While the world has undoubtedly become more digitized, and a good bit of commerce has moved online, consumers are still very attached to cash. It may feel like everyone pays with a swipe of a phone for everything they buy now, but recent research into how Americans pay shows person-to-person transaction still make up the bulk of shopping experiences. What's more is that cash is inherently tied to such interactions, and having cash counters ensures your business succeeds with the consumer.
This insight into the ties between consumer behaviors and cash comes from the Federal Reserve's Cash Product Office. A recent paper by the office found that in-person transactions account for 90 percent of all such shopping events. Physical interactions at retail stores, vending machines and gas stations account for the vast bulk, and cash is most often associated with those in-person visits than on-demand services. Such services, like apps for transportation, entertainment, task management, and more, are most likely to be paid by using cashless processes, but on-demand has only a small share of cash-based transaction. This being, their impact in shifting payment toward a cashless environment is blunted.
For instance, the CPO noted if half of transportation transactions became on-demand, cash payments would only decline 1.4 percent. Essentials like food and personal care products represent some two-thirds of all cash transactions,which brings a high concentration of cash payments to brick-and-mortar stores. It's a big slice of the overall transaction pie: E-commerce sales took in just 7 percent of all retail sales, according to the CPO, limiting the effect of cashless payments.
The importance of a seamless in-person transaction cannot be lost on these physical storefronts. Having a structure in place to process payments will help businesses profit from the wealth of cash-based transactions that occur in real life. An effective cash counter is essential to this, and investing in the best equipment to handle the load is a must.
November 1, 2016