By Currency Research
Judging from recent headlines, it appears that newspapers, along with the payments world, would have us believe that younger generations are driving monumental shifts in payment trends and moving away from cash in droves. Typically, this takes the form of anecdotal stories, with younger individuals quoted as saying “I never use cash.” This is a powerful general-purpose statement that also handily promotes the myths and misconceptions that cash is disappearing, is low technology, and that consumers prefer cards to cash. Once again, however, surveys and payment studies from organizations such as the UK Payments Council and the US Federal Reserve do not support this claim.
In a 2010 report from the UK Payments Council’s Strategic Cash Group, both older and younger generations are found to prefer the ease and simplicity of cash as a payment method:
THE FUTURE FOR CASH IN THE UK
The picture here is probably one of general continuation of current trends, but of certain sectors changing considerably faster than others. There is no imminent revolution that we can see ahead. Teenagers are heavy users of cash. Cash is a payment method which is easy to use, convenient for parents to supply and simple for budgeting. As today’s teenagers grow towards more diverse use of payment instruments, tomorrow’s teenagers may well continue to prefer cash.
Cash is a payment method which is easy to use, familiar and simple for budgeting, even for those who have a debit or credit card available. 70
Further to this point, in a September 2013 presentation at the Miami ICCOS Cash Cycle Seminar, the preliminary results of the 2012 US Federal Reserve System’s Diary of Consumer Payment Choice (DCPC) survey showed that cash use continues to be prevalent among people from all age groups and educational backgrounds. 71 The charts in the following presentation slides are included with permission of the Federal Reserve’s Cash Product Office (CPO).
As pointed out above in Myth #4, cash use is not declining; in fact, and more critically, the DCPC survey showed that overall, cash was the preferred first or second choice as a payment instrument among all ages and socio-economic classes. 72
This article has been posted with permission from Currency Research and is excerpted from The Case for Cash Part 1: Myths Dispelled. To request a copy of the full report or to learn more about Currency Research, please click here.