Seriously, No More Cash in 2012

It turns out that 2012 is a kind of magnet for apocalyptic thinking. Justin Wolfers has predicted that the name Cash, currently riding a wave of popularity, will largely disappear by that date. Will actual cash — currency, greenbacks, dineros — survive much longer? David Wolman is the latest in a long line of people hoping the answer is no. While we’ve argued for ditching the penny, Wolman writes in praise of abolishing physical money altogether, in favor of a streamlined, emoney future. The technological solutions, he says, are in place. The policy solutions are, we think, another matter. [%comments]


No Way! I am using more cash these days...I can't trust gas stations to have safe card readers.

Paul Franceus

The ability to spend anonymously is very important. And not just for illegal purposes. Do we really want a record of everything we do with our financial lives?



You can have anonymous, electronic funds transfer. Back in 2001 when I lived in Belgium there was an electronic purse card called Proton. Many countries have something similar, where value is stored on the card, not in a banking system.

You could also buy high-value prepaid debit or credit cards to make anonymous purchases.


the ability to spend anonymously will probably still find a way to exist, even with the disappearance of cash. it's just a matter of finding another currency that has a value. for example, if you wanted to buy some illegal drugs from someone in a cashless society, what's to stop you from just buying a $50 Amex Gift Card and trading it for the drugs?


Will the homeless start carrying eMoney readers?


So, when the power goes out we don't get to buy groceries?


Not a fan. There would be an unintended consequence of creating a new class of "untouchables" - people who can't get onto "the system" in order to use e-money.

Also, cash has a quality that digital funds never can. It's a "bearer instrument", which is something that we actually need for the economy to function. If you can never hold money in your hand, you're excluding a surprisingly large segment of the population from potential productivity. I'd estimate that if the US cut over to digital-only transactions, it would cut the US GDP right about in half, give or take. You'd be surprised.


I try to use cash as much as possible and my cards as little as possible. Not only for tracking purposes, but for self-control. Let's say I'm at a bar. I start the night with $60. Once that 60 is gone that's a good sign it's time to pack it in. I've spent enough money. If I'm running a tab on a credit or debit card I can just keep spending and spending.

But also, anonymity. Plus, cash is still faster for small transactions. Rather than waiting for my card to be approved when buying coffee on the street I can just hand the guy exact change and move on. And that's not even considering the high fees charged by card companies. I don't want to pay extra money for small things just so we can get rid of cash.


I can't believe no one has mentioned the tooth fairy or the piggy bank!

Nine months of loose change was the basis for each of my kids savings accounts.

Sorting coins by denomination and year and tarnish level kept my OCD 4 year old occupied for HOURS.

What about flipping a coin?

Or convincing your kid brother that he should trade you his two small dimes for your two big nickles?

A digital world would just NOT be the same.


What would I do with for garage sales, parking meters, loaning friends a few bucks...and paying my contractor and mechanic in cash?


I seriously doubt this would work, especially in a time where people are loosing trust in the current monetary system.
If cash is abandoned gold might very well become a common mean of trade.


in addition to having some sort of safe secure way to pay digitally we would also need a safe way to be paid. If you want to have a garage sale would you have to get a credit card reader? The football pool at work? chipping in for pizza? any system needs to be as fast and as easy as throwing in a pile of money on a resturant table and the guy quick at adding up makeing sure there is enough to cover the tip

Sean F. Kennedy

The Freakonomics theme of unintended consequences:

No matter how much you say that you can still have anonymous transactions, the end of cash would create a rebirth in barter.

I see this coming from those low income consumers still not having access to as Wired put it "a ubiquitous and secure network of places where people can transact electronically."

Those who work in cash markets will likely find other ways to do business.


Seems like one of the Credit Card reform proposals (don't know if it made it into the final law) would allow merchants to charge credit card users the processing fees. Currently the merchant agreements with Visa & Mastercard technically don't allow them to charge credit card customers any more than cash customers, although I know this is common practice in other countries I've been to. But my point is that use of cash will likely see a resurgence if credit card users are suddenly getting stuck with an additional 3% fee on each transaction.

Tim James


If the power goes out now you won't be able to buy groceries -- the computer-based cash registers don't work too well when the lights go out.

Prediction: its not going to happen, at least not by 2012.


Clearly we will have an "embodied" cash system for a very long time (for all the reasons already stated -- and more).

BUT no one has brought up the fact that there are ideas about making all cash instantly traceable and DE-certifiable via RFID tags. Any piece of cash could be essentially "turned off" while in your pocket. "Turned off" cash could live in the world of the have-nots for a while until it traveled to a big enough retail outlet where it would be checked by the RFID equipped cash register and be declared worthless.

I worry about this semi-cash scenario.


In New Zealand cash is used increasingly less. Debit cards have been in high levels of use since I arrived here 11 years ago, and that has continued unabated. Many traders are glad to give you cash back with your purchase as it saves them the risk of holding it and the cost of depositing it at the bank.

Most bank accounts don't charge per transaction, so there is no disincentive to using electronic payment (other than the ability for someone somewhere to know where you've been). The system is fast at approval and adds minimal delay.

I seldom have more than NZD50 in cash in my wallet (approx USD30)

Dave C.

Ha, not for questionable transactions. Last time I used a credit card at Taco Bell, they surreptitiously added $1 to the charge without telling me. I only use cash there from now on. I've worked in retail before and most people who pay cash count their change and most people who pay with cards don't pay attention, especially now that you don't have to sign.


And of course the switch to eMoney cards would probably be accompanied by bank transaction fees being charged for every single purchase. It would be like an additional sales tax that goes to the banks.


On behalf of gigging musicians everywhere, let me just say that a 'cashless' economy will be very sad for those of us who prop up a tip jar at our place of business.