Despite the Hoopla, Most Fintech-ers Think U.S. Will Never Become Cashless
PREMIUM — Digital payments are on the rise across the globe. In the U.S., the world’s largest economy, the use of mobile payments has increased significantly in the past two years. Add to that mix the prevalence of e-commerce and, the growing popularity of P2P apps, such as Venmo and Zelle, as well as digital banking.
And it still doesn’t matter.
Bank Innovation conducted a poll in which it posed the question: when will the U.S. become a cashless society? The majority of respondents’ answer: the U.S. will never truly be cashless.
Of the 736 readers that took the poll, 60% voted that the U.S. will never be cashless. Only 6% voted that the U.S. would be cashless by 2020, while 23% said the country would be cashless in 10 years. And this is the opinion of Bank Innovation readers, who tend to be more forward-thinking.
In the U.S., the preferred methods of payment are debit and credit cards. In fact, a recent report by Finastra showed that 95% of Americans have at least one credit or debit card. Checks remain a popular method of payment in the U.S., particularly among corporations.
Even the card networks remain reoccupied by cash.
“If you look at payments in terms of opportunity, it’s leaning toward digital payment, [but] 85% of payments are still done in cash,” Oran Cummins, senior vice president of APIs at Mastercard, told Bank Innovation today. “Cash really is our competitor.”
Still, The Clearing House (TCH) is currently working with U.S. banks to deploy a real-time payment system that looks to shift such B2B payments from check to the more modern digital methods. However, it remains unclear how long it will take all U.S. banks to be real-time ready (more details on how banking are preparing for RTP here).
As for consumers, mobile payment volumes are stilling rising, even though as e-commerce payments via PayPal and others have been around for years. Digital payments and e-wallets still have a long way to go before they can compete with debit and credit cards (more on this here).
Bank Innovation’s poll was conducted on its site between mid-April and early June.
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