Is Cash Dead?

Snacks, sodas, and sandwiches line the shelves of the Amazon Go store. It looks like a normal place to grab a quick meal. But there are no cashiers in sight. To get in, you scan your phone at a kiosk. Small black cameras in the ceiling watch what you take off the shelves. When you’re done, you simply walk out the door with your items. A few minutes later, your phone buzzes with your payment receipt.

Amazon opened its first cashless market last year at its headquarters
in Seattle. Now there are also stores in Chicago and San Francisco. It’s part of a growing number of businesses that are ditching cash in favor of mobile payments. “People find it very convenient, particularly younger people,” says Kenneth Rogoff, an economist at Harvard University.

Between debit and credit cards and mobile payment apps, there are more ways than ever to avoid using coins and paper money. Could that mean that cash is becoming a thing of the past?

There are snacks, sodas, and sandwiches on the shelves of the Amazon Go store. It looks like a normal place to grab a quick meal. But there are no cashiers in the store. To get in, you scan your phone at a kiosk. Small black cameras in the ceiling watch what you take off the shelves. When you’re done, you simply walk out the door with your items. A few minutes later, your phone buzzes. You’ve received your payment receipt.

Amazon opened its first cashless market last year. That store is at the company’s headquarters in Seattle. Now there are also stores in Chicago and San Francisco. They’re part of a growing number of businesses that don’t take cash—only mobile payments. “People find it very convenient, particularly younger people,” says Kenneth Rogoff. He’s an economist at Harvard University.

There are more ways than ever to pay without coins and paper money. People can use debit and credit cards or mobile payment apps. Could that mean that cash is becoming a thing of the past?

Money has taken many forms over human history. People have used everything from rocks to shells to cheese as currency (see Strange Cash). In the 18th century, American frontiersmen paid each other in buckskins—the pelts of deer they had hunted. That’s why dollars are called “bucks” today.

But most societies have introduced some form of cash to trade for products and services. The first coins started circulating in Asia around 700 b.c. Paper money was invented in China around 1000 A.D. These bills were easier to carry around than heavy coins or other valuable items.

Credit cards, which allow people to buy something and pay for it later, started being widely used in the 1950s. Debit cards, which deduct money directly from a person’s bank account, took off a few decades after that. Today, swiping a card is the most common noncash payment method. But technology companies are coming up with more futuristic ways to pay

Money has taken many forms over human history. People have used everything from rocks to shells to cheese as currency. In the 18th century, American settlers paid each other in buckskins, or deer pelts. That’s why dollars are called “bucks” today.

But most societies use some form of cash to trade for products and services. The first coins were made in Asia around 700 B.C. Paper money was invented in China around 1000 A.D. Coins and other valuable items could be heavy. Bills were easier to carry around.

Credit cards gained popularity in the 1950s. They allow people to buy something and pay for it later. Debit cards took off a few decades after that. They subtract money directly from a person’s bank account. Today, swiping a card is the most common way to pay without cash. But technology companies are quickly coming up with more.

In 2017, a Wisconsin company called Three Square Market offered employees a new way to buy snacks in the office break room. After picking out their items, they would simply wave their hand at a scanner to check out. But it would work only if the employees first underwent a quick procedure: the injection of an electronic chip the size of a rice grain into the skin between their thumb and index finger.

The chips are programmed with a unique code that can be linked to a user’s payment information. The scanner reads the code through the person’s skin and charges his or her account. About 50 employees volunteered to receive the implant. “We see chip technology as the next evolution in payment systems,” the company’s CEO said at the time.

Not everyone wants a chip inside their body. But other cashless payment methods aim to work almost as seamlessly. Mobile apps like Venmo and PayPal allow people to send each other money with a few quick phone taps. Android and iPhone users can simply touch their phones to a store’s card reader to pay.

In 2017, a Wisconsin company called Three Square Market made an announcement. It was offering employees a new way to buy snacks in the office break room. First the employees would pick out their items. Then they would simply wave their hand at a scanner to check out. But it would work only if the employees first got an electronic chip implanted in their hand. The chip is about the size of a rice grain. A device injects it into the skin between the thumb and index finger.

The chips are programmed with a unique code. It can be linked to a user’s payment information. The scanner reads the code through the person’s skin. Then it charges his or her account. About 50 employees volunteered to receive the implant. “We see chip technology as the next evolution in payment systems,” the company’s CEO said at the time.

Not everyone wants a chip inside their body. But other cashless payment methods work almost as easily. Mobile apps like Venmo and PayPal allow people to send each other money with a few quick phone taps. Android and iPhone users can simply touch their phones to a store’s card reader to pay. 

In 2000, Americans made about 72 billion noncash payments, according to the U.S. Federal Reserve bank. By 2015, that number was up to 144 billion. Mobile payments still make up only a small fraction of those transactions. But experts like Rogoff expect the number to grow.

There are some downsides to going cashless. For instance, using cards and mobile apps makes it easier for companies—and your parents—to track what you buy. For many people, though, the convenience of cashless options outweighs these privacy concerns.

Rogoff thinks Americans will use even less cash in the coming decades. Many countries are already using less cash than we are, he says. China and India now have systems where people can pay with a fingerprint or face scan. “You don’t bring a card, you just put your fingerprint down,” says Rogoff. “In the future, your identity is cash.”

The U.S. Federal Reserve System tracks how Americans use money. In 2000, people made about 72 billion noncash payments, the Reserve found. By 2015, that number was up to 144 billion. Mobile payments still make up only a small number of those transactions. But experts like Rogoff expect the number to grow.

There are some downsides to going cashless. For instance, using cards and mobile apps means companies—or your parents—can track what you buy. But cashless options are convenient. Many people find that more important than privacy.

Rogoff thinks Americans will use even less cash in the future. Many countries are already using less cash than we are, he says. China and India now have systems where people can pay with a fingerprint or face scan. “You don’t bring a card, you just put your fingerprint down,” says Rogoff. “In the future, your identity is cash.”