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Last Updated on March 21, 2026 by Craig Allen Keefner

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Why keeping cash in the mix still matters for consumers, small merchants, and the self‑service systems that serve them

Scroll through the headlines and you’d think cash is already dead. Between mobile wallets, tap‑to‑pay cards, QR codes and “no‑cash” lanes, it’s easy to forget that simple paper money is still doing a lot of work in the background of the U.S. economy. For anyone who cares about payments, consumer choice and financial inclusion, cash is not nostalgia—it’s infrastructure.

Cash use is down, but not gone

The Federal Reserve’s latest Diary of Consumer Payment Choice shows that in 2024, cash accounted for about 14% of all U.S. consumer payments by number. Consumers made an average of 48 payments per month, of which seven were with cash—a level that has been essentially flat since 2020. In 2023, cash’s share was 16% and it was still the third‑most‑used payment method after credit and debit cards.

Zoom in on small‑ticket transactions and cash looks even more relevant. For purchases under about 10 dollars, roughly half of payments still happen in cash because it’s faster and often easier than pulling out a card or phone. And despite the hype about going fully cashless, almost 90% of consumers used cash at least once in a 30‑day period in recent Fed surveys.

Who relies on cash the most?

Cash isn’t evenly distributed across the population—it’s doing the heaviest lifting for people with the fewest alternatives. Lower‑income households use cash for a much larger share of their everyday transactions and bill payments than higher‑income households, in part because they have less access to credit and sometimes even to traditional bank accounts. Adults in the lowest income brackets use cash for around 16% of their bill payments, roughly matching checks and exceeding the cash use of all higher‑income groups combined.

Age matters too. Consumers 55 and older rely on cash for about 22% of their payments, roughly one‑and‑a‑half times the rate of younger adults. At the same time, people across age groups keep more cash on hand than before the pandemic—on‑person and “store‑of‑value” holdings remain elevated because cash is still the go‑to backup when things feel uncertain.

Why the payments industry should care

For the payments industry, it’s tempting to view cash as competition to be displaced. But cash plays several critical roles that digital systems still struggle to replicate:

Offline resilience: Cash works when networks are down, terminals fail, or disasters take out power and connectivity.
Instant, final settlement: A cash sale clears on the spot with no chargebacks, reversals or third‑party failures.
Zero marginal fees: For small merchants, there is no per‑transaction interchange hit on cash, which matters when margins are razor thin.
Privacy and autonomy: Some consumers deliberately choose cash to avoid data trails on sensitive purchases or just to better control their budgets.

The Fed’s own research frames cash as a “back‑up” payment instrument that consumers expect to remain available; many say they carry cash even if they don’t use it often, precisely because they want that option.

The policy backdrop: “must accept cash” and swipe‑fee fights

That’s why debates over cash acceptance and card fee rules are not just inside‑baseball for lobbyists. Several states, including Colorado, have moved to require most retail establishments to accept cash so that people who depend on it aren’t turned away at the counter. At the same time, legislators are pushing back on credit‑card “swipe fees” being charged on the sales‑tax portion of a purchase, arguing that merchants shouldn’t pay card fees on money they’re merely collecting for the government.

This is where VISA/MC charge fee based on total transaction, including taxes we pay. Nice work if you can get it?

Financial institutions and card networks are fighting some of these changes hard, warning about complexity and unintended consequences in digital payments, while small‑business advocates and merchant groups argue that controlling fees and preserving cash acceptance is essential to keep costs down and options open.

A “cash‑inclusive” future, not a cashless one

If you work in payments—whether that’s card acquiring, POS, kiosks, or digital wallets—the most realistic future is not cashless; it’s cash‑inclusive. The data show a slow shift toward cards and digital options, but also a stubborn, stable base of cash use that hasn’t gone away even after a pandemic‑driven digital acceleration.

Designing systems, policies and fee structures that respect that reality is both good business and good public policy. Consumers are telling us they want choice: tap‑to‑pay when it’s convenient, cash when it’s safer, simpler or the only option that actually works for them.

Numbers Are Good

cash usage global

Addendum — What is Going On In Colorado?

Colorado already has a law saying most retail businesses must accept cash, and the current big dust‑up in ads is actually about credit/debit card “swipe fee” legislation, not banning cash itself.

Existing “must accept cash” law

Since 2021, Colorado law requires retail establishments that offer goods or services to accept U.S. currency for purchases.
Exceptions include: fully automated businesses with no person taking payment, places that offer a free cash‑to‑card kiosk, certain security‑deposit transactions, and banks/credit unions.
A violation is a petty offense (fine up to $250), so on paper Colorado is one of the stricter “you must take cash” states.

In 2022, enforcement and definitions around this requirement were clarified and the attorney general was given authority to bring actions to enforce it.

What’s happening now: swipe‑fee bill (SB26‑134)

The current flashpoint is Senate Bill 26‑134 in the 2026 session, which targets payment card network fees on the sales‑tax portion of a transaction.
The bill would prohibit credit/debit card networks from charging interchange fees as a percentage of the full amount when that amount includes taxes, and from raising fees on the non‑tax portion to get around the rule.
It exempts smaller card issuers (under about $60 billion in assets) and lets merchants or consumers sue networks that violate the rules.

Supporters pitch this as “stop charging swipe fees on taxes” so small businesses aren’t paying card fees on money that just goes to the government.

Why the ads sound so strange

Banking and business groups argue SB26‑134 is really a mandate on how private payment networks price transactions, and that big national retailers would capture most of the savings.
Critics warn it could force technical workarounds (e.g., splitting tax from the main transaction) that make cards less convenient, increase other fees, or shift costs back onto smaller banks and credit unions.
That gives us the weird ad language: some spots frame it as “politicians messing with your credit cards” or “helping mega‑chains,” while others frame it as “standing up to junk fees” and “helping small business.”

None of this repeals the requirement that most retail establishments accept cash; that law is already on the books and still in force.

There’s also a 2026 bill (SB 117) reacting to Colorado Lottery rules that would allow buying lottery products with credit cards.
Legislators sponsoring SB 117 want to keep lottery purchases limited to cash or debit only, arguing it’s irresponsible to let people use credit for gambling when costs of living are high.

who is financing the ads against

Most of the organized opposition (and likely a big share of the ad money) is coming from banks, credit‑card networks, and their aligned trade groups, plus some business organizations that have sided with them.

Main groups behind the opposition

Banking and credit‑card interests (large banks and issuers, card networks) are the core organized opponents, because interchange (“swipe”) fees are a major revenue source and they oppose state‑level limits on how fees are applied.
Trade associations tied to financial services and electronic payments are running “protect digital payments/keep transactions simple” style campaigns; for example, the Electronic Transactions Association has been promoting “oppose SB 26‑134” content that looks and sounds like small‑business ads.
Some chambers of commerce and business groups, including the Denver Metro Chamber and others, have testified or published pieces against the bill, arguing it interferes with private contracts and will ultimately hurt small businesses even if big‑box retailers benefit.

How that shows up in ads

Because direct “paid for by Visa/Mastercard/big banks” messaging is politically unpopular, a lot of the creative is branded as speaking for “small businesses” or “local jobs” even though the policy position matches what the banks and card networks want.
At the same time, there is a pro‑bill campaign funded by small‑business advocates like NFIB Colorado and some restaurant and retailer associations, so we may be seeing dueling spots that both claim to represent Main Street while taking opposite sides.

Resources

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