Cashless payments are already becoming the norm, with more people using mobile payments, digital wallets, and online banking to manage their finances.
While this shift makes things more convenient, it also brings some new challenges for credit unions. As cash usage continues to decline, credit unions need to adapt to the changing needs of their members.
In this post, we’ll take a look at some key stats about the ongoing move toward cashlessness and discuss what credit unions can do to stay ahead of the curve.
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Is Cash on Its Way Out? 10 Statistics to Know
To understand the full picture and nuances of an increasingly cashless society, let’s take a look at 10 key statistics on the cashless trend in the U.S.
1. Cash Usage Among Lower-Income Households
A significant portion of lower-income households still relies heavily on cash. According to Pew Research, 30% of Americans whose household income is under $30,000 say they use cash for almost all of their purchases.
Source: Pew Research
This number drops to 20% among households earning between $30,000 and $49,999, and a mere 6% among those earning $50,000 or more.
2. Baby Boomers and Cash Use
Even as digital payments gain popularity, Baby Boomers continue to favor cash more than other age groups.
According to the Federal Reserve Bank of Boston, they use cash for 40% of their transactions, significantly higher than the national average of 29%. However, their payment habits are shifting, with debit cards now making up 29% of their transactions.
Meanwhile, credit cards remain their least-used option, accounting for only 22% of their payments.
3. The Future of a Cashless Society
A significant portion of the American population believes a cashless society is on the horizon. According to Capital One, 28.3% of American consumers surveyed in 2024 believe a cashless society is very likely in the future.
Source: Capital One
4. Businesses and Cash Acceptance
The Federal Reserve reports that only 60% of businesses in the United States currently accept cash. This statistic highlights the growing reliance on digital and card payments, particularly as mobile and online banking services evolve.
5. The Unbanked Population
Despite the surge in digital payments, a portion of the population remains unbanked. The FDIC estimates that there were 5.6 million unbanked households in the U.S. in 2023, emphasizing the financial exclusion that can result from a move away from cash.
6. Annual Cash Transactions
Source: Clearly Payments
7. Average Cash on Hand
On average, Americans carry just $66 in cash. Empower found that this amount is relatively low, reflecting the increasing shift toward digital wallets and card payments in everyday transactions.
8. Racial Disparities in Cash Usage
There are notable racial differences in how cash is used. In 2022, 26% of Black adults and 21% of Hispanic adults reported using cash for all or almost all of their purchases, compared to only 12% of White adults.
This highlights how payment behaviors can vary across different demographics, with cash still playing a significant role for some groups.
9. The Rise of Mobile Banking
Mobile banking is becoming the primary method for many Americans to access their accounts. The FDIC reports that nearly half of banked households (48.3%) use mobile banking as their primary method.
Over the past decade, mobile banking use has surged nearly ninefold, while reliance on bank tellers has fallen by more than half.
10. The Reason Behind Carrying Cash
Things are becoming increasingly cashless, but there are still motivating factors making people carry cash. According to Empower, the top two reasons people carry cash are for emergencies (55%) and tipping (26%).
Cashlessness: What Does This Mean for Credit Unions?
The shift to a cashless society presents both opportunities and challenges for credit unions. Digital payments streamline operations, enhance member experience, and cut cash-handling costs, but also require heightened fraud protection.
- Fraud Protection Is Essential – As fraud methods evolve, credit unions must implement advanced security measures, secure mobile banking, and educate members on safe banking practices.
- Addressing Financial Exclusion – Not all members have equal access to digital banking. Credit unions should ensure inclusivity, particularly for unbanked and underbanked populations.
- Meeting Member Expectations – Members demand fast, seamless mobile banking. Offering real-time notifications, mobile check deposits, and easy fund transfers is key.
- Cost Savings & Efficiency – Digital payments reduce cash-handling expenses and improve operational efficiency, allowing resources to be redirected to higher-impact initiatives.
- Prioritizing Data Privacy – Protecting member data through encryption, strong authentication, and regulatory compliance is critical for maintaining trust.
- Leveraging Fintech Partnerships – Collaborations with fintechs enable credit unions to offer cutting-edge solutions like digital wallets, AI chatbots, and P2P payments.
By embracing digital transformation while addressing risks, your credit union can thrive in a cashless future.
Next Steps for Credit Unions
So, how can your credit union navigate this changing landscape? Here are a few key steps to ensure they stay competitive and serve their members effectively in a cashless world:
1. Meet Members Where They Are
Whether your members prefer mobile banking or in-person services, it’s crucial to offer a range of options that cater to their needs.
By providing both digital and traditional banking services, you ensure that all members have access to the financial tools they need.
2. Invest in Digital Banking Solutions
Embrace mobile banking, digital wallets, and other online payment solutions to provide a seamless and secure experience for your members. Offering cutting-edge technology can improve convenience and enhance member satisfaction.
3. Focus on Fraud Prevention
As digital payments become more widespread, the risk of fraud increases. Make sure your credit union is equipped with the latest security measures to protect members’ accounts and transactions.
4. Consider Financial Inclusion Initiatives
Ensure that your credit union provides resources for the unbanked and underbanked.
Offering financial literacy programs and affordable access to digital banking tools can help bridge the gap for those who might otherwise be left behind.
Step Into the Future with FLEX Technology
The cashless society is not just a possibility—it’s a reality that’s already taking shape.
As a credit union, staying ahead of this trend is essential to providing the best service for your members. By focusing on digital banking, fraud prevention, and financial inclusion, you can position your credit union for success in this rapidly evolving financial landscape.
Ready to take the next step? Download FLEX’s digital banking eGuide today to see how FLEX can help your credit union navigate the cashless future.
