Now that so many people have mobile phones it makes perfect sense to print less banknotes and use phones as digital wallets.
Perfect sense to the currency issuers and banks, who stand to save on costs associated with the production, transportation and security of physical cash, but less so to the actual users themselves. There are still numerous situations where using physical cash is still superior to digital wallets such as-
Ease of use- there is literally nothing simpler than me handing you the money, you handing me the goods. No fiddling with passwords and praying that the authenticating servers are online. Or worrying about batteries going flat in mobile phones.
Secure medium of storage- Paper money stored properly can last for on average 15 years. I have doubts whether any electronic wallet are as long lasting, not to mention the associated difficulties of maintaining your device, the apps or encountering the horror of corrupted wallets.
Easily divisible- Say my kid needs 10 bucks to buy ice-cream. I peel off a bill and hand it to him. You can't do that with an electronic wallet AFAIK.
My point being that at least in the near future, I see physical cash still playing a major part in our lives.