Lots of people in the payments cards industry talk about cash and checks soon disappearing. I’d like to throw just a little cold water on this.

A few years ago, in the first edition of Paying with Plastic, Dick Schmalensee and I noted the seemingly inexorable trend towards electronic payments. We remarked on a visit I had made, this is in the late 1990s now, to the Massachusetts Registry of Motor Vehicles at the CambridgeSide Galleria near our offices. When I went to renew my license I was greeted by signs that said “We don’t take cash.” I thought that was pretty gutsy and a sign of things to come.

Well, I went today to renew my automobile registration which had lapsed. Like most men I went with my cards and cash but not checks. This time I was greeted by a sign that announced the Registry would only take checks and money orders for registration renewals. Luckily, there was a Bank of America branch around the corner where I got my first money order in the last couple of decades.

Now, mind you, the Commonwealth isn’t exactly on the cutting edge. The office had big CRT monitors and a sign that claimed that their computer system would go down if I used my mobile phone (it rang, I talked, there was no meltdown).

So perhaps this is the kind of weird fluke that happens in Massachusetts. I have no doubt that paper currency will gradually disappear. But I think folks should never underestimate the power of inertia in payment systems. Or even think that the people who matter—buyers and sellers—agree with us that plastic trumps the tried and true. People have been predicting the death of cash for fifty years now (if not more). And, cash must be remarking, plagiarizing Mark Twain, that the announcement of its death is premature. For some interesting quotes see my presentation, Paying with Plastic: Back to the Future.