55% of US mobile users can’t live without cash

Brief:

More than half (55%) of U.S. mobile users said they hate the idea of life without cash, signifying a major hurdle for banks, payments processors and tech companies that urge consumers to adopt digital wallets, according to a survey by Origin, Hill Holliday's independent research arm. About three-fourths (76%) of mobile users carry cash, and 45% said there's no reason to use mobile payments.
Smartphone users also face social pressures to avoid making mobile payments in settings like restaurants, Origin found in a deprivation study that asked 10 adults to try going cashless for a week. "I asked if the restaurant accepted mobile payments and the waitress looked at me disapprovingly," one participant said in the report.
Younger consumers are leading the way with the adoption of mobile payments, the study found. Among survey respondents under 40, 22% said they use mobile payments daily, while 45% of people over 40 said they've never used mobile payments.

Insight:

Origin's study of mobile payment usage indicates that some habits are hard for U.S. consumers to break. Not only does cash provide convenience, privacy and anonymity to consumers, but it's also readily accepted by virtually all businesses. While cashless payments promise to make transactions more secure, many businesses are reluctant to accept mobile transactions because of costs around adopting the technology and a perceived lack of interest among consumers.

"Brands still have a lot to learn about which consumers will go cashless, and how they can help them get there," Katherine Schilling, strategy director for Hill Holliday, said in a statement.

The study confirms other reports about the lack of consumer adoption around digital wallets. Last year, the portion of online merchants that accepted Apple Pay and Google Pay declined, according to a survey from fraud detection platform Kount.

While cash is still the top way that people pay back friends and family, per Origin's survey, person-to-person (P2P) payment apps are gaining major interest among consumers, other research suggests. The most popular payment apps on mobile devices in the U.S. are for P2P transactions, eMarketer found. It estimated that P2P adoption of apps like Venmo will grow to 96 million users this year, or 40% of all mobile phone users, from 82.5 million in 2018. But for the millions of consumers who don't use P2P payment apps, cash is still king.

The slow shift toward cashless payments in the U.S. faces resistance on multiple fronts. San Francisco lawmakers are considering a ban on cashless stores like Amazon Go. New Jersey and Philadelphia have enacted similar bans, arguing that cashless stores discriminate against low-income shoppers who may not have the means to maintain debit or credit cards, further isolating a portion of consumers. Amazon earlier this month confirmed it would begin accepting cash payments in its Go locations, but did not specify a timeline, nor did it provide details as to how it will accept cash payments in the stores.