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.
So what do these results tell retailers about the future of digital payments?
"Just as we don't see cashless being the new norm in the future, in the same regard, we can't imagine a world without expanded usage of digital payments," Tom Pierce, CMO of Cardtronics told FierceRetail. "Instead, we see the two service as part of a healthy mix of payment options for consumers." In fact, he says the new norm is in no way cashless, but a blended mix of payment options in today's fragmented payments landscape.
According to the report, 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.
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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.
Still retailers need to be aware that 66% of consumers think payment technology is moving too fast toward digital.
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.
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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.
And why cash? Convenience and ease of use make it a top choice for millennials. Cash is also a top choice because of security concerns associated with other payment types.
"It is clear that consumer shopping behavior is evolving in the digital, age, and our study found that digital payment options are advancing in some areas. However, more than 34% of those who don't use digital payments specifically don't because of concerns about data security," said Pierce. "And the national uproar over recent data breaches, such as the current situation all over the news tends to fuel consumers' distrust of anything digital."
Moving forward, it seems cash isn't going anywhere in the near future, as 82% of consumers would miss cash if it disappeared.