likely to continue for two major reasons -- it's a more seamless experience and governments around the world are pushing their citizens toward it, said PureFunds CEO Andrew Chanin.
"There are lower transaction fees, faster transaction times and maybe they simply don't like using cash," said Chanin, whose firm has around $1.1 billion in assets under management.
Recently, governments such as France, Italy and Spain have implemented maximum cash transaction settlements. In France and Italy, the maximum is 1,000 euros, while Spain has a 2,500 euro maximum. In the U.K. -- which is also moving fast toward a society in which cash plays a much smaller role -- doesn't even have a 100 pound note.
Investors, speculators and tech enthusiasts are also looking at alternatives to cash, including Bitcoin and other crypto or digital currencies.
In a 2013 letter to the U.S. Senate, then Chairman of the Federal Reserve Ben Bernanke did not specifically heap praise on bitcoin, but noted there may be benefits down the line.
"In 1995, the U.S. House of Representatives held hearings on 'the future of money' at which early versions of virtual currencies and other innovations were discussed," Bernanke wrote in the letter. "Vice Chairman Alan Blinder's testimony at that time made the key point that while these types of innovations may pose risks related to law enforcement and supervisory matters, there are also areas in which they may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system."
Countries around the world are starting to look at having their own digital currencies, which currently are regulated by a central bank or any other monetary institution. Ecuador has its own digital currency, and several Scandinavian countries are testing various ones in hopes of getting them to the public over the next several years, Chanin said.
"There's going to be a power struggle of who gets to control it and should it be centralized or not, but there may be some decentralized ones that could be considered as assets," Chanin added.
It's not just investors who are clamoring for the move to digital assets -- it's anyone who has a checking or a savings account with a low interest rate.
"If you have a negative yielding bank deposit, it makes more sense to take the cash out of the bank and put it elsewhere that gives you a higher yield," Chanin said. "But if you ban cash, you're taking away the ability to take the money out."
Many countries around the world want to be the first to be ones that go "cash-free," with benefits ranging from tracking purposes, to how money is actually being spent to trying to reduce black market purchases.
Goldman Sachs analyst James Schneider -- who has a conviction buy rating on shares of Visa (V) - Get Report -- wrote that recent laws passed by the European Union are likely to keep pushing consumers towards using cards.
"We believe recent EU payment regulation is setting the stage for both faster volume growth (as fee reductions cut the cost of card acceptance for merchants) and market share gains," Schneider wrote.
However, criminals are likely to get around these rules and regulations and there will always be individuals that want to use cash, experts noted.
"Whether their government lets use it, is another story," Chanin said. "The case for cash is if you don't like the interest you're getting in your bank account, you have the ability to store it, but the benefits of doing so continue to dwindle over time."