Electronic Money Triumphs Over Cash & Checks
The long-predicted �cashless
society� has quietly arrived...currency, coins and checks are
receding as ways of doing everyday business. Some say that we�ve
become a plastic nation.
Although the government will
print about 9.1 billion individual bills in fiscal 2007, 95% is for
replacing worn currency...not to expand the supply.
Presently, plastic cards can be
used almost anywhere as the number of card-swiping terminals nearly
tripled to 6.8 million between 1999 and 2005. At the same time,
habits and mind-sets have changed. Consider that in 1990 most
Americans regarded paying for groceries by credit card as unnatural.
Now cards cover about 65% of food sales.
Plus there�s electronic banking
(83% of Social Security beneficiaries receive their monthly payments
by automatic deposit), internet buying, prepaid cards, and automatic
identity tags for toll booths
The Federal Reserve estimates
that from a peak of almost 50 billion in 1995, the number of checks
written in the U.S. fell to 36.6 billion in 2003, while the number
of electronic payments rose from 15 billion to 44 billion. In 1970,
the economy�s relative need for cash was almost twice as high as in
2006 which supported a $13 trillion economy with only $400 billion
The triumph of electronic money
reflects its origins in technology. In many ways it�s cheaper than
cash or checks. The Fed says that processing an electronic payment
costs a fifth as much as a check. It�s also more convenient as
people don�t need to run so often to the bank or ATMs for cash.
A dramatic change has taken
place over time that many do not even notice. Experts say we have
crossed a cultural as well as an economic threshold when plastic and
money became synonyms.