A January 2015 study from the Federal Reserve Bank of Boston, “U.S. Consumer Holdings and Use of $1 Bills,” reported 64% of U.S. adults 18 years plus start the day with at least a dollar on hand. In addition, 50% of consumers report making at least one cash transaction on any given day.
So why isn’t cash a thing of the past, as so often reported?
Consumers consistently turn to cash when confronted with disasters – both natural and financial. The situation in Greece is only one of the most recent examples of the reliability of physical currency. As banks closed their doors, credit and debit cards were denied and citizens flocked to ATMs to make withdrawals. Businesses even began requesting transactions be performed in cash as there was no clear indication of when full access to bank accounts would be available.
Natural disasters have a similar effect on the availability of debit, credit and mobile payment technologies. While digital forms of payment require power and a network connection, cash can continue to perform transactions without the need for these modern day conveniences. Anyone who has ever been hit by earthquakes, hurricanes, tornados, landslides, wild fires or other disasters can attest to the security of keeping cash on hand.
Have you ever encountered a small shop that only accepted credit or debit for purchases over a specific amount? What about the rare “cash only” establishment? They might be more prevalent in small towns but they still exist.
What about that tip jar sitting out for your local barista or bar tender? You probably can’t swipe your card or phone there. And what about that snack you spotted in the vending machine at the end of the hall? While some vending companies are adding credit options, chances are you need a dollar bill and/or some change if you want to use a snack machine’s services.
There are quite a few uses for cash that are yet to be addressed by other payment options. In some cases, such as small-town shops and vending machines, the added cost in service fees for providing digital payment is simply not worth the investment.
Cash use may seem to be on the decline but it is still seen as a dependable and preferred payment resource. It is of high value in emergency situations, a go-to for small transactions and a regular resident of many consumer’s wallets. While payment processors, card networks and technology developers continue to tout the end of hard currency, consumer behavior makes it fairly clear cash is far from out of the picture.
By: Alicia Blanda
SOURCE: ATM Atom