NEW YORK—Old payment habits take a long time to change, unless there's a major event––such as a global pandemic. That is evident in the usage case of cash, according to one new analysis.
The Federal Reserve Bank of San Francisco’s said its Consumer Payment Diary conducted in October 2019, just before the pandemic struck, found cash made up almost half (47%) of all in-store transactions under $10.
But that share dropped significantly as the size of transactions went up, deferring to debit and credit card, the FRBSF reported.
Meanwhile, the effect of the pandemic on North America’s usage of cash for in-store point-of-sale transactions is clearly seen in the data from FIS’ 2021 Global Payments Report. In 2019, cash had an almost 15% share of all in-store POS volume, while mobile wallets could muster only a 6% share position, PaymentSource stated in its analysis.
A 60% Boost
In 2020, mobile wallets received a 60% boost in POS usage, growing to a 9.6% share; and cash volume fell by over 20%, to 11.4%. Going forward, FIS predicts mobile wallet POS volume will reach 15.5% in 2024 while cash usage will fall to under 10%.
“Merchants who balked in the past about accepting wallets because there were no users changed their tune overnight as the rush was on to give consumers more contactless payment options,” Jason Pavona, general manager for North America e-commerce at FIS, told PaymentSource.