Can Real Money Survive The Digital Age?

People have been predicting the end of cash for decades. With the rise of applications such as Apple Pay and Swish, contactless debit cards, online banking, and crypto-currencies like Bitcoin, it seems like the grim reaper of finance is getting closer and closer. But while physical money may feel like a thing of the past, it's still very much alive and unlikely to give way to the digital age anytime soon. There's a reason why it's survived for so many thousands of years... because it's safe and untraceable.

Digital payment systems have many benefits, but convenience alone won't be enough to phase out physical cash altogether. Until technology can provide greater security, it will always be lagging behind. Here are some other reasons why cash will make it through:

The U.S. Dollar is Expanding Substantially

Contrary to popular belief, money isn't dying, it's actually expanding. U.S. Dollars increased in circulation by 42 percent between 2007 and 2012, and the currency expected to grow by an average of five percent annually during the next few years. While on the surface it may seem like money is losing traction because it's not "seen" out in the real world as frequently as it was, most people don't consider the reserves that aren't in circulation and stored abroad -- almost two thirds of American dollars are in other countries!

Even Europe's Most Digital Countries Can't Shake the Coin

Even countries like the Netherlands, Denmark and Sweden, which are embracing the cashless system in a massive way, still can't shake the coin. Holland has over 1,400 supermarkets with cashless registers; and in Stockholm even the homeless have debit card machines. While digital payments continue to grow in these countries, cash is still number one.

People Trust Hard Cash More Than Technology

Physical money has survived because it's reliable, easy to carry and widely accepted. Electronic systems are convenient, but they do have their downsides: there's more room for error and it leaves a digital trail. Strangely, the closest currency to "real hard cash" is the Bitcoin as it can be virtually anonymous. However, it's also extremely unstable and the vast majority of people simply don't trust it. You can't distrust hard cash; that's why so many people store it in case of an emergency. Look what happened in Iceland with the financial crisis... money just vanished. A wad of stored cash will always be there.

Some Industries Rely On Coins To Survive

Believe it or not, there are some industries that would crumble without hard cash. Imagine how charities would be affected if the penny went extinct. It would make fund raising very difficult. When the Danish government released a proposal to limit the flow of cash by 2016 -- something that was taken VERY out of context -- vulnerable companies flipped out. And then there's service professionals, such as waiters and waitresses, who rely on tips to boost their low-paid income. Fundamentally, a cashless world would be detrimental to the poor.

Cash Has A Higher Psychological Value Than Numbers

Contactless technology and movable digital money is great, but the psychological value of cash is much higher. When we go into our overdraft and see that "minus" sign on our accounts, we feel cheated. But imagine how much worse it would feel if the banks turned up on our doorsteps and rummaged through our belongings. Cash feels rich, it's harder to part with, and it's harder for banks (and us) to take.

People Still Crave Human Interaction

The self-service industry has been forced upon us. For example, charges are often incurred to those who don't deal with their finances online through digital channels. According to Contact Telephone Numbers companies are striving to limit human interaction because "dealing with queries by phone (or in person) increases expenditure on staffing and reduces profit margins." But with the advent of new self-service technology, particularly in the banking sector, the demand for the older and more personal approach is increasing simply because of the trustability factor.

Real money will survive the digital age because we have no choice. While mobile banking and technology has made the process of using hard cash more convenient, and may even overtake it as a primary payment method in the not-so-distant future -- which would be a welcome change -- it will never completely replace it. Therefore, to say cash will go extinct simply isn't realistic.