Busking at the Times Square subway station is now mostly digital. A quick look at the hats placed in front of performance will show how little they earn in cash. Instead, buskers now brandish large QR code displays that direct patrons toward Venmo or Zelle accounts.
Shane Hill, a busker who regularly plays popular tunes on the saxophone at the station said he earns more through digital payments than in cash.
“I used to make a lot more in cash, but now it’s mostly digital,” he said. “I think people are just carrying less cash.”
The shift to digital payments is not just a New York phenomenon. The US is producing less cash than it has in decades. The Federal Reserve has been producing fewer notes and coins since 2015, and the trend has only accelerated since the pandemic.
The US produced 5.7 billion notes in 2021, down from 7.6 billion in 2016. Coin production has also fallen, from 17 billion coins in 2015 to 12 billion in 2023.
This is a result of the drastic decline in the number of cash payments made by consumers in the US.
Cash payments are on the decline
During the pandemic, opportunities to use alternatives to cash increased dramatically. According to the US Federal Reserve, cash payments accounted for only 18 percent of all payments made in 2022. Credit cards were the most favored payment mode by the public in the same year, making up 31 percent of all payments.
According to the Fed, consumers are now making more purchases online than they did before the pandemic. This shift away from in-person payments has resulted in fewer
opportunities to use cash.
In contrast to 2019, there were less payments of less than $25 in 2022 as a result of the shift in customer purchasing behavior. For these kinds of payments, cash has historically been utilized more frequently, as per the Fed.
According to the latest Euromonitor International data, the number of ATMs in the U.S. in 2023 was 447,800, a 4.7 percent decline from 2019. During the same period, ATM fees have risen an average of 10 percent.
A system that incentivizes electronic payments and makes cash withdrawals difficult has made cash circulation challenging.
A group of coin industry representatives also formed the U.S. Coin Task Force, which launched an investigation into the circulation challenge, and launched the #GetCoinMoving campaign. Despite these efforts, the coin circulation challenge continues to create issues for banks, merchants, and consumers.
