Across the world, consumers are moving away from cash, instead using electronic cards to make transactions through payment processors – both in-stores and at online gateways. In the U.S., consumers are quickly becoming accustomed to living in a "cashless" society.
The United States is currently on the "tipping point", teetering toward becoming a totally cashless society, according to MasterCard's "Cashless Journey" report. Approximately 80 percent of domestic consumer spending was done without cash in 2011, and the report suggests that the cash payments making up the other 20 percent were primarily "a product of consumer habit."
"What seems to be overlooked in the policy dialogue is that cash takes time to access, is riskier to carry, and costs a country up to 1.5 percent of its GDP," said Peer Stein, the director of access to Finance Advisory Services at the International Finance Corporation. "We can't expect the journey from cash toward electronic payments to be completed overnight, yet driven by technological advances and public-private partnerships this trend has gathered significant momentum over the past few years."
Leaders in the U.S. are also hoping to move completely away from cash in the coming years, instead relying on "real-time" payment modes even if the implementation of such programs would take an extended amount of time, according to a recent report from Payments Source.
"We are mindful of lessons learned in other countries that implementing a faster payments solution requires years of hard work," said Sandra Pianalto, president and CEO of the Federal Reserve Bank of Cleveland, according to Payments Source.
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