Instead of being replaced entirely, cash will continue to complement emerging payment methods. Don’t plan on throwing out your wallet any time soon!
New research outlined in Payments Journal (30/09/19) shows how consumers clearly depend on CASH as a payment method and that there is a core group who value cash over all other payment methods available.
Digital payment options have altered how we pay for purchases from plastic cards to APPs. In such an environment, you might think that cash is losing its place in the payments mix.
Despite the rise of digital payments physical cash remains popular, and a closer look at consumer trends reveals that cash and cards can and do co-exist.
The state of cash
Over the past few years, the use of cash has not changed significantly in the U.S. In 2018, 81% of respondents reported using cash “as often, or more often, than in 2017,” according to the 2018 Health of Cash report by Cardtronics.
The same report found that 28% of respondents listed cash as their preferred payment method, making it the second most popular method, behind debit cards at 37%, and also reveals that cash was used in 30% of all transactions, making it “the most frequently used payment instrument.”
The continued use of cash can also be seen in data on ATM usage. In 2018, 6 in 10 people (59%) reported withdrawing money from an ATM at least once a month, and interestingly even millennials are withdrawing cash at high rates.
The same report found that 53% of people aged 18 - 34 use ATMs at least once a month; and young adults are also more willing to try new features such as alternative payment methods.
But why cash?
Although there are many alternatives to paper money, the same report found that 73% of consumers still use cash regularly, indicating there’s something about this payment method that people find attractive. Here are the main reasons why cash is still very much alive:
- Cash is viewed as a quick payment method.
- Cash is a great way to learn financial responsibility. When consumers pay by cash it’s more concrete. They often have to count out the money, hand it over to the cashier, and, unless they’ve paid the exact amount, they then receive change back from the cashier. Such a process makes people more aware of their spending habits.
- 61% of people surveyed use cash specifically to help them stay on budget.
- The widespread acceptance of cash enables a larger segment of society to participate in the economy. Many local governments are barring merchants from not accepting cash because it may hurt low income individuals who are without alternative payment methods.
- There’s inertia - some people have been using cash for a long time they see no need to change.
- As fears grow over data breaches and personal data being compromised, cash offers a secure alternative.
The future of cash: coexistence in payments
Because of its popularity, cash is not going to become obsolete any time soon; people simply like cash too much.
Therefore the future of payments is one of plurality. According to research 92% of people like having the ability to use a variety of payment methods. This is because they want payment choice. The desire for choice stems from the fact that people’s preferred payment method varies based on the circumstances of the transaction.
And as fears grow over data breaches and personal data being compromised, cash offers a secure alternative. So, instead of being replaced entirely, cash will continue to complement emerging payment methods.
PiP iT's pay-in-person is an innovative solution that enables customers to shop online and pay offline at any UK Post Office. Cash payments with pay-in-person are completely secure and can be used by everyone.
PiP iT's pay-in-person can help online retailers reach a whole new audience, create loyal customers and grow their business. Visitors to your website who don't have a payment card, or who won't enter personal details online will now have a way to shop from you and pay with cash using pay-in-person.
Read the full article here: