I recently visited the American History Museum in Washington D.C., and the display I found most fascinating was one that documented the history of consumer credit from the 1950s onward. By the 1960s, credit cards had proliferated to such an extent that, even then, speculation was rife over whether cash would soon become a thing of the past. A cartoon printed in The New Yorker depicts a businessman visiting a restaurant with signs prominently displayed everywhere, assuring customers it accepts any number of credit cards as payment. “Do you still take cash?,” asks the diner.
Yet, a half century later we are still actively using cash. That is not to say things haven’t changed immeasurably in the past 50 years – technology has allowed us to become more interconnected than ever before and, as in many other areas of life, consumers expect to be able to manage their money in an intuitive, immediate and inspired way. As cash remains an important form of payment, the challenge becomes how to evolve the ways consumers interact with it. How are preferences shifting, how will they continue to change, and what can financial institutions and other providers do to adapt?
Consumers still value cash security, but want cardless ATM options
Fiserv data shows how much cash remains a mainstay of the American payments landscape; a study released at the end of last year found 80 percent of all age groups reported using an increased amount of cash or the same amount of cash in the past 12 months. Even 77 percent of tech-savvy Early Millennials reported their cash usage either increased or stayed about the same.
Other insights from another of our consumer surveys found cash is still considered the most secure payment option. Forty-two percent of respondents agreed with this statement (ahead of swiping a debit or credit card, a mobile payment, a check or a chip card). Possibly contributing to this sentiment is the fact that, in 2017 alone, 5.5 percent of consumers experienced some type of card fraud. Consumers are growing increasingly security conscious as the media reports hacks and data breaches on a regular basis. Past experiences also influence consumers’ growing use of mobile alerts with 43 percent saying they receive alerts because they have experienced fraud in the past.
At the same time, Fiserv research indicates a growing interest in the potential market for cardless ATMs appears to be strong. When asked, “If you could obtain cash at an ATM without having to use your debit card (e.g., typing in a special number and PIN or a code on your smartphone to access the ATM instead of your debit card) would you do so?,” a small number of respondents (7 percent) have already used this service, and nearly four in 10 (37 percent) say they are interested in doing so.
Important in an emergency, or for simple convenience
With cardless cash becoming desirable for consumers to access their funds whenever and wherever they want, financial institutions will need to follow this demand in order to stay relevant. Today, 77 percent of U.S. adults own a smartphone, which makes integrating cash access into smartphone offerings a natural progression. Some of the scenarios where consumers may prefer cardless cash access include:
- Emergency cash: If a consumer loses or forgets their wallet, they can still access cash immediately without a physical card (imagine a scenario where you are out of town and you cannot find your card).
- Interim access: A consumer can access cash while awaiting a new card to be issued or for a lost, stolen or breached card to be replaced.
- Convenience: Sometimes it is simply inconvenient to carry a wallet or card, for example when going running or visiting the beach.
To retrieve cash without a physical card, consumers obtain an access code in one of several ways – including through their financial institution’s call center, or self-generated via a mobile device. After receiving a code, the customer can then access the funds through ATMs (locators on smartphones can pinpoint nearby participating ATMs) or through retail locations that offer customer service center redemption sites.
Aside from the convenience factor, the technology can help further mitigate fraud. With tokenization neither an actual card nor account number is being used, which adds another layer of security. A pseudo card number, and one that is not tied to the debit or account number, can go a long way toward fighting fraud, particularly since a unique token is used for each transaction. For example, if I want to withdraw $200, I set the new token or access code to $200 and immediately use it. If anyone tries to use the token or access code after my transaction, the next attempted transaction will be denied.
The evolution of cash access
While usage of digital and card payment channels continues to rise, there are times when cash is still needed. Some consumers may use cash to manage spending or they may prefer cash to repay a friend for dinner or a movie. Plus, everyone has encountered merchants who only accept cash, including toll booth operators, street-fair vendors and rummage sale organizers. These are the times when consumers expect their financial institutions to be there for them, offering technology to access cash without returning home to retrieve a forgotten wallet or waiting for a card to be replaced.
Life moves fast. People rush out of the door, forgetting their cards and cash; they leave a purse behind in a restaurant; their wallet is lost or stolen while they are out of town; or they simply do not want to carry a wallet or card with them but still expect access to cash. To satisfy consumers, financial institutions will need to offer cardless solutions – allowing them to keep pace with the evolution of cash and respond to people’s needs anytime, anywhere.
 Fiserv Household Finances Survey, October 2017
 Fiserv Household Finances Survey, April 2018
 Javelin, “2018 Identity Fraud: Fraud Enters a New Era of Complexity,” February 2018
 2017 Pew Research Center