Cash Obsolete? Debit Cards, Credit Cards and Payment Apps

Has it dawned on you yet how you no longer use physical cash as a form of payment for your day-to-day purchases? This struck me the other day, after I noticed coins still sitting on my desk from a very small cash purchase I made a few weeks ago. At that point, I realized I had become like most Americans.  We now pay for majority of our purchases with debit and credit cards, and payment apps.

In fact, a survey from 2017, asked 1,000 consumers their payment preferences and it showed that 44% percent chose debit cards, 33% selected credit cards, and only 12% specified a preference for using cash. Consumers’ preference for credit cards decreased by 7% over the same survey's results from 2016, while the results for debit cards rose by 9%.

Now, the popularity of the debit card can be attributed to a few reasons. First, a debit card eliminates the inconvenience of going to an ATM and having to withdraw physical cash. Another reason why people may prefer a debit card is because it helps with budgeting. Individuals can monitor their account balance more closely since transactions reduce funds available.  People usually have a difficult time monitoring outstanding balances on credit cards. Although debit cards are the most popular, others may prefer credit cards. Many if not most credit cards offer reward points and a “buy now, pay later” functionality. Lastly, most debit and credit cards offer a security feature that will protect your funds from people attempting to commit fraud.

One payment preference we believe will continue to gain in popularity are payment apps. Many apps are already on the market such as: PayPal, Venmo and the Cash App.

PayPal may be a name many of you recognize since they handled many transactions for eBay. Today, PayPal allows you to transfer money to and from any U.S bank account as well as many foreign accounts. Transferring money is convenient and free, unless you are sending payment from a credit card or in foreign currency.

Venmo is a very common payment app created by PayPal. This program allows you to pay others you know directly from your account.  It also allows you to attach a social message. Need to split your dinner bill or pay your landlord rent, just Venmo them the amount and include a short message. Be on the lookout for expanded features, such as businesses establishing partnerships with Venmo to accept payment through their app. A recent example of this has been Uber accepting Venmo as payment.

Square Cash or commonly referred to as the Cash app is like Venmo.  This app is owned by Square, Inc. This app allows you to request or send money to others who have a Square Cash account. Just link your bank account or debit card and you can exchange money at no cost, with a few taps on your phone.

Although we only listed a few applications here, many other companies have come out with payment apps.  These programs make transferring money quick and simple. The day when you need to carry physical cash is quickly disappearing. Let us know if you utilize any payment apps that we did not discuss here.  And let us know how they make your transactions more convenient and life easier.


Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this article will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio.  Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Griffin Financial Advisors, LLC. The opinions expressed are those of Griffin Financial Advisors, LLC and are subject to change at any time due to the changes in market or economic conditions.


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