Can Credit Cards Replace Cash?

by Bob

CoinsIt seems the magic plastic is now ubiquitous. Not only can you buy the bigger purchases, that big flat screen tv, the xbox, but now even drive through fast food joints are in on the act. I even heard rumors of a Coke machine doing the rounds that accepts credit cards, though I have yet to see one.

Could this be the end of cash?

I haven’t written more than a handful of cheques over the years, so I could safely say I could live without my chequebook, but cash is still very much part of my life, does it need to be?

Cash is a pain. It seems we are at the ATM more and more often. Even so, I am often caught without cash for parking, snacks and the few taxis who refuse plastic. Change is even more of a fuss, I usually just put it in the nearest charity box rather than carry it around with me.

While I wouldn’t want my daughter carrying around real spending power until she is old enough to be responsible with it, there are now charge cards that you can load up with limited funds that she could use instead for pocket money.

Transactions do not need the paper and coins, banks and businesses handle money flow digitally across the board. If even the humble vendo can take our card, what do we really need cash for?

It seems the main stumbling block is the card processing fees. For smaller business especially the fees on a $5 purchase are too high to make it worth it. While some people see mobile phone charging as the way forward for “micro payments”, wouldn’t it be in Visa, Mastercard and American Express benefit to look into how they can make smaller transactions economic?

Then we might finally see the back of the coin for good.