Cash is gradually being replaced by debit cards, although it is likely to hang on for quite a while yet in many places. Debit cards have a number of advantages over cash. For a start it is harder to lose a debit card, especially if it is stopped quickly. Debit cards can be used abroad far more easily and more conveniently. It is also possible to benefit from the zero liability guarantees that are attached to debit cards issued by VISA and MasterCard.
If a card holder loses cash then they are highly unlikely to get that money back, unless it is handed in and the person can prove that the cash is theirs. If their card goes missing then they can get their card stopped and so the card user can lose far less than they would if they used cash. If this is returned in time then they can benefit from a zero liability guarantee.
A zero liability guarantee is a policy that both VISA and MasterCard have to limit the liability that the card holder has for unauthorised transactions. If the card holder has not had any part in the unauthorised transaction (for example by giving the card to the person who used it in a fraudulent way) and lets the card holder know that they have lost it in good time then there will be no liability arising from the unauthorised transaction.
There is also a benefit when people go abroad, as debit cards can be used in such a way that they can pay in the currency of the place where they are used but be billed in the currency of the bank account holder. As debit cards are accepted wherever the credit cards are used this means that with both VISA and MasterCard there are about 30 million shops and service providers that will accept these debit cards
As well as being able to be used abroad a debit card can be used for online, mail order and telephone ordering. This is clearly impossible with cash. This is particularly an issue with online transactions that are getting smaller and smaller over time. Debit cards on the other hand can be used very conveniently on line. Debit cards will not totally replace cash, particularly for smaller transactions. Cash also has the value of anonymity as many people do not like the idea that debit cards track their expenditure, which cash cannot.
