Will cash payments soon become extinct?

(Patria) - Narratives about the "death of cash" have been around for years, but in 2025, the picture is more nuanced: cash has not disappeared anywhere, but in an increasing number of countries it is becoming secondary – and digital payments (cards, mobile wallets, and "instant" transfers) are emerging as the primary option.

Globally, the number of cashless payments continues to grow strongly, with "instant" transfers and e-money seeing a particular surge. Market reviews indicate a continuous decline in cash usage through indicators such as ATM withdrawals, alongside an accelerated growth in transfers and e-money, writes BiznisInfo.ba.

In the Eurozone, consumer preferences are shifting: in 2024, 55 percent of citizens stated they prefer to pay with cards or other cashless means in stores (22 percent prefer cash), while the majority still want cash to remain available as an option.

In the US, the Federal Reserve's "Diary of Consumer Payment Choice" shows that cash's share fell to 14 percent of all transactions in 2024, with cards accounting for about two-thirds of payments by number.

What stage are we in?

Countries with developed real-time infrastructures and mobile wallets have entered a mature phase of low-cash economies; others are in transition; and some markets remain "cash-intensive".

In the Eurozone, cash is still the most common payment method by number of transactions, but its share is rapidly declining (ECB estimates for 2024 suggest around 52 percent of transactions in cash compared to 59 percent in 2022).

Sweden is practically "digital-first", with only one in ten store purchases paid for in cash, although authorities have emphasized the resilience and availability of cash.

Most popular payment channels today

– Cards (physical and "tokenized" in mobile phones) remain dominant in retail and online. In the US, they account for about 2/3 of payments by number; in the Eurozone, they are the preferred choice.

– Mobile wallets and QR codes: China is massively "mobile-first" (Alipay/WeChat Pay are used by hundreds of millions of people; combined, they account for over 90 percent of mobile payments).

– Instant payments: Pix is a national phenomenon in Brazil (over three-quarters of the population uses it; it is expanding to automatic payments). India is breaking records through UPI. The US is expanding FedNow (1,300-1,400 banks have joined). The EU has adopted the Instant Payments Regulation, obliging banks to offer them 24/7.

Who is leading?

In this process, Nordic countries (Sweden, Norway) generally lead: the smallest share of cash, high penetration of cards and mobile solutions; infrastructure and legal measures still ensure "cash fallback".

China has the deepest integration of mobile wallets into everyday life (QR payments, super-apps). India and Brazil are global leaders in real-time payments (UPI, Pix) with huge numbers and a strong impact on financial inclusion and merchant costs.

The main advantages of digital payments are convenience and speed (tap-to-pay, QR, instant), lower costs for merchants (especially with Pix/UPI), better record-keeping and fight against the shadow economy, and financial inclusion (mobile money and real-time transfers open doors for unbanked users). Examples of Pix and UPI show how state platforms can reduce fees and expand reach.

However, the process also brings numerous challenges. These primarily include privacy and surveillance (every trace is digital), digital exclusion (elderly, rural, low-income individuals), operational risk and resilience (network outages, cyberattacks – which is why many countries keep cash as a reserve), market concentration and fees (dependence on card networks/big tech platforms), and geopolitical tensions surrounding domestic payment networks.

Sweden and Australia explicitly emphasize that cash must remain available for crises.

Will cash become extinct – and when?

The short answer: not soon. Although the share of cash in many countries has fallen to single-digit or low double-digit levels, most of the population still wants cash to exist as an option – and some governments are even introducing mandatory acceptance in key sectors (e.g., Australia from January 1, 2026, for essential services).

Forecasts from major consulting firms suggest the decline will continue, but not linearly and not equally everywhere; global cash usage in 2024 was around 80 percent of 2019 levels and is decreasing by about 4 percent annually.

Even in the "most digital" countries, cash remains a strategic reserve and a social safety net – so a gradual decline rather than complete disappearance is a more realistic expectation.

In practice, "functional cashlessness" (where cash exists but we rarely use it) could become the norm in many developed economies by the end of this decade, while globally cash will persist into the 2030s due to income structure, infrastructure, and habits.

Therefore, digital payments are winning in terms of convenience and cost; cash is losing ground but remains crucial for resilience and inclusion. Instead of the "death of cash," a long sunset is more likely: increasingly rare use, with regulatory protection of its availability.