Cash use may give way to plastic in the future
June 05, 2013

Experts have claimed that the future of payments will be cashless, but a recent study from Market Platform Dynamics found that may not be the case. While debit and credit card use is on the rise, customers sometimes reach for cash for smaller purchases. It may be too soon to know the long-term relevancy of cash in the digital age, but companies that employ integrated payment solutions offer customers enhanced benefits by allowing them to use their preferred purchasing method. Electronic payment solutions provide the most advantages for small- and medium-sized businesses to drive sales, no matter what payment platform customers choose.

Cash may evolve with digital payments
The study, titled "Payments Innovation and the Use of Cash: Will Cash Really Die - and if so, When?", observed the markets of 10 countries to determine the future of payments. The study examined whether cash was on the rise or declining across the globe, concluding that cash use will shrink but may not disappear entirely.

By researching how customers use cash instead of the total amount of revenue from the purchasing option, the report found the payment method may be on the rise across the globe. The study looked at the flow of cash from consumer to retailers - a type of payment recycling - and reported that the total use of cash grew while customer use of cash dropped. 

The recent growth of electronic payment solutions and customers reaching for plastic at the point of sale may not be felt for some time, according to the report.

Karen Webster, chief executive officer for Market Platform Dynamics, said during the study's presentation that cash may stay in use for the foreseeable future and may change as digital payment methods evolve.

"[The study] turns perceptions about cash into a set of tangible and actionable metrics that help the industry understand how cash will evolve alongside mobile and the other payments innovation that will certainly come our way over the years," Webster said.

Innovations in payment processing may cause the decline of cash, but it may be too soon to say the future is cashless. SMBs that offer customers multiple payment options are set to increase sales and customer satisfaction. The study concluded that cash may evolve with mobile and payment innovations, and companies that have already implemented integrated payment platforms are ahead of the competition.

Nexus: G-WEBCD1