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Even in the digital economy, cash is king

Paper currency is typically not a payment option for online commerce, but consumer preferences indicate that it should be.

Jan 5, 2022 / Consumer Banking

The payments landscape saw rapid transformation over the past year, as the pandemic drove an unprecedented number of consumers to digital channels. Despite the increased use of digital payment channels, however, cash retained its important role within the payments landscape.

Indeed, consumer views of cash, and its importance to them, remained remarkably unchanged. This raises a different question: What role does cash play in a digital economy?

Cash remains the most commonly used payment type. It is also the preferred way to pay for small-denomination purchases and to make person-to-person payments. The choice of cash has remained largely constant over the past few years, regardless of economic conditions, alternative payments and a global pandemic.

Consumers value payment choice, and they choose their payment method based on factors such as safety, privacy and ease of use. There is no one-size-fits-all payment preference and solution.

Respondents to the 2021 U.S. Health of Cash Study, conducted by Javelin Strategy & Research, cited a number of benefits and characteristics that make cash an important payment option:

  • Cash protects my privacy and financial security (66%).
  • Allowing people to pay in cash is important for society (63%).
  • Cash is safe to use (58%).
  • Cash is as important today as it ever was (54%).
  • Cash is often the easiest way to pay (44%).

One of the most interesting findings of the study was that underbanked consumers who consistently relied on cash also expanded their digital payment usage. In fact, underbanked consumers regularly used a variety of digital payment options, with significant increases across person-to-person (P2P) payments (29%), digital wallets (28%) and merchant wallets (24%), even as other demographics reported less usage.

For digital commerce to grow and succeed, cash accessibility must expand and be integrated through multiple channels, which would better provide access to those for whom cash is their primary payment method, either by choice or circumstance.

For underbanked consumers and others who prefer using cash, linking cash and digital payments through automated devices, typically the ATM, has the potential to democratize digital commerce, while creating new revenue streams for a wide range of businesses.

Both banked and underbanked consumers see value in using ATMs as a way to participate in the digital economy and access other services beyond the provision of cash. Among all survey respondents, redeeming rewards for cash (41% of all consumers and 59% of underbanked consumers) and receiving funds from a P2P app (31% of all consumers and 57% of underbanked consumers) emerged as popular options. Underbanked consumers see value in even more opportunities at the ATM, such as check-cashing (52%) and loan dispersals (50%).

Cash is typically not a payment option for digital commerce, but consumer preferences indicate that it should be. Respondents cited cash as a preferred payment method for buying online and picking up in-store (19%), order-ahead food (28%) and personal services (31%), but digital platforms do not have a way to accept cash for these services.


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When properly equipped with the necessary software and hardware, the ATM can act as an automated, always available intermediary between consumers who need or have cash and the many different digital accounts—both traditional bank accounts and others—that hold value in a digital format.

Cash remains a healthy and robust part of the overall payments mix and serves as a vital on-ramp for future commerce for all members of society.

Consumers find cash easier, faster and more convenient than debit cards and view it as secure and always available. Adding cash options to digital platforms, particularly via self-service at the ATM, will help bring cash-preferring and cash-dependent consumers into the digital economy, and allow them to better use their payment method of choice.

Digital payments will continue to grow, building on an increase in first-time usage during the pandemic. However, cash remains important for the majority of consumers. The emergence of new ways to pay and changing digital shopping habits are accelerating the need to merge the digital and physical payment worlds sooner rather than later.

Carter Hunt is chief revenue officer at Cardtronics.

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