Saturday I heard a talk show host, rather unsuccessfully, trying to defend his position that a society where there was no cash, only credit cards would be used. I find the idea that this could happen interesting, but I really doubt it would ever happen for the following reasons:
1. Peer transactions. Yesterday I bought a couple bikes off some friends. Unless they had a credit card reader in their house, this transaction would have been much more difficult in a cashless society. How would kids pay for things? Can you imagine a 10 year old with a credit card?
2. Anonymity. People are skeptical of how much the government (or any organization) knows about them. There will always be a legal way to purchase things anonymously– at least there should always be a legal way.
3. Responsibility. Too many people dissociate real money with plastic. Cash is the only way many people actually realize they’re spending their money. Without cash, the amount of consumer debt would probably skyrocket (if that’s possible from how high it is already).
4. Tradition. All other reasons aside, I don’t ever see the day when people outgrow the natural desire to have cold hard cash. It makes you feel like what you worked for is real. It’s what people have done since the end of bartering and old habits die hard.
While technology has taken an obvious foothold in many areas of life and lots things are changing, don’t count on the day that cash will disappear for good.