In a survey that MasterCard commissioned in Australia, most participants said that they preferred contactless payments compared with cash. But the fineprint tells a different—and more perplexing—story.
The card brand said the survey audience was “1,005 Australians aged between 18-64 years old, who have a credit or debit card.” Nothing about them having an NFC-friendly smartphone, which is an important detail when gauging the interest and acceptance of contactless payments.
Of those surveyed, only 64 percent said they preferred contactless to cash, which means 36 percent still preferred cash. (See why it’s critical to know if they even have the ability to do mobile payments?) Even worse, it wasn’t a reference to all cash payments, but it was limited to “small transactions under a $100 instead of entering their PIN,” MasterCard said.
That raises the question of what would happen to that 64 percent stat when it tops $100 and PIN-entry becomes an issue? Does paper money regain its favored spot in Australian consumer wallets?
Also, some media reports linked to those stats with Australians’ new ability to use Apple Pay. But not only is that Apple Pay capability limited in Australia to Amex cards—and this was a MasterCard survey—this survey was conducted in October, many weeks before Australians could use Apple Pay at all.
In the statement that MasterCard issued, the card brand said this love of contactless payments impacts “Australians of all ages,” despite the fact that the survey was limited to Australians 18-64. There are a lot of 16- and 17-year-old contactless payment (especially mobile) shoppers and, yes, Australians continue to function when and even after they turn 65.
MasterCard SVP and Australia Country Manager Andrew Cartwright said in a statement that he saw several reasons for this contactless embrace.
“This research indicates not only a shift in the preferred methods in which consumers like to pay, but also suggests that they are beginning to understand and trust the safety benefits associated with paying by card. As contactless payments continue to rise, cash is increasingly become unnecessary real estate in wallets,” Cartwright said. “I’ll take a card any day of the week – it is safer than cash. With a card, I’m protected against unauthorized purchases whereas, if my wallet is stolen, the cash is as good as gone.”
There is little debate that cash usage will continue to shrink over the next several years, nor is there any realistic chance that cash will disappear in any industrialized nation any time soon (meaning within 15 years and potentially 20 years). Checks will vanish sooner, but even checks have at least a decade of life yet, although check usage will be mighty rare after about 2020.
But it’s important to remember what is giving cash and paper currency its staying power. No training of the consumer nor the associate, which means no behavioral changes needed. If the phone runs out of power, paper money still works. POS problems—network outage, store power loss, an ordinary software glitch, etc.—can interfere with every other form of payment, but cash almost always is accepted.
Cash is its own form of discipline, in that you can’t spend more than you have. One could theoretically say that of debit cards, but if a married couple share the same account and both hit the debit card at the same time, all kinds of unpleasant things can happen. Cash is not shared and yields almost no surprises.
Arguably the most significant factor that keeps some consumers clinging to coins and cash is privacy or, more precisely, the fear of being tracked. The sad truth is that using cash-only only slows down the tracking systems, especially with mobile signals being tracked, facial-recognition software incorporated into some retail security camera systems and license-plate-lookups with parking lot security cameras.
But the consumer perception still is that cash somehow makes a shopper invisible.
Yes, cash usage is dwindling—in Australia and everywhere else—and it does lose in a functionality and security fight with contactless and especially with mobile payments. But for consumers, there’s a lot more going on so don’t count cash out any time soon.