The penny may not vanish tomorrow, but the federal government’s decision to phase out the one cent coin is raising fresh questions about the future of tangible currency in America.
While many point to online shopping, tap-to-pay, and digital wallets as the culprits behind cash’s decline, UNO economist and business professor Mark Rosa says the journey actually began much earlier.
“The real game-changer was the debit card,” Rosa explained. “It gave people who couldn’t get access to credit cards a way to move away from carrying cash and coins. From there, the shift only accelerated.”
That shift has now grown to include Apple Pay, Google Wallet, auto-pay systems, and more. These tools make paying digitally nearly effortless. Rosa notes that in some global markets, governments and businesses are moving even faster to reduce or eliminate physical money altogether.
"In China, everyone has a debit card, every merchant has an interface to receive it. Even a vendor selling a piece of fruit on the street."
Why? Rosa points to three main reasons: traceability, which makes it easier to track transactions; security, which reduces fraud and theft; and cost savings, since minting and printing money is an expensive process.
For now, your pockets may still jingle with change, but the Fed’s move on the penny is a reminder that the era of coins and bills may be inching closer to its end.