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HOUSTON — Today's consumers have a number of payment options at their fingertips, from cash and cards to mobile wallets and person-to-person (P2P). However, a "new norm" is emerging as consumers embrace a blended mix of payment options.
Defining their which payments are most convenient for them, consumers are embracing cash, card, digital, and mobile ways to pay, with 85 percent using at least two different types of payment methods each month and 55 percent using at least three, the "2016 U.S. Health of Cash Study" by Cardtronics found.
Cash remains the most commonly used form of payment in brick-and-mortar stores at 89 percent vs. 74 percent for debit cards, 66 percent for credit cards, 18 percent for store mobile apps, and 17 percent for mobile wallets.
The study also found that 56 percent of consumers use cash as frequently as they did one year ago, and 23 percent are using it even more frequently.
"Consumers today desire and demand more payment choices in their financial lives to make life easier on their terms," said Jonathan Simpson-Dent, chief commercial officer for Cardtronics. "And while emerging digital and mobile payment technologies are on the rise, the pace of adoption is sensible. Cash continues to be commonly used at the point-of-sale and is the runaway choice for P2P payments, with 79 percent of consumers overall — and 73 percent of millennials — preferring to pay back friends and family with cash over P2P payment apps, which came in at 10 percent."
Here are more findings of the Health of Cash Study:
Millennials. Now the largest and most tech-savvy demographic group, millennials are using all the major payment methods more frequently than they did a year ago, except checks. And despite the continued increase in the number of payment options, 67 percent of millennial digital payment users still use cash regularly.
Method by occasion. Whether consumers prefer cash or another payment method usually depends on the specific occasion. Cash continues to dominate (79 percent) P2P payments in general, and on specific occasions like dining out with family or friends, 55 percent of consumers still prefer to "split the bill" with cash.
Small purchases. In general, 80 percent of consumers use cash for smaller items and other forms of payment for larger, more expensive items. Specifically, 72 percent use cash for purchases under $10 and 54 percent use cash for purchases under $20.
Shopping at c-stores. At convenience stores, consumers are almost twice as likely to have used cash vs. credit card in the past six months, and 33 percent are more likely to use cash vs. a debit card. When it comes to impulse buys, 75 percent of items, such as candy and gum — are made with cash.
Security concerns. With data breaches becoming common headlines, 83 percent of consumers have concerns about data security and privacy vs. 93 percent believe cash can keep them safe from hackers. Nearly two-thirds of people feel nervous when they don't have cash on them, and 84 percent said they always try to keep cash on hand.
Conversely, 44 percent think credit cards or debit cards are safe, while 49 percent think the same of mobile wallets. When asked which single form of payment method is "safe to use," 59 percent said cash is safe vs. 16 percent for credit cards, 14 percent for debit cards and 11 percent for digital payments.
Staying on track. Consumers (77 percent) said cash plays a role in helping them manage their finance, and nearly half consider it the best option to do that. Among millennials, the trend is even greater, with 71 percent leaving their credit card at home when they go out to avoid overspending, and 70 percent who don't like using credit cards because they "don’t like being in debt."
Long live cash. Consumers (83 percent) said they would miss cash if it went away and 85 percent believe cash will never go out of style. Although digital and mobile payment adoption is rising, a moderate pace of adoption indicates that consumers are contemplating the use of cards and cash rather than replacing them large-scale, the study found.
With 79 percent of consumers claiming that they can't imagine a world without cash, the "new norm" is not a cashless society, but rather one in which consumers will continue to demand a wide variety of payment options, and cash will continue to play a role in how consumers choose to pay.
Download the Cardtronics 2016 U.S. Health of Cash Study here.