Alternative payments are gaining traction while cash continues to dominate. This trend has led to payment options coexisting — all to the delight of today’s complex consumers who want endless ways to access their money.
When was the last time you heard, “Will that be cash or check?” It’s been probably 20 years.
How about, “Swipe your card when you’re ready. Hit the red X for credit.” Almost daily, right?
Now, when was the first time you heard, “We now accept XYZ-Pay?” Maybe you’ve never heard it. Or maybe you’re finding it’s starting to become an almost daily occurrence.
And while your aunt may insist on sending you a check in the mail every birthday, your best friend may have virtually gifted you a digital copy of your favorite movie on iTunes.
That’s because the payments landscape is changing. Like newspapers coexisting with smart devices, hybrids sharing the road with gas-powered vehicles and small tablets plugged into a big high-res monitor, consumers want solutions that fit their lifestyle, on their terms.
Globally, people aren’t ready to cash out.
Our CEO, Andy Mattes, is fond of pointing out that reports of cash’s death have been greatly exaggerated. For proof, just turn to the most recent stats surrounding 2015 holiday shopping payment preferences. The payment option of choice this past holiday season was cash – more than 39% of Americans chose that method of payment over any other.
Statistics around the world reinforce the strength cash still holds with consumers.
- Approximately 2 billion people in the world are still considered unbanked – lacking access to financial services, they rely primarily on cash and incorporating their primary payment method is key to driving financial inclusion.
- Cash circulation in the United States grew 42% between 2007 and 2012, and the amount of U.S. money floating around in bills and coins is expected to grow by about five percent each year.
- Cash accounts for 85% of global consumer transactions, even as the world’s population has access to non-cash payment options.
- When Americans need to repay someone, 4 out of 5 prefer to use cash.
- 357 billion non-cash transactions were performed worldwide in 2013. 304 billion of those transactions were performed in the top 10 countries — about 85% of non-cash transactions occurred in 5% of the world.
Cash is widely accepted, relatively reliable and it can’t be hacked. As long as those motivations remain, cash will continue to be a dominant force in the payments ecosystem.
Cash is great, but have you seen this technology?
The flip side of the coin is that consumers have never found a channel they didn’t like. And the latest research reveals more Americans did their banking via mobile or tablet on a weekly basis than through a physical branch. So if mobile is a primary, preferred touchpoint, mobile payments can’t be far along, right?
They may be coming sooner than you think. If 2015 was the year Apple Pay resuscitated NFC and moved the needle in adopting mobile wallets, 2016 is the year in which the mobile industry and the payments industry materialize a sound business model to make this payment method commonplace.
The main hurdle in the adoption of mobile payments is consumer perception. While mobile payments are safe, there is still a fear that data could be stolen. The Federal Reserve found that 62% of consumers are concerned with mobile payments security.
Clearly, if cash is still king and mobile is a preferred interaction model – these two trends need to meet.
Thriving in the same financial ecosystem.
As a services-led, software-enabled company supported by innovative hardware, we connect people to their money in secure, convenient and reliable ways.
Our Innovation Team dove deep into these emerging payment options. You can see them in our latest concepts. Whether it is integrating Host Card Emulation through XPRESSION™ SafeLoad or creating contactless payment terminals incorporating mobile authentication with both cash and digital transactions, we continue to implement solutions that bridge the physical and digital worlds of currency – so regardless if consumers choose cash or a cashless payment method, we can serve their needs and help them move seamlessly between the two.
It’s the dawning of a new day in the ever evolving payments ecosystem, and the future is looking bright.