U.S. Payments Modernization Is Taking a Toll on Cash

The combined effect of five payments trends is chipping away at cash reliance, finds a new report from Deloitte.

Increasing adoption of stablecoin payments, especially for cross-border payments, increased speed of transactions, using data standards to one’s advantage, agentic artificial-intelligence commerce, and employing AI to counter fraud are all shaping further digital payments, the “Shaping the future of payments” report from Deloitte outlines.

Services like FedNow and RTP, both real-time payment networks, are factors, says Nora Linkous, senior manager at Deloitte Consulting LLP. “Innovations like RTP and the launch of FedNow are meeting consumer demand for faster, more seamless payments. These systems enable 24/7/365 settlement, making cash feel increasingly outdated,” Linkous tells Digital Transactions News by email. The Federal Reserve’s FedNow raised its transaction limit to $10 million earlier this month, matching that of RTP from The Clearing House Payments Co. LLC.

Automated clearing house transactions are another factor. Nacha, the rule maker for ACH transactions, is considering raising the transaction limit to $10 million for same-day ACH payments, a significant growth area. The total value of same-day payments in the third quarter rose 15% to $970.4 billion, compared to the same period last year, according to Nacha. “Raising the same-day cap to $10 million could extend its relevance for high-value, low-urgency payments,” Linkous says.

Then there is the modernization of payment rails to the ISO 20022 standard for financial messaging that enables what Linkous calls “more secure, reliable, and interoperable transactions, reducing the need for physical cash in both consumer and business settings.” One goal is to create a universal messaging foundation. The standard is used in more than 70 countries, according to the Federal Reserve.

It’s not just internal changes affecting payments, but also outside factors, such as the burgeoning artificial-intelligence sector. Not solely a payments innovation, AI is affecting many elements of the industry. Agentic commerce, when an AI agent shops on behalf of a consumer, is just one. “AI-powered tools, including agentic AI, are beginning to automate and optimize routine payments. This spans utility bills to cash sweeps, further diminishing the need for cash-based interactions,” Linkous says.

AI also is having an impact on fraud use and fraud prevention. While criminals are employing AI tools to make their attacks more resilient to detection, payments companies, card issuers, and retailers are using them to counter the threat. The result, ideally, is better security. “Digital payments now offer superior fraud protection and verification methods (biometrics, tokenization, etc.) that often make them more secure and appealing than carrying cash,” she says.

Also, the recent declaration that the U.S. federal government would lessen its paper-check use helps with migration to digital payments, she says.

Stablecoin payments are gaining adoption, too, in part because of the recent GENIUS Act that helped clarify the legal structure of stablecoins and enhanced consumer protections for the currency.

Linkous says regulatory clarity and the ability to integrate stablecoins into existing financial infrastructure are two factors affecting its adoption. For stablecoin payments to grow, it will also require more know-your-customer, anti-money laundering, and cyber frameworks to manage risk, meet regulations, and maintain consumer trust, she says.

“Stablecoins will scale when they address real pain points such as high [foreign exchange] fees, slow cross-border settlement, or liquidity constraints, not simply when they are viewed as tech-forward alternatives,” Linkous says. “Wallets need to be easy to develop, deploy and be interoperable to avoid end-customer confusion.”

As she sums up, “There is a clear indicator that the U.S. payments landscape is diversifying and modernizing with ACH, RTP, and blockchain-based systems all pushing toward greater speed, transparency, and scalability. The real opportunity lies in orchestrating these systems around user needs and use-case fit.”