Thryv Study Shows Cashless Behavior Has Taken Root

Evidence keeps rolling in that many of the habits we formed during the pandemic have become permanent. One such habit is the growing movement away from cash.

Let me offer a sample of one. I was not a big cash user before the pandemic. Now, I can’t even recall the last time I visited an ATM.

Based on a new study from Thryv and Payments Dive (sample size 2,050), it appears I am not alone. The study found that cashless and touchless payments, hallmarks of our Covid dystopia, have become ingrained habits even as we return to normal. This includes everything from shopping in malls to heading back to the office.

The Thryv study defines contactless payments as digital wallets, tap to pay, and contactless point-of-sale terminals.

The study found that almost 60% of consumers are using cashless and contactless payments more since Covid. And 71% say they will continue to use them more going forward.

Most retail businesses have probably learned this lesson the hard way. For service providers, the need to get with the program on digital payments may seem less obvious. But it can make a big difference if a consumer has a choice between you (cash and checks only) and a competitor who got the memo on digital payments.

In fact, the study found that 73% of consumers consider payment method acceptance when choosing between two businesses.

“More than 50% of my business this year has been cashless,” Andy Corman, owner of AC Trash Hauling, an Indianapolis junk removal business, told the researchers. “I can send a bill online and I can get paid before I leave the driveway.”

Big Ticket, No Cash

The study found that the bigger the ticket, the more consumer want to use a digital form of payment. This is mostly about security.

As the study report notes. “Federal laws oversee debit and credit cards, giving customers protection against poor service or a shoddy product. They can also better protect against fraud when purchasing online with the cards, adding another layer of control. When paying for a larger item or service, these protections become that much more valuable.”

Generational Divide

It’s also unsurprising that there is a significant generational component to the preference for contactless and cashless living. In fact, 80% of GenZ consumers plan to use contactless payments in the future. While among Boomers the number is 57%. While that is a significant gap, it is still remarkable that a majority of all generations prefer a future defined by contactless payments future.

“Digital payments are all the younger generations have ever known,” Cantor says. “They don’t carry cash, instead opt for a phone or a debit card, and that’s how they want to pay. If you’re not affording that to them, they are going to move on.”

And the figures were similar when asked about their preferences for cashless payments for larger ($1,000-plus) purchases. The figure is 59% among Boomers. Among GenZ’s it’s 71%.

There is another byproduct of this cashless shift that businesses need to be aware of. The practice of assessing fees for credit card purchases will not fly anymore. It doesn’t matter how justified the business owner feels based on the fees they pay to the card processors.

A full 57.3% of consumers say they are not willing to pay the “convenience fee” for credit card use. In this environment, consumers see this simply as a cost of doing business.

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