The role of cash as an essential tool when digital payments
go offline went on display last month when the Visa network in the United Kingdom and Europe experienced
a large-scale service disruption. The event on June 2 rendered retail chip and PIN card
purchases impossible and put a spotlight on payments challenges in true
issuers were telling customers to use ATMs and grab cash. In-store and online
shopping ground to a halt. Irritated customers at convenience stores,
supermarkets, retail stores and banks voiced their frustrations on social media
until the outage issue ended over five hours later.
the payments chaos was short lived, it demonstrated the fragility of digital payments,
and showcased in stark relief the risk inherent in a digital-only, cashless
society. The digitization of payments is not fool proof and cash-based payments
are critical, even for digital-first consumers, when the digital gears stop
As Cardtronics’ 2017 Health of Cash Study made clear, nine out of 10 consumers favor the ability to pay with cash and other payment methods, and prefer cash for low-value purchases. More than three in five disapprove when cash isn’t accepted. Other data verify the sustainability of cash. The G4S Cash Report 2018 reports that cash in circulation
relative to GDP increased 9.6 percent across all continents between 2011 and
2016. In Europe, 80 percent of POS transactions are conducted in cash; while in
North America, cash use accounts for 31 percent. In Asia, while online purchases have risen, 3
out of every 4 are paid for by cash on delivery.
the Visa incident, consumers were advised to rely on multiple payment methods
should an emergency such as the Visa outage arise, and this advice is
consistent with that of personal finance experts. A payments mix is essential
for emergencies, whether caused by the payments networks themselves, Mother
Nature, or anything in between.
Personal finance expert Paul Lewis
encourages that consumers, “carry two or three cards, on different networks and providers, and also some cash for your immediate needs.” (And it seems many consumers are taking Paul’s advice – the 2017 Health of Cash Study found that 85 percent of all consumers always try to keep cash on hand, and two-thirds say they feel nervous when they don’t have cash with them – even among millennials, with 70% agreeing to this.
And while no payment method surpasses cash for emergency situations, cash is an essential payment form with many benefits for our day-to-day lives. As shown in our Health of Cash Study, cash continues to be a preferred payment method for consumers for many reasons, including:
- Convenience: Consumers prefer to use cash for smaller item purchases, with 68 percent using cash for purchases under $10, and 59 percent using cash at convenience stores. Cash also leads when making many service payments - from paying a babysitter (67 percent prefer using cash) or lawn service (46 percent chose cash) to buying coffee and snacks (54 percent prefer cash).
- Resilience: Across in-store shopping and person-to-person payments, cash remains the most common form of payment - used by nine of 10 consumers in the six months prior to the study.
- Security: 85 percent of consumers say cash makkes them feel secure, versus 64 percent who say the same for credit cards and 67 percent for debit cards.
- Financial well-being: Three-fourths of consumers say cash help them control spending, and nearly half consider cash the single-best payment method to stop them from overspending.
The recent Visa incident is a perfect example of the importance of payment diversity, whether you prefer card payments, mobile payments, or reliable cash.
Cardtronics - Champions of Cash