Friday, August 17, 2018View Showroom
The role of cash as an essential tool when digital payments go offline went on display last month when the Visa network in the United Kingdom and Europe experienced a large-scale service disruption. The event on June 2 rendered retail chip and PIN card purchases impossible and put a spotlight on payments challenges in true emergency situations.
Card issuers were telling customers to use ATMs and grab cash. In-store and online shopping ground to a halt. Irritated customers at convenience stores, supermarkets, retail stores and banks voiced their frustrations on social media until the outage issue ended over five hours later.
While the payments chaos was short lived, it demonstrated the fragility of digital payments, and showcased in stark relief the risk inherent in a digital-only, cashless society. The digitization of payments is not fool proof and cash-based payments are critical, even for digital-first consumers, when the digital gears stop moving.
As Cardtronics’ 2017 Health of Cash Study made clear, nine out of 10 consumers favor the ability to pay with cash and other payment methods, and prefer cash for low-value purchases. More than three in five disapprove when cash isn’t accepted. Other data verify the sustainability of cash. The G4S Cash Report 2018 reports that cash in circulation relative to GDP increased 9.6 percent across all continents between 2011 and 2016. In Europe, 80 percent of POS transactions are conducted in cash; while in North America, cash use accounts for 31 percent. In Asia, while online purchases have risen, 3 out of every 4 are paid for by cash on delivery.
After the Visa incident, consumers were advised to rely on multiple payment methods should an emergency such as the Visa outage arise, and this advice is consistent with that of personal finance experts. A payments mix is essential for emergencies, whether caused by the payments networks themselves, Mother Nature, or anything in between.
Personal finance expert Paul Lewis encourages that consumers, “carry two or three cards, on different networks and providers, and also some cash for your immediate needs.” (And it seems many consumers are taking Paul’s advice – the 2017 Health of Cash Study found that 85 percent of all consumers always try to keep cash on hand, and two-thirds say they feel nervous when they don’t have cash with them – even among millennials, with 70% agreeing to this.
And while no payment method surpasses cash for emergency situations, cash is an essential payment form with many benefits for our day-to-day lives. As shown in our Health of Cash Study, cash continues to be a preferred payment method for consumers for many reasons, including:
The recent Visa incident is a perfect example of the importance of payment diversity, whether you prefer card payments, mobile payments, or reliable cash.
Cardtronics - Champions of Cash