Thinning wallets might be indicative of a shift in consumer preference toward credit cards and digital wallets, but is it?
Not for 84 percent of U.S. consumers who would rather keep some cash handy, according to the findings of the Cardtonics 2016 U.S. Health of Cash Study.
The study suggests that mobile wallets might be the new cool kid on the block, but they are anything but close to stealing away consumers’ love for cash. Instead of solely relying on credit cards and mobile wallets, consumers are preferring to use them in combination with cash. About 85 percent of consumers reported using at least two different forms of payment, and 55 percent reported using at least three payment methods every month.
While consumers showed an inclination to pay for expensive purchases with credit and debit cards, 80 percent reported using cash for buying smaller items, especially at brick-and-mortar stores.
Cash usage was found to be neck-and-neck with credit card usage at big-box retail stores, like Target and Walmart, and it was found to be the hands-down choice of consumers at smaller convenience stores.
About 75 percent of frequent convenience store purchases, such as candy and gum, are reportedly made with cash.
And when it comes to P2P transactions, despite the proliferation of numerous mobile P2P transfer apps, consumers seem to be picking good-old cash to pay back their friends and split their restaurant bills.
“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,” said Jonathan Simpson-Dent, chief commercial officer for Cardtronics.
For splitting restaurant bills, 55 percent of consumers (47 percent of millennials) said they preferred using cash over P2P payment apps.
In the research, security emerged to be a major factor that led consumers to trust in cash. About 93 percent of respondents said they believed using cash safeguarded them from the reach of hackers, and 83 percent said they were concerned about their data security and privacy.
When it came to identifying a single form of payment that is “safe to use,” 59 percent of respondents said it would be cash. Credit cards, debit cards and digital wallets, on the other hand, were considered safe to use by just 16 percent, 14 percent and 11 percent of respondents, respectively.