by Hans Eisenbeis
- For years now, observers have been predicting the end of paper and coin currency thanks to the ascendance of debit and credit cards, as well as the persistence of personal checks.
- The US Mint reports that this is, in fact, the case; the Mint is printing less money than ever before. During the 2010-2011 fiscal year, fewer $5 bills were printed than at any other point in the last 30 years, and for the first time in modern history there were no new $10 bills.
- The popularity of plastic is definitely putting a pinch on cash, but money today is also more durable, and therefore fewer bills and coins need to be created to replace worn-out currency.
WHAT THIS MEANS TO BUSINESS
- While consumers are eager to embrace new technologies and methods of payment, they are not eager to see fewer options. So while cash may be in decline, we think it’s unwise for merchants to shift entirely to cashless transactions. More options are better than fewer.
- Will payments eventually migrate entirely to the mobile phone, which some call a universal virtual wallet? We doubt it (see above).