The holiday shopping season is well underway and high-tech gifts and gadgets again are proving popular. Shoppers are using digital technologies to drive payment for many of the purchases. Still, despite the rise in tech-driven payments, cash remains the dominant mainstream payment method, especially for routine low-value transactions.
In fact, recent studies underscore that cash and digital payments coexist in today’s payments landscape – and that harmony will continue indefinitely. As for the growth in digital payments, a 2017 study by Capgemini and BNP Paribas indicates that global payments will increase annually on average by
10.9 percent in 2018 and 2019, accounting for 726 billion digital transactions. This new ecosystem reflects a rise in
payment-enabling technology, changing expectations for value-added services, a
dynamic regulatory landscape and FinTech startups.
At the same time,
however, cash remains resilient, as compelling evidence indicates that
Americans have formed a durable bond with the greenback. Our third annual Health of Cash Study released recently shows that in the United States, cash continues to be the most commonly used consumer payment instrument across in-store shopping and person-to-person payments. There’s also evidence of Millennials increasing their use of cash. In fact, the Health of Cash Study reveals that 51 percent of Millennials say they tend to pay more with cash today than they did a few years ago.
We also found that cash especially resonates with consumers when making routine purchases – 68 percent of people use cash for purchases under $10 and 55 percent favor cash for purchases under $20. Plus, survey respondents don’t think cash is going away, because consumers value a variety of payment choices. More than four in five said they would miss cash if it wasn’t available as a payment choice. So, while consumers may pay for big-ticket items with a card or digital payment method, they may also use cash to pay for moderately priced tech accessories and gifts.
If the consumer and customer is always right in retail, then it’s clear that cash and digital payments must coexist in today’s and future payments landscapes. While digital payments make inroads, consumers perceive that cash is the most convenient, easy to use, safe and secure payment method.
At this holiday
gift-giving time, many consumers are favoring cash for its universal
acceptance, privacy and speed of exchange. And for those who share a credit
card or bank account, the only way for a present to truly surprise and delight,
is to pay with the privacy of cash.
Chief Marketing Officer