More than half (54 percent) of US consumers expect to abandon using cash for shopping by 2020, according to Lost in Transaction, a new research report conducted by Paysafe
The report uncovered the rapid move towards a cash-free economy with half (54 percent) 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 percent) of people rely less on cash than a year ago, the move away from physical currency looks set to continue.
The study, undertaken in the US, 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 percent already using cryptocurrencies and 31 percent using mobile wallets such as Android Pay and Apple Pay. This high adoption rate is linked to the increased confidence (72 percent) US 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 percent having written a check in the last month (compared to 30 percent of Britons, 40 percent of Canadians).
The wider adoption of mobile wallets is likewise affected by concerns regarding people's handsets. Nearly a third (30 percent) 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 percent) saying they are increasingly confident about using their phone for shopping.
"One in seven US 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.
