Cash Maintains Its Throne As The Holiday Shopping King


If cash is king, then it has a serious revolution on its hands with what seems like an endless stream of digital wallets storming the castle at every opportunity. However, while retailers and software developers might be backing the cause of mobile payments, customers are still showing affection for old-fashioned greenbacks.

According to a new study conducted by Bankrate and Princeton Survey Research Associates International, nearly 39 percent of shoppers plan on paying for their holiday purchases with nothing but cold, hard cash. Despite the rise of mobile wallets like Apple Pay, Android Pay and the new-to-the-U.S. Samsung Pay, consumers haven’t shifted away from coins and bills over the past year. Bankrate’s survey done in 2014 found that a fairly constant 38 percent of shoppers planned on using cash to pay on Black Friday.

When the number of consumers planning on using debit cards (31 percent) to access cash savings is factored in, roughly 70 percent of consumers count themselves in the cash and debit crowds this holiday shopping season.

Ronit Rogoszinski, wealth advisor at Arch Financial Group, told Bankrate that the continued reliance on cash could indicate shifting financial perspectives among middle-class families.

“Paying with cash or debit means people definitely have changed their priorities,” Rogoszinski said. “They’re going to buy what they can afford and no more. That’s very good.”

Mike Cetera, an analyst at Bankrate, suggested that consumers might be clinging to more tangible payment methods as a result of the lingering effects of 2008’s financial crisis.

“If you take people at their word that this is how they’re going to get through the holidays, it’s really a reflection of what occurred during the Great Recession,” Cetera told CBS News. “People saw what happened when you get in over your head, and they’re pledging not to do it again. Whether or not they follow through is another question.”

The survey did find that wealthier families – those making at least $75,000 per year – are more likely to use credits cards than less-well-off shoppers, with 37 percent indicating a willingness to charge their purchases. However, debit cards still comprise the single largest preferred payment methods among this group, with 38 percent in their corner.

While cash, debit and credit cards jockey for the title of most commonly used payment methods this winter, there’s little debate over the least popular ways to checkout. Only 1 percent of consumers surveyed indicated that a mobile wallet would be their go-to payment method when shopping this winter – a figure matched only by checks. Among smartphone users, 84 percent definitely said that they wouldn’t be using a mobile wallet – 36 percent cited security concerns, 31 percent didn’t think they were convenient enough and 12 percent admitted they had no idea how to get started with a digital wallet even if they wanted to.

While Apple and Samsung have been extremely vocal about their respective payment platforms in recent months, it’s clear that something is holding consumers back from buying into the services, regardless of how convenient or secure they are.

“Mobile payments, in the U.S. and worldwide, has been in a state of hyper-kinetics ever since Apple Pay launched last fall as an in-store and in-app mobile payments solution. When that happened, just about everyone (besides us here at PYMNTS) publicly declared that it was ‘game over’ for anyone else with any mobile payments ambitions – past, present or future,” MPD CEO Karen Webster wrote in a recent column. “Since then, we’ve seen Android Pay and Samsung Pay launch, Visa Checkout and MasterPass gain more merchant acceptance and registered users; PayPal make acquisitions, separate from eBay, and go public — and lots of new and niche players have fought for attention.”

But, Webster says, there still remains one issue: “Consumers almost always continue to use plastic cards, and not mobile phones, to pay for stuff when they shop at physical stores.”

It may still be awhile before the average consumer is ready to jump on board the mobile payments bandwagon for their holiday purchases, but until then, expect more than a few silent nights for the processing servers of digital wallets.