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Don’t believe predictions about decline of cash

Balance Innovations staff

This blog was originally published by Balance Innovations.

With many digital forms of payment available today, like credit and debit cards, mobile payment apps, and cryptocurrencies, it may seem as though cash is on its way out. Far from it. In fact, a cashless society in the coming years in North America and in many places around the world isn’t realistic, and properly managing cash is crucial if you want to stay competitive.

 

Consider the following: 

  • Even with the growth of internet sales, e-commerce remains a small player, representing just 10.7% of transactions in 2019.  

Payment of choice 

A big factor sustaining cash’s popularity in North America is the nature of shopping in general. Cash is by far the preferred method of payment for smaller purchases. Consumers use cash for 55 % of payments under $10, and for 32% of payments between $10 and $25. Consumers average about 22 such lower-end purchases per month, compared to just 12 payments monthly at $50 or more.  

Another factor that keeps cash popular is that more than 75% of all transactions – goods, food, transportation and personal services – take place in person, despite opportunities to shop online. Cash is the preferred payment method for 39% of in-person payments.  

For Americans who make less than $50,000 per year, 63% prefer to pay with cash. This socioeconomic group comprises 70% of the U.S. population.  

Lasting allure 

When it comes to gifts of money and other financial transfers from person to person, cash heavily dominates, at 80% of such transactions.

This is largely because cash is tangible. At some point, who hasn’t savored the look, feel and promise of a crisp, new $100 bill in hand? Even Dan Schulman, president and CEO of PayPal, a dominant player in the business of cashless payments, says, “I would never predict the death of cash over the next decade or two. I think cash is going to be with us for a long time to come.”

Implications in retail

It’s clear that in order to serve the needs of a diverse customer base, retailers must continue to offer various payment methods at the register or risk losing valuable customers. No matter how many other options are available, cash will continue to be prevalent due to cultural, necessity or even privacy concerns.

Managing cash transactions, whether for a single family-owned retail store or for a chain of any size, doesn’t need to be burdensome and labor-intensive.

If you’re ready to streamline your operations, increase the control and visibility you have over cash and even cut costs, learn about how Brink’s Complete can help you win big.

Get more details on cash myths that are impacting business by checking out our Cash Myths page.