Changing Attitudes About Money Will Shape the Future of Cash

March 14, 2019

When I was growing up, a child of the 80s, people who paid with plastic seemed to be in a higher echelon. Credit equaled status. Today, that may be changing. It’s cash, not credit, that carries the real cachet.  

Even as technology seems intent on pulling us away from paper money and toward digital coins, Americans appear to be enjoying a renewed love affair with cash. Why? I suppose it could be the frequent cameo appearances of “fat stacks” in music and YouTube videos. But more likely, it’s a Millennial-driven distaste for debt.  

For many in the younger generation, sliding a card into the waiter’s book is a terrible way to finish off a meal. Watching their parents get into credit card debt – and struggling with their own massive student loan burden – has left something of a bad taste in their mouths. Just one out of three Millennials carries plastic. And, if they do carry a card, it’s most likely debit or prepaid (each of which is really just cash in plastic form).  

For businesses, changing attitudes about money may shift the way they, too, value cash.  

Paying employees by check, for instance, is becoming less popular. Not only do workers appreciate not having to make a deposit; they also like getting that cash faster. It’s one of the reasons we’re seeing dramatic month-over-month increases in use of the ACH system.  

As more Millennials launch and lead businesses, will their debt and risk aversion be a positive or a negative? Some young people have seen as many as three major stock market crashes already. They may have a hard time trusting public markets with their investment dollars.  

The increasingly loud cry for credit card surcharges among retailers is another area we see the impact of cash love among consumers. The last thing retailers want to do is chase away business, especially the brick and mortar type. If they are willing to charge a fee for using a credit card in their store, they must be pretty confident their customers are okay paying with cash.  

Millennials are also said to prefer experiences over stuff. Chances are pretty good this will have an impact in both business-to-consumer and business-to-business sectors. Employee incentives, for instance, may shift from gold watches to more PTO.  

If you are a business leader who believes Americans’ renewed love affair with cash is likely to impact your financial outlook, make a call to the cash management leaders at your bank. They are studying the trends, watching the shifts and managing the evolving cash needs of their clients every day. With a front-row seat to the impact of changing attitudes about money, they are in a terrific position to make your cash work for you.