Are we using less cash? Some studies say Americans are now going weeks at a time with no cash at all in their wallets. Instead, they’re reaching for their plastic or their smart phones.
It’s all about debit or credit cards, mobiles and other currency these days. A new Rasmussen Report reveals two in five adults have gone without cash in their pockets for weeks. The flip side of that, however, is that folks who are using their credit cards are more apt to spend more. The study shows that people who use cash are much more likely to take a step back and rethink what they’re buying, why they’re buying and whether they really need it.
The Mobile Alternative
Here’s another interesting finding. Most of us know well the process: the cashier totals our charge, we swipe our card and input our PIN number if paying with debit and are asked if the total is right. We hit the appropriate keys on the keypad and within a minute, our transaction is approved and we’re on our way.
Now, though, with our smart phones pulling double duty as our financial center, those transactions now take on average twelve seconds. And the best part is consumers are much happier with their contactless payments that their smartphones provide. There was $2 trillion dollars spent last year via these payment methods and that number is expected to grow 2% a year. Cash transactions are also expected to decline at around the same rate.
It might be the reason contactless payments aren’t growing any faster is on the shoulders of the merchants who are concerned about the costs associated with the equipment and set up costs. With the big credit card companies working to eliminate the magnetic strip cards and replace them with computer chips, that’s a big concern for merchants.
Then, add to this the latest move in incorporating the needed equipment for the contactless methods found via smartphones, it’s no wonder merchants – especially mom and pop businesses – are concerned about the financial aspects of moving into a more modern payment structure.
GPS
There also exists the new GPS and online coupon companies, such as Groupon, who are eager to get in on the money making end of things. Traditional brick and mortar businesses are scrambling to find a way to allow these dynamics into their own offerings. It’s all part of the wallet free payment avenue that’s so attractive not only to these big companies, but the consumers who are eager to use them.
Security
Security is always at the forefront, whether it’s a business owner, credit card network or consumer. The good news is there are strong security features built into these new technology-driven devices. It’s a big plus when it comes to selling these new ideas.
In short, all of these methods and new payment options aren’t based on whether everyone involved is on board, it’s really more about how soon can these new methods be put into place? Consumers are generally up for anything that makes their lives easier and safer from a financial perspective.
Businesses are always up for anything that allows them to improve the bottom line and banks and credit card companies are all about new customers, new features and new incentives to keep those customers.
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