“Despite all of the talk about credit cards, debit cards and mobile payments, cash still dominates many forms of payments. In fact, any talk about a cashless society seems tremendously premature.
“Debit card use is up” … “The check is an antiquated form of payment” … “Mobile wallet usage is about to take off.”
You can’t open a bank or credit union publication today without hearing about the transformation (and disruption) of the payments industry. New players are emerging, with established financial institutions trying to keep up with digital payment innovations.
Despite all of this chatter, however, a Federal Reserve report from the Diary of Consumer Payment Choice (DCPC), suggests that cash is still king. The study found that consumers choose to use cash more frequently than any other payment instrument, including debit or credit cards for the following reasons:
- Cash plays a dominant role for small-value transactions
- Cash is the leading payment instrument for specific types of purchases
- Cash is the key alternative when other options are not available
- Cash is the leading payment alternative for Gen Y
- Cash is a primary payment option for lower income segments
- Cash can’t be hacked’