Don’t sell cash short just yet. At least with U.S consumers who still like to have some walking-around money in their pockets. As the following article reports, a recent survey indicates the cash remains popular over plastic and mobile payments.
Despite the rise in new digital payment options, it seems that cash still holds a strong place in the heart of the U.S. consumer. According to a new report from Edelman Intelligence and Cardtronics about the health of cash, despite a 16% increase in digital payments usage in 2017, cash is still the highest used currency among all age groups. Almost 9 out of 10 millennials say that they use cash regularly. In fact, 72% of respondents said they use cash regularly despite more payment methods being available, a 6% increase from 2016.
Still, 90% of consumers use at least two payment types per month and 66% use at least three payment types per month. And while 61% of people said their cash usage remained the same over the past year, another 22% said it actually increased. Person-to-person (P2P) payment was the driver for digital purchases, while other forms—cash, debit and credit—were used more frequently than P2P for in-store purchases.
And while 68% of consumers said they prefer cards or digital payments, cash is often used because it’s a backup that is available in a wallet. There are definitely some retail destinations where cash rules and others where digital is used more often. For example, cash is strongest in fast food restaurants, bars and c-stores, while larger purchases at grocery, pharmacy and mass merchants are made using cards. And coffee bars are still just about split down the middle, with some consumers using cash and others cards. Yet 82% of people said that cash is still a preference for smaller items.
There has been a 4% decline in the use of cash for items costing under $10, though 68% of consumers still shell it out for these smaller transactions. Almost 1 in 5 consumers (1 in 3 millennials) have recently used mobile order and pay, and 85% of them admitted they would prefer to be shopping in person than having it ordered and picked up in-store or delivered.
The survey concludes that consumers really like having options, as 89% appreciate having the choice to use a variety of payment methods. But still, cash needs to be one of these options, and 61% get upset when a retailer does not accept cash.
These survey results are not overly surprising, especially since many everyday purchases are for small dollar items from coffee shops and fast food restaurants. However, some businesses, such as Starbucks, are reporting higher mobile payment usage. But don’t expect a fast transition to cashless right now. Rising security concerns over data breaches may put a damper on more frequent use of payment cards, and many small merchants are still cash holdouts since they do not want to incur transaction processing costs.
Overview by Raymond Pucci, Associate Director, Research Service at Mercator Advisory Group
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