An article in ATM Marketplace, spurred on by a Javelin report, actually has a less dire title than the one above, which is “Will mobile card readers dethrone cash?” The article only indicates a 10% drop in cash usage is predicted.
The data indicate that traditional paper-based payments, including cash and check, are increasingly losing out to alternative payments. In fact, cash payments at POS terminals totaled $788 billion in 2013. That’s down $86 billion from the previous year, and Javelin predicts the total to drop to $711 billion by 2019, amounting to $100 billion in total sale volume loss over the next five years, according to the article.
This prediction is challenged by the next paragraph that recognizes consumers report continued use of cash.
“Even so, cash remains the most commonly used payment option for in-store purchases. Specifically, the report found that 65 percent of all consumers used cash to make a purchase in the seven days prior to the report’s release,” according to the article.
The merchant equation also driving this switch to alternative payments is the adoption of mobile card readers by small merchants.
“”For years, many small merchants have been unable to accept electronic payments due to high processing costs or an inability to support a traditional terminal,” Nick Holland, payments senior analyst for Javelin, said in a press release.
” However, with cost-effective options, such as mobile card readers offered by entities like Square, Intuit, and PayPal, more small merchants can now accept electronic payments. In light of this, Javelin forecasts cash’s dominance to be worn away even further in the coming years,” according to the article.
While high processing costs were identified as one reason merchants resisted card acceptance in the past, that concern is not identified as an ongoing problem to future card acceptance. While some have argued that card payments are less expensive than cash, few small merchants agree with that statement and are likely to prefer, if not require, cash at the Point of Sale.
Overview by Tim Sloane, Vice-President, Payments Innovation
To read the full story, go to ATM Marketplace.
