The success of the war on cash seems to be accelerating. A new survey by US Bank finds that 47 percent of consumers prefer to use digital apps to make payments versus 45 percent who still prefer cash, and the younger consumers are, the more likely that’s the case. Millennials tilt digital more than any other generation, followed by members of Generation X, with Baby Boomers bringing up the rear.
The introduction of Zelle, a new P2P (person to person) payments network, is expected to add momentum to this dynamic. “The incredible consumer response to digital and mobile banking solutions is changing the entire industry and diminishing the historic use of cash. ATM withdrawals and branch visits are slowly declining, while mobile transactions are increasing dramatically year over year,” said Gareth Gaston, executive vice president of Omnichannel at US Bank. “In just the 30-day period since Zelle launched within the US Bank mobile app, the number of P2P payments sent by our customers have increased by more than 300 percent. It shows that the broad availability of free, easy-to-use and fast-acting technology is supplanting the need for cash.”
Consumers also are carrying less cash. Overall, 50 percent of those surveyed said they carry cash less than half the time. And when they do, almost half keep less than $20 on hand, and 76 percent keep less than $50.
When using cash, consumers prefer to spend it on dining (36 percent,) travel/transportation (15 percent), parties (14 percent), and family functions (14 percent). When using P2P digital payment networks, they prefer to pay for bills (51 percent), items from another person (40 percent), gifts (35 percent), and concerts (8 percent). Seventy-three percent of previous P2P users said they are more likely to use a P2P service if payments are secure and backed by a bank.