According to a recent article in PYMNTS.com, many popular services geared toward digital payments, such as Uber and Lyft, have hardly made a dent in American’s cash usage. One important reason for this is that cash rules small purchases across all age groups and demographics. Not only are small transactions like purchasing an afternoon snack or tipping your server easier to do with cash, but sometimes other payment options aren’t even possible. For garage sales, festivals and local farmer’s markets, cash is often the only payment option.
Despite the hype surround digital payments, cash payments are still favored for many reasons by several different age groups. Here are five reasons why cash is here to stay:
Virtually Universal. While cash isn’t accepted everywhere – like Amazon’s brick and mortar bookstores – most merchants are happy to accept cash payments. Some businesses will not accept Discover or American Express, occasionally leaving consumers in a bind, so keeping cash on hand is always a good idea.
Cash is Useful in Emergencies. The U.S. government includes cash on its disaster supply list, along with prescription medications, food and water. In the event of a natural disaster, power and phone lines may be down rendering credit and debit cards useless. Keeping a few dollars stashed away may be the only way to obtain needed goods, even if the disaster is just a misplaced wallet.
Cash Discount Programs. Merchants and small businesses are showing increasing interest and instituting cash discount programs in an effort to avoid overwhelming processing fees associated with credit and debit transactions. Some businesses have even introduced cash discounts for fuel purchases, saving both the company and consumer money.
Better Budgeting. A study by MIT found that consumers who pay with plastic spend more on purchases, while those that use cash focus more on the overall cost of an item. After six months of using cash for small purchases, many people found they had less debt and less extraneous spending.
Privacy. Aside from the possibility of identity theft when using other forms of payment, credit card companies have been known to sell consumer information leading to annoying marketing calls and junk mail. Consumers appreciate the peace and anonymity of cash purchases.
Despite the hype of a cashless society and the increasing number of payment alternatives, cash is not going away anytime soon.
Providing easy cash access for consumers by having an ATM on-sire can increase foot traffic and revenue for merchants. To learn more about ATM placement, contact BFC today.