The country of Sweden is close to becoming a cashless society. Four out of five purchases in the Scandinavian country are now paid electronically or by debit card. Some believe “A reduction in cash use would cut cash-handling costs and lead to a decline in armed robberies.” Others believe a cashless society would threaten individual freedoms, giving governments ways to exercise “control over all human behavior.”
But that’s Europe. American consumers are using cash more frequently now, especially for small purchases like food and personal care supplies. (The average value of a cash transaction is $21, about half the average value of a debit card transaction.) According to research conducted by the U.S. Federal Reserve System’s Cash Product Office, cash accounts for 40 percent of all monthly payments for the average American. Those with annual incomes under $25,000 were more likely to use cash than those with higher incomes, and also more likely to say that they preferred paying in cash. “That’s probably because many people with little income have trouble getting access to other types of payment,” said Barbara Bennett, vice president and chief strategist for the Federal Reserve System’s Cash Product Office.