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Thursday, April 25, 2019

Americans prefer cash more than mobile payments

Despite the proliferation of new payment form factors – from cards to mobile apps – most Americans still carry cash, and better than half hate the idea of life without cash. What’s more, just over 45 percent of Americans say they see no reason to use mobile payments, according to a new study.

Not surprisingly, younger consumers are more likely to use mobile wallets and app-based payments, like Apple Pay and Venmo, than their elders. Cashless Culture, a new study from the marketing agency Hill Holliday, revealed that 88 percent of consumers under the age of 40 have tried mobile payments compared with just 55 percent of those over the age of 40.

Consumer commitment lacking

But even tech-savvy younger consumers remain uncommitted – just 22 percent say they use mobile payments at least once a day. Even those consumers, young and old, who use mobile payments tend to be newbies: 58 percent began using mobile payments within the past year, Hill Holiday reported. Americans are most inclined to use cash when paying for groceries, meals, subway tickets, taxis, movie tickets, charity donations and when tipping, the survey revealed.

“We were really surprised how attached to cash the average consumer is,” said Katherine Schilling, strategy director of Hill Holliday. “The user experience isn’t quite there yet for mobile and app-based payments, and many businesses still struggle with the transaction technology.”

Tech shortcomings just one barrier

Consumer attachment to cash has been on display in recent months with consumer advocates and public officials accusing retailers that go cashless of discriminating against customers who cannot or prefer not to use electronic payments.

The public outcry was enough to convince Amazon to make plans for accepting cash at Amazon Go stores. Amazon Go outlets are cashier-less storefronts, where shoppers use a mobile app to ring up purchases and have them posted to their credit or debit cards. Amazon confirmed to several news outlets that it is working on a plan to accept cash at Amazon Go stores

Meanwhile, JCPenney made headlines this month when it scrapped mobile payment acceptance. The retailer said the move was necessary because it was unable to meet a deadline for bringing all of its mobile payment acceptance technology into compliance with EMV security guidelines. Under a 2017 Visa mandate, U.S. merchants accepting contactless (NFC) payments (for example, Apple Pay, Samsung Pay and Google Pay) had until April 13, 2019, to retire POS devices that supported both NFC and legacy magnetic stripe data technology.

“Given the resources and lead time associated with meeting the new mandate, JCPenney chose to suspend all contactless payment options until a later date,” the retailer said in a statement. The statement also noted that “the vast majority of JCPenney shoppers” use cards, not mobile devices at its points of sale.

Retailers could do more

Schilling suggested retailers may be to blame for lackluster consumer adoption of mobile payments. “Brands still have a lot to learn about which consumers will go cashless and how they can help them get there,” she said.

The Hill Holliday study revealed not only a lack of consumer awareness and familiarity around mobile payments, but also a willingness to learn. Twenty-three percent of the 1,000 consumers surveyed said they didn’t know how to use mobile payments, and an equal share didn’t know where they could use mobile payments. Twenty-nine percent said POS cues describing how mobile payments work would increase their willingness to go cashless and cardless, while 35 percent said cues letting them know that a store accepts mobile payments would increase their willingness to use that option. end of article

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