September 13, 2017
More than half of American consumers to abandon cash by 2020, according to global research report
Global research from Paysafe reveals that 54 per cent of American consumers don’t expect to carry cash by 2020
Americans are leading the trend toward digital payments technologies, ahead of the UK and Canada.
IRVINE, California -- More than half (54 per cent) of U.S. consumers expect to abandon using cash for shopping by 2020, according to Lost in Transaction, a new research report conducted by Paysafe, a leading global payments provider. The report uncovered the rapid move towards a cash-free economy with half (54 per cent) of American consumers only visiting an ATM once a month and one in seven saying they rarely carry cash at all. With the research showing two thirds (63 per cent) of people rely less on cash than a year ago, the move away from physical currency looks set to continue.
The comprehensive study, undertaken in the U.S., UK and Canada, looks at attitudes to money and consumer buying behavior, and examines how cash is merging with digital formats. It reveals increased consumer confidence in mobile shopping, the start of a shift to new payment methods such as cryptocurrencies and the potential for retailers to lose relevance without the right payment mix for customers.
According to the research, Americans are leading the way in the adoption of new payment methods with 14 per cent already using cryptocurrencies and 31 per cent using mobile wallets such as Android Pay and Apple Pay. This high adoption rate is linked to the increased confidence (72 per cent) U.S. consumers have in using their mobile phones for shopping. Despite leading the way in alternative payment technologies, Americans are still hanging onto some old-fashioned methods with 50 per cent having written a check in the last month (compared to 30 per cent of Britons, 40 per cent of Canadians).
The wider adoption of mobile wallets is likewise affected by concerns regarding people’s handsets. Nearly a third (30 per cent) of American consumers said they worried about their phone being stolen, while a quarter did not even want to take their cell phone out to pay. This is despite nearly three fourths (72 per cent) saying they are increasingly confident about using their phone for shopping.
“One in seven U.S. consumers have already started to use cryptocurrencies and one in six have used biometric identification. This core of early technology adopters will create the momentum for our next leap forward in payments, just as they did with mobile wallet use which has become mainstream in America. As consumer acceptance of a cash-free society grows, businesses are challenged to reimagine the shopping experience to allow for behaviors and payment models unthinkable a decade ago,” said Joseph Daly, Chief Operating Officer, Paysafe Payments Processing, North America.
“Today, the American consumer experience is defined by a huge diversification of choice – in retail options, services delivery and payment methods. In a rapidly transforming landscape, the merchants who survive will have invested early in emerging technologies that enable them to meet a range of customer payments preferences and quell security concerns – from cash and debit cards to mobile payments and eventually biometrics and cryptocurrencies.”
The research demonstrates that it’s essential that businesses accommodate both traditional and emerging payments technologies when accepting and processing payments. That journey starts with merchants understanding how consumers use money, where they use it and which formats they prefer, as consumers expect to be catered for when parting with their money.
To read the full report, which includes comparisons between consumer attitudes to cash and alternative payment methods in the US, UK and Canada, click here.