Even in the digital economy, cash is king

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The payments landscape has undergone rapid transformation over the past year, as the pandemic has pushed unprecedented numbers of consumers into digital channels. Despite the increased use of digital payment channels, however, cash has retained its important role in the payments landscape.

Indeed, the consumers’ perspective on cash and its importance to them has remained remarkably unchanged. This raises another question: what role does cash play in a digital economy?

Cash remains the most commonly used method of payment. It is also the preferred way to pay for small denomination purchases and to make person-to-person payments. The choice of species has remained largely constant over the past few years, regardless of economic conditions, alternative payments and a global pandemic.

Consumers value the choice of payment and they choose their payment method based on factors such as security, privacy and ease of use. There is no one-size-fits-all payment preference and solution.

Respondents to the 2021 US Cash Health Study, conducted by Javelin Strategy & Research, cited a number of benefits and features that make cash an important payment option:

  • Cash protects my privacy and financial security (66%).
  • Allowing people to pay in cash is important to society (63%).
  • Cash is safe to use (58%).
  • Cash is as important today as it ever was (54%).
  • Cash is often the easiest way to pay (44%).

One of the more interesting findings of the study was that underbanked consumers who consistently relied on cash also increased their use of digital payments. In fact, underbanked consumers regularly used a variety of digital payment options, with significant increases in person-to-person (P2P) payments (29%), digital wallets (28%), and merchant wallets (24%). %), although other demographics reported less use.

For digital commerce to grow and succeed, the accessibility of cash must expand and be integrated across multiple channels, which would allow better access to those for whom cash is their primary means of payment, than this either by choice or by circumstance.

For underbanked consumers and those who prefer to use cash, linking cash and digital payments through automated devices, typically ATMs, has the potential to democratize digital commerce, while also creating new revenue streams for one. wide range of businesses.

Banked and underbanked consumers see the use of ATMs as a way to participate in the digital economy and access other services beyond the provision of cash. Among all survey respondents, redeem rewards for cash (41% of all consumers and 59% of underbanked consumers) and receive funds from a P2P app (31% of all consumers and 57% of underbanked consumers) have become popular options. Underbanked consumers see value in even more ATM opportunities, such as check cashing (52%) and loan dispersion (50%).

Cash is generally not a payment option for digital commerce, but consumer preferences indicate that it should be. Respondents cited cash as the preferred method of payment for shopping online and collecting in-store (19%), pre-ordering food (28%) and personal services (31%), but digital platforms do not have the option of accepting cash for these services.

When properly equipped with the necessary software and hardware, the ATM can serve as an automated and always available intermediary between consumers who need or have money and the many different digital accounts, both accounts. traditional banking and others, which hold value in digital form.

Cash remains a healthy and robust part of the overall payments mix and serves as a vital ramp for future commerce for all members of society.

Consumers find money easier, faster and more convenient than debit cards and see it as secure and always available. Adding cash options to digital platforms, especially through ATM self-service, will help bring cash-preferring and cash-dependent consumers into the digital economy, and allow them to make better use of the mode. payment method of their choice.

Digital payments will continue to grow, building on an increase in first-time use during the pandemic. However, cash is still important to the majority of consumers. The emergence of new ways of paying and changing digital shopping habits is accelerating the need to merge the worlds of digital and physical payments as soon as possible.

Paul Wilmore is Director of Global Marketing at Cardtronics.

Learn from industry leaders and understand best practices with the insights shared in the BAI Executive Report, “The changing intersection of banking and technology. “


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