Cash Still Has a Place in the Transaction Industry
Much has been written about how we are moving toward a cashless society, but do not count cash out quite yet. According to research from PYMNTS.com, digital wallets and contactless payments have a long way to go before they replace cash entirely. In the United States, the use of cash has held steady since 2003 at 14.3% to 15.5% of GDP.
A new app may expand cash’s lifespan even more. PayNearMe allows consumers to pay their bills with cash at retailers such as Family Dollar or 7-Eleven. Mike Kaplan, the company’s senior vice president of business development, said the company wants to help customers pay their cell phone and utility bills if they do not have a bank account or simply prefer paying in cash.
“There’s a perception that consumers either can’t or won’t pay their bills in cash. But families earning less than $25,000 use cash for 48 percent of their transactions, and those who earn between $25,000 and $50,000 use it for 33 percent of transactions,” Kaplan said. “So that equates to roughly 45 percent of households who are using cash for at least a third of their transactions, and that’s a huge market, and the lack of services to pay bills with cash is a relatively big problem.”
Why are people still paying in cash? Kaplan says some Americans simply feel more comfortable using currency over a payment card or digital payment method. Other consumers are being paid in cash by their employers.
“For a lot of these folks, this is how they get paid—they get paid in cash,” Kaplan explained. “Changing consumer behavior is hard. If you get paid in cash and that’s what you’re used to, that’s what you’re going to be most comfortable with. Any of these new payment methods need to prove that they are easier and faster than those consumers are currently used to, and right now that just isn’t there.”
To use PayNearMe, consumers simply need to add billers before they visit one of the retail partners. At the location, they present the barcode for the biller to the cashier and pay the amount they wish.