January 05, 2018
Each year, the U.S. Treasury Department prints upward of 7 billion currency notes, but American consumers appear to have less and less use for them. Instead, they’re flashing credit cards, shopping online — and using person-to-person (P2P) payment platforms to handle personal transactions.
“Cash will always have a certain cachet, but there are compelling practical benefits to making payments digitally,” says Gareth Gaston, Executive Vice President of Omnichannel at U.S. Bank. In this Q&A, Gaston offers insights into how P2P is reinventing the payment space.
Cash was once the default payment medium; now it’s becoming passé. Why?
Gaston: Over the last decade, the payment space has seen a boom in technology-based payment alternatives, including both mobile banking apps and digital payment platforms like PayPal, Google Wallet and Zelle®. Cash may have once been king, but consumers are increasingly drawn to the convenience, speed and safety of paying electronically.
Is cash obsolete?
Gaston: No, but people are definitely using less of it. As mobile transactions proliferate year over year, ATM withdrawals and branch visits are declining. In a recent U.S. Bank survey, 50 percent of the respondents said they carry cash less than half the time. When they do, nearly half keep less than $20 in their pocket and three-quarters keep less than $50.