Digital Payments Surge, But the Decline of Cash Comes with Risks for Service Workers

When a customer at a local café asked if cash was accepted, University of Central Oklahoma student and barista Maya Rivera hesitated before answering yes. “Most people just tap their phone,” Rivera said.

Economists say Rivera’s experience reflects a broader national trend: the United States is rapidly becoming a low-cash economy.

“This is a deeper structural shift from cash payments to digital payments — mobile wallets, Apple Pay, Google Pay,” said Sohee Park, Ph.D., a UCO assistant professor of economics. “The medium-of-exchange role of cash is weakening.”

The Statistics

Federal Reserve data shows cash payments have dropped from 31% of transactions in 2016 to about 16% in 2023, while debit and credit cards now make up more than 60% combined.

Park said the COVID-19 pandemic accelerated this decline as lockdowns, online shopping, and fear of handling bills made digital payments the norm.

The Pros

The transition offers advantages for businesses and consumers. “Digital payments reduce the cost and risk of handling cash and make accounting more transparent,” Park said. Businesses also speed up service and reduce theft risk when customers pay with cards or phones.

The Cons

Still, the decline in cash is not without concern. Park highlighted the risk of leaving out vulnerable groups, from the unbanked to those less comfortable with technology. She also flagged systemic risks.

“If someday we have a blackout … all the transactions in the economy will freeze,” she said. Cybersecurity threats, she added, pose challenges that physical currency does not.

Another debate centers on whether physical coins still serve a purpose. As fewer transactions rely on small change, Park points out that the US penny is being discontinued, with the U.S. Treasury stopping production of the one-cent coin in early 2026. While the value of money would not change, the cultural and symbolic role of coins could fade.

The Need for Cash

For workers in food service, cash remains critical. Students who rely on tips say digital transactions often reduce their take-home pay. “If someone tips on a card, it takes days before I see it, and sometimes it gets pooled,” Rivera said. “Cash is instant.”

Park doesn’t expect the U.S. to go fully cashless soon. “Cash still matters as a backup payment and symbol of trust,” she said. But she believes the nation is on track to become a “low-cash” economy within the next decade — a shift that leaves open questions about who benefits, and who gets left behind.