Cash is king – especially for Millennials.
While the latest surveys find that Americans prefer to use cash as their payment method, the nation’s largest demographic – those born between 1980 and 1996 and representing one-in-four of us – show the highest preference for cash.
A recent study conducted by Oracle
indicates a majority of Millennials favor cash or debit cards when making a purchase, with 62 percent of “trendsetters” among the demographic preferring cash. As the name suggests, this segment is the most likely to start or try a new trend, which implies cash’s continued popularity among Millennials.
The Oracle study isn’t the first to signal Millennials’ preference. A Federal Reserve Bank study
that asked people to keep a diary of their spending found that compared with their elders, young adults used cash more – for nearly half of all purchases.
Why? Possibly, the habit was learned when Millennials were growing up in tight times during the Great Recession. This could explain why 57 percent of them say they most often pay with cash for a purchase, as reported in the Oracle study. A debit card was rated as the second most-favored payment, followed by the use of a credit card, a check and a mobile payment option. (Only one percent say they tend to use their mobile phone for a purchase.)
Similarly, Cardtronics’ 2015 Cash Survey
found that nearly half of Millennials (45 percent) are using cash more today than just a few years ago. Millennials are significantly more likely than Baby Boomers to use cash because, they said, “paying with cash helps me stay on budget.”
Millennials’ penchant for cash doesn’t end at paying for purchases. A GOBanking Rates survey
revealed that 58 percent of this demographic prefers to get paid with cash. This predilection comes despite other person-to-person (P2P) payment methods, such as PayPal or Venmo, being introduced and discussed in the market. Only one-in-four respondents said they favor getting paid back using these P2P payment apps. And while new P2P payment methods are emerging, cash still plays a key role in such transactions.
As for men and women Millennials, the GOBanking Rates survey found that women chose cash 21 percent more often than men. For men, the biggest gap among other payment options relates to checks, with 10 percent of men favoring checks vs. six percent of women.
These findings as a whole illustrate that even with an evolving payments landscape, our nation’s digital generation loves cash and will continue to popularize its use. People may claim that the death of cash is upon us, but clearly, Millennials disagree.
Chief Marketing Officer