Cash Isn’t King Anymore

Published on: 08/05/2021

In this edition of Chart Talk, Tony Ogorek and Jeff Viksjo share their insight into what’s behind the shift from cash to payment cards and whether this trend will continue.




Welcome to another edition of Chart Talk. I’m Tony Ogorek and I am here with Portfolio Manager, Jeff Viksjo.  And today we’re going to be talking about cash and the fact that people don’t seem to be really interested in using a lot of it today to pay for their goods and services.  Jeff, let’s take a look at this chart, what do you see here?



The chart shows the share of payments made by each instrument type.  And you can see, there are some big moves happening on this chart. Payment cards is in yellow at the top, you can see it’s rising at pretty fast clip, and then below that is cash, and it’s falling at a very fast rate.  And you know Tony, there’s some big moves here and they’re not happening over 10, 20 years, this is happening just within the last 5 or 6 years.


So Jeff, I mean, what do you think is behind these moves?  Why do you think people are preferring payments cards, mobile, all these other electronic payments, in lieu of cash?



I think the first thing would be, is there are generational shifts occurring.  So the younger generation, which really never used cash, which always used payment cards, they’re entering the workforce.  They’re making money and therefore they’re spending money. So those payments are going all to payment cards.  And then older generations, I do think there is a convenience factor, and they’re starting to shift to payment cards versus using cash.



Hey Jeff and let’s not forget the pandemic.  We’ve got online sales moving up and you just can’t use cash for that.  Additionally, you’ve got the Coronavirus and people, I don’t think, want to be handing cash back and forth to people because of the concern that they could become infected with that.  Particularly in the beginning of the pandemic.  So, there are some contemporaneous reasons for this and there are some longer-term reasons for this.  What’s your outlook?  What do you think is going to be playing out?  Do you think we have plateaued or is this trend going to continue?


Yeah I mean cash has been on a steady decline and I think that’s going to continue.  But you do see that big drop last year from ’19 to ’20, which was the pandemic, and the question is just going to be is how much of that spending stays online versus going back in the stores?



Hey Jeff at the end of the day, consumers prefer convenience, and nothing’s more convenient that paying for something off of your phone or with a credit card, rather than having to go to a bank to get some paper to give to someone else.

So, hopefully you’ve enjoyed this edition of Chart Talk.  We look forward to seeing you soon.

Deprecated: preg_replace(): Passing null to parameter #3 ($subject) of type array|string is deprecated in /home/ogorek_dev_minerva/ on line 1745

Submit a comment below!

Your email address will not be published. Required fields are marked *


Sister Emily Bloom August 05 2021

It seems like the U.S. Treasury won't have too much business anymore printing out the paper money. (Sarcasm) But I can understand why people don't like to handle cash and anyone else's money at this time.