Consumers used less cash during the last six months of the pandemic than before, accelerating the move away from cash were the findings of or new report “Purchasing in a Pandemic” issued by Visa Inc. and consultancy The Strawhecker Group.
Among the findings; 26% of respondents expect to use less cash following the pandemic when compared to before. That was coupled with an 18% increase in those expecting to use cash more often, equals a net 8% decline in intent to use cash.
The Use of Cards Grew Double Digits
Comparing the intent to use credit and debit cards with cash, twenty-seven percent say they expect to use credit and debit cards more often, while 17% expect to use them less often, for a net change 10%. Fifty-four percent expect their use to remain the same, and 2% said they did not use cards and don’t intend to start.
“Debit cards are making a dent here,” Jared Drieling, senior director of consulting and market intelligence at Omaha, Neb.-The Strawhecker Group. Younger consumers, in particular, are adept at using debit cards and likely have used cash and checks far less than older consumers, he says. “This is a secular trend we’ve been seeing for some time,” Drieling says of the growing card use at the expense of cash.
Use of Card Features
Virus wary consumers are using more card features, such as contactless. Of the 41% of consumers surveyed, who say they have a contactless card, 60% of them use it for half of their purchases. Twenty-two percent use it less than half the time and 18% never use it.
Drieling: “Coming to a merchant discussion and being knowledgeable around the behavior is the first step.”
The use of contactless features appears to be a long-term trend. When asked about their behavior at the end of the pandemic, fifty-five percent of consumers expected to increase their use of contactless credit cards, and only eleven percent intended to cut back on their use. Thirty-four percent expected their use of contactless credit card features to remain the same.
Mobile Wallet Use on the Rise
Report data also shows that many consumers intend to use a mobile or digital wallet more following the pandemic, with thirty-four percent expecting to use a wallet compared with seven percent who intend to decrease their use. Thirty percent expect their use of digital wallets to remain the same while twenty-nine percent do not use a mobile or digital wallet.
“We’re seeing a lot of interesting dynamics play out,” Drieling says, especially when viewed with already ongoing changes, such as the growth in integrated payments. “This will continue to change, the behaviors of merchants and consumers. Merchants need flexible solutions to be able to provide what consumer behavior is at the moment.”
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Source: Adapted from “A Survey Quantifies How Consumers Are Displacing Cash in Favor of Cards” www. digital Transactions.net, October 6, 2020, Kevin Woodward