In a Digital-Trending World, Cash Is Resilient

Americans generally do not like being told what to do or how to think. And based on the results of the 2017 Health of Cash Study – a Cardtronics collaboration with independent research company Edelman Intelligence – they aren’t interested in being told how to pay, and will likely push back on retailers’ cashless experiments which eliminate freedom of payment choice.

While many consumers are indeed adding smartphone-driven digital pay options into their payments toolbox, cash continues to resonate with American consumers, who show little interest in being ‘all in’ with cashless, or having their choices limited in any way.

The position of American consumers is essentially this: Cashless as an option? Ok. Cashless as an arbitrarily imposed mandate? No, thank you. Hands off my cash!

Cash’s Enduring Role in a Digital World

Contradicting an assumption that cash is fading away in the digital age, the Health of Cash Study reveals that not only do consumers continue to use cash, but in fact cash remains the most commonly used payment method by a comfortable margin, used by nine out of 10 consumers in the past six months, and by 80 percent on a monthly basis.

Indeed, the data is clear that cash usage is woven deeply into the fabric of Americans’ payment behavior. When asked “Which is your most preferred payment method?” consumers selected cash as their second most-preferred method, at 27 percent, just behind debit cards at 33 percent. Credit cards, digital and checks rounded out the list with 22 percent, 15 percent, and 3 percent, respectively.

And the most preferred way to pay for millennials? Cash, at 29 percent, followed in a close grouping by debit card (26 percent), digital (25 percent), then credit card (17 percent) and finally checks (3 percent). Yes; you read that right. Millennials’ most preferred way to pay is cash.

Millennials – Driving Both Digital Adoption And Health of Cash

Millennials, in their response to the most preferred payment method question, provide compelling data points in support of the continued resilience of cash as part of a group of primary payment methods, as well as the trend of consumers embracing a blended mix of ways they pay.

Even as this generation of digital natives embraces new payment options, millennials agree that cash remains relevant. Case in point – person-to-person (P2P) payments, where millennials drive both the growth of cashless digital payments and the health of cash.

In a millennials vs. all consumers comparison, in the last six months millennials are more likely to have used: Venmo-style P2P apps (42 percent millennials vs. 33 percent all consumers); Bank P2P services (27 percent millennials vs. 16 percent all consumers); and, millennials are also more likely to have used cash (67 percent millennials vs. 62 percent all consumers) for P2P payments. In fact, across all age groups regarding P2P payments, millennials are most likely to have used cash.

Why Cash Endures – Three Key Truths

The Health of Cash survey results suggest there are three key truths that guide consumers in their payment decisions. Despite the rise of digital payments, people don’t think cash is going away, and they aren’t longing for a cashless future because they value cash’s unique attributes against the backdrop of all three truths. For each of these areas, neither cards nor digital payments are able to provide the same comprehensive benefits package that consumers have come to appreciate and rely on from cash.

Truth One: American Consumers Embrace Freedom of Payments Choice

The idea that consumers want to be limited to cashless payments is not consistent with consumer behavior. As the Health of Cash Study has documented, cashless as their only option is neither the want nor the will of the vast majority of Americans. Consider: 89 percent of people like having the ability to use a variety of payment methods; 90 percent of consumers use at least two payment methods a month; 82 percent of people would miss cash if it went away altogether; and 66 percent think payment technology is moving too fast toward digital payments.

What’s more, and regardless of their personal payment preference, 61 percent of consumers admit they get upset when establishments don’t accept cash – and among millennials there’s an uptick to 68 percent.

What American consumers clearly prefer, is choice. They want the choice of having multiple ways to pay, including cash, and they want to personally decide what is best for them.

Truth Two: Exchanging money should be convenient, safe/secure, easy to use & (at times) private

Consumers want their preferred payment method to be both convenient and easy to use, and they feel most payment methods deliver those attributes to varying degrees. However, when asked to choose which payment type best delivers convenience and ease of use, consumers (38 percent and 44 percent, respectively) chose cash.

And when the choice of ‘how to pay’ hinges on safety and privacy, cash clearly separates from the payments pack - most notably on privacy (e.g. doesn’t track purchase behavior) – a benefit that cashless cannot deliver. Cash is identified as the safest way to pay, this time by 48 percent of survey respondents. And when the attribute is privacy, cash wins again, with 60 percent of consumers, a clear majority selecting cash as the top choice.

Truth Three: Payment options should empower financial well-being and inclusion.

Concerning financial well-being, the Health of Cash Study finds consumers agree that cash is a great way to control spending and maintain a budget. In fact, consumers believe cash is the single-best payment method to help keep them from overspending. Cash was selected by 47 percent of consumers; debit was second place at 23 percent.

As payment types relate to societal inclusiveness, the Health of Cash Study findings paint a clear picture of a segment of society disadvantaged in a cashless America focused on digitizing all transactions and financial services. As reported by the FDIC, approximately 33.5 million U.S. households are either underbanked or unbanked, and largely disconnected from the traditional banking system.

Digital-only retail and payment environments often exclude these Americans, whereas cash is universal within our society. Having a smartphone is one thing; having a smartphone AND the banking relationship necessary to load a mobile wallet with a debit or credit card is quite another. When the Health of Cash survey asked for all payment methods, “Is everyone able to use this?” 94 percent responded positively to cash, compared to 67 percent for credit, 73 percent for debit and 66 percent for mobile wallets.

Let the People Decide

The 2017 Health of Cash Study continues to underscore the falsity of the cashless America narrative. While cash may not always be the most-preferred payment option in all scenarios, it resiliently remains the most commonly used form of payment, and there are many instances where it is still exactly what people want, and precisely the way they want to pay.

Cash has an important place in consumers’ wallets, and in their hearts. What the Health of Cash Study makes clear is that any cashless experiments undertaken today are born of something other than the will of the people.