COSTA MESA, Calif.—Where do Americans stand on the long-anticipated cashless society? They are ready to continue anticipating.
A new Pulse survey from J.D. Power has found even in the face of the newly launched Apple Card and cashless retail outlets such as Amazon’s Go Stores, 78% of U.S. consumers believe stores and restaurants should be required to accept cash.
According to J.D. Power, reasons given for sticking with cash include concerns about privacy and security and the impact cashless stores will have on the unbanked. J.D. Power noted some cities, such as Philadelphia and San Francisco, and states, such as New Jersey, Massachusetts and Rhode Island, have already enacted laws that require most businesses to accept cash, it is clear that many Americans are still not sold on the economy of the future.
Generational Consensus
“The most surprising finding in our analysis is the lack of a generational divide in consumer opinions,” said J.D. Power in releasing the survey findings. “While 85% of respondents over the age of 60 predictably feel stores and restaurants should be required to accept cash, 72% of 18-to-29-year-olds also feel the same way.”
Other Findings
Other findings include:
- Overall, 82% of consumers say they typically carry cash, which includes 78% of 18-to 29-year-olds.
- One quarter (25%) of all respondents said they have $50 or more on hand at any given time. What’s more, 67% of respondents say they used cash to make a purchase during the past week (65% of 18-to-29-year-olds).
- 61% said they used a debit card, 54% used a credit card and just 20% of consumers reported using a mobile phone or smartwatch to make a purchase.
The number-one reason for carrying cash that was cited by consumers is to have it in case of an emergency (60%), followed by those who said they prefer to use cash for small purchases (50%), those that carry cash for tips (42%), and those that use cash to better manage their finances (20%), J.D. Power reported.
What’s Really Revealed
“While the widespread loyalty to cash may seem almost arcane in practice, looking at consumer logic on the matter actually spotlights some important hurdles for mobile payments companies and credit card providers,” said J.D. Power. “Security breaches have become far too commonplace, while card skimmers have made it easy for criminals to procure secure information. Similarly, where some consumers may have concerns about surrendering their privacy with mobile purchases, cash doesn’t leave a digital footprint. So, whether consumers are hoping to keep a tighter lid on their credit card information, or simply want to keep their purchases out of the data sharing ecosystem, cash can offer a technological workaround.”
J.D. Power further noted cashless stores may have the potential to make managing a store easier, and in some cases such as anti-theft, safer, but at the cost of creating a stratified shopping experience where some consumers simply won’t have access. “These socioeconomic concerns were central to the thinking of states that have already signed off on legislation requiring stores to accept cash,” the company said.
As for that much anticipated cashless society, J.D. Power added, “The time may be soon approaching that the benefits start to outweigh the negatives, so it will be vital to figure out the next steps to solve the hurdles that going cashless would create. So, while Americans may be clinging to their cash now, the question of how much longer they’ll be able to do so looms large.”