The Use Of Cash: “I’m Not Dead Yet”

The Use Of Cash

Many of us in the payments world have heard about the imminent demise of cash. But to borrow a quote from Monty Python and the Holy Grail, “I’m not dead yet

If cash could talk I think it would say something very similar. For years, pundits and prognosticators have been sounding the death knell for cash. Unfortunately for them, the American consumer hasn’t been listening.

A recent article in CPA Practice Advisor refers to a study done by that shows that consumers still like to use cash – particularly for small ticket transactions:

Nearly half of U.S. adults (49%) say cash is king for purchases under $10, according to a new report. Even among rewards credit cardholders, 43% say cash is their go-to payment method while 31% favor debit and a mere 26% prefer credit. 

The biggest reason rewards credit cardholders prefer to pay with cash or debit over credit: it’s easier or quicker (40%). Other popular reasons to use cash or debit for small purchases include concerns about credit card debt (24%), stores having credit card minimums or fees for small purchases (14%), no incentive to (11%) or it’s rude (5%).

Our most recent Customer Merchant Experience Report: Payments, ATMs, and Prepaid: Cash Still Has Its Place backs up this finding. In the report, we find that consumers are still using cash for all types of purchases. Most notably, they are using cash at merchants where small transactions are typical.

Further, when we ask consumers their preferred method of payment across all retail types, cash comes in second behind credit cards.

As the CPA Practice Advisor article points out, there are a host of reasons people still use cash. These reasons can be summed up into one catchall – old habits die hard.  For most people, the choice of payment method is made long before they walk into the store. Whether it is ticket size, or some of the other reasons articulated above, people with continue to choose the payment method currently in use unless a compelling reason motivates them to move on to a new way to pay.

Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group