A recent survey by US bank revealed that a growing number of Americans are using digital apps to make their payments. The growth of digital payments platforms, high level of smartphone penetration and reducing friction of online transactions have all made it easier than ever to quickly and safely process our transactions, and millennials are slowly warming up to a cashless society.
Key Points from the U.S. Bank Cash Behavior Survey:
47 percent of consumers surveyed say they prefer the use of digital apps to make payments versus cash (45 percent).
49 percent of millennials (aged 19-36), 44 percent of Generation X (aged 37-52), 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.”
Though U.S. numbers leave a lot to be desired when compared to China, where the Volume of mobile payments more than doubled in 2016 to hit $5 trillion.
But China has a different reason to embrace digital apps at a much faster rate than United States: low credit card penetration. Credit card usage is still low in China when compared to the United States, where nearly 176 million Americans had a credit card in 2015. But Chinese customers, instead of moving from cash to credit card and then to digital transactions, are skipping the credit card part and jumping straight to digital transactions, thanks to AliPay and WeChat, the two Chinese mobile payment processing platforms.
“Asia’s social and economic landscape is being transformed by the proliferation of mobile technology and digitalisation of financial services, which have built and enhanced digital connections. These connections are driving e-commerce and social commerce across the region, which are in part enabled by digital payments”
– Rohan Mahadevan, Chief Executive Officer, PayPal India.
The launch of Apple Pay, Samsung Pay, Android Pay and PayPal’s mobile wallet Venmo have now brought mobile payments a bit closer to consumers in the United States, and the country seems to be slowly warming up to digital transactions, moving ever closer to a cashless society.