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Cash transactions are slowly going away

April 8, 2014 by · Leave a Comment 

More and more Americans are paying for their retail purchases with credit and debit cards. Use of credit and debit cards to pay for retail purchases accounted for more than 30 percent of all retail transactions in 2013 according to Barron’s Magazine. The U.S. Bureau of Engraving and Printing issued more than 8.4 billion notes including three billion worth of one hundred dollar notes in 2011. Still the use of cash in retail transactions is in decline. In 2002, just over 35 percent of retail transactions were in cash and by 2020 it is expected to drop below 25 percent. Using cash for retail transactions among wealthy Americans are almost non-existent and those who are earning more than $60,000 a year use it for about two percent of retail transactions. Debit card payments accounted for closer to 15 percent of all retail purchases in 2002 in the U.S. and by 2020 it is expected to lead the retail transactions accounting for more than 35 percent of all retail purchases.

The rapid rise of Internet sales is one reason why cash transactions are dwindling. Credit cards are dominating the Internet purchases. Cash will be the preferred method of payment for those without bank accounts and those who earn closer to $35,000 a year.

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