Why isn't cash obsolete?
A cashless world is coming -- just a lot later than we expected -- and it’s going to revolve around single plastic cards that provide currency, identification, security clearance and a whole lot more.
By Karen Hube
At the peak of the tech boom in 1999, techies raved about how cash was quickly going to become obsolete. Everyone, they said, would pay for things using cards embedded with microprocessor chips -- be it at the dry cleaners, the soda machine or the hotdog vendor. The hype was enough to propel some 2.2 million people to sign up for American Express’s “Blue” card, the first mainstream chip card geared for everyday purchases.
But the hoopla has tapered off since then, to say the least. The Blue card has proved no better than a competitive credit card with a hologram that looks cool.
So what, exactly, happened to the idea of the cashless society? Actually, analysts say, it’s still coming. The percentage of consumer purchases made with cash or checks has fallen from 80% in 1994 to 66% now, according to Frost & Sullivan, a Mountain View, Calif., market research firm. Credit and debit card usage has jumped from 20% to 29% of purchases, with debit cards accounting for much of that gain. Purchases made via phones and other technologies make up the difference.
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