Consumers say they prefer to use mobile or digital applications when making payments over cash, according to the U.S. Bank Cash Behavior Survey.
About 47 percent of consumers prefer the use of digital apps to make payments, while 45 percent prefer cash, the survey said. The practice is more common among younger people as 49 percent of millennials have used mobile payments compared to 44 percent of generation Xers, and 32 percent of baby boomers (aged 53-71) have made digital payments.
“The incredible consumer response to digital and mobile banking solutions is changing the entire industry and diminishing the historic use of cash,” Gareth Gaston, executive vice president of Omnichannel at U.S. Bank, said. “ATM withdrawals and branch visits are slowly declining, while mobile transactions are increasing dramatically year over year.
He said U.S. bank has witnessed this trend with its new mobile payment app, Zelle.
“In just the 30-day period since Zelle launched within the U.S. Bank Mobile App, the number of P2P payments sent by our customers have increased by more than 300 percent,” Gatson said. “It shows that the broad availability of free, easy-to-use and fast-acting technology is supplanting the need for cash.”
The survey also found that that 50 percent of survey respondents reported carrying cash less than half of the time. When they do carry cash, nearly half surveyed keep less than $20 on hand, and 76 percent keep less than $50. Further, 46 percent claiming they use cash fewer than eight days each month, and 5 percent saying they never use it.
Among other findings, more men (48 percent) than women (38 percent) have used mobile payment apps in the last six months.
When using cash, consumers prefer to spend it on dining (36 percent), travel/transportation (15 percent), parties (14 percent), and family functions (14 percent).
When using digital payment networks, consumers surveyed prefer to pay for bills (51 percent), items from another person (40 percent), gifts (35 percent), and concerts (8 percent).
Also, 73 percent said they were more likely to use a payment app if payments are secure and backed by a bank.
The survey polled 2,003 people from June 1 to June 7, 2017.