Source: Flickr / Images of Money.

A study released by MasterCard (MA -1.19%) early last fall noted that globally, cash is still king. Approximately 85% of all retail transactions use cash these days, something that MasterCard obviously frowns upon – noting that cash retail payments cost up to 1.5% of a given country's Gross Domestic Product. However, when all other transaction types are factored in, such as paying monthly bills, the total cash percentage drops to 34% of the total.

Of countries considered close to attaining a totally cashless economy, Belgium is first, with non-cash transactions topping 93% of its total transaction volume. The U.S., meanwhile, is only so-so, at 80%. Considered a "mature" economy, MasterCard Advisors don't expect much change here, so it looks like the 20% of transactions currently using cash will likely persist.

Certainly, it's fairly clear why payments giant MasterCard and its rival Visa Inc. (V -0.48%) profit when consumers move toward alternative payment systems. Processing all those electronic credit and debit card payments is big money, and increasing the share of non-cash activity will benefit them greatly. But, why, for consumers, is moving away from cash a good thing?

Cash: a dangerous proposition?
Beside that 1.5% drain on GDP – never explained in the study – what's wrong with using cash? Quite a lot, it seems. MasterCard Advisors claims that cash takes time to obtain, and is risky to carry around. Making too much use of cash apparently signifies "other economic problems", as well.

The association of cash with crime actually has some teeth. A recent study from the National Bureau of Economic Research examines the federal government's mandate in the 1990s directing states to transfer welfare benefits to recipients via electronic, rather than paper, means. They found a measurable drop in crimes motivated by the illegal acquisition of cash, which coincided with a national trend toward increased adoption of electronic payment methods.

But, cash has undeniable allure. Many people, for example, use cash as a way to limit their spending, and find appealing the fact that money is untraceable.

Advantages of a cash-free lifestyle
However, it's hard to beat the convenience of credit and debit cards – after all, look at how much bank customers still pay in fees just for the privilege of using debit cards, even though regulation has restricted banks' ability to levy these charges. Not having to carry cash can be a great relief.

For online purchases, cash is impossible to use, another negative. The convenience of paying bills electronically, without having to ferry bills and cash around is also very convenient.

Resistance persists
And, yet, people cling to cash. Mobile wallets are not really catching on, with security fears still prevalent. And, since the massive card breach at Target last year, consumers have become more enamored of cash than ever.

Even some in the financial sector think cash is safer than alternative payments. The chair of Signature Bank's board of directors recently told CNBC that the move toward a cashless system could abridge citizens' rights since monitoring electronic transactions is simple, whereas cash payments are untraceable.

Then, of course, there's the cash-based shadow economy, which has grown by leaps and bounds since the financial crisis. Valued at around $2 trillion, this alternate economy is believed to be where many of those unable to secure traditional employment have gone to continue putting food on the table.

Despite all the fanfare over promoting a cashless society, cash isn't likely to bow out of the economy – now, or ever. MasterCard and Visa will continue to flourish, there's no doubt, particularly as these two companies are at the forefront of the drive to increase card security through chip-and-PIN technology.

But cards and other alternative payments will stay just that – an alternative to cash. The green stuff is still king, and with its own special brand of utility and flexibility, it is likely to remain so.