Many consumers have returned to using cash, driven by fear of using payment cards that merchants might let get compromised with insufficient protections. As the amount of cash they handle increases, a new survey report suggests merchants in turn should work to improve their cash-handling processes to accommodate the payment-method shift.
By Jeffrey Green (@epaymentsguy)
Despite the recent spate of major merchant data breaches, consumer confidence in credit and debit card use remains relatively strong, albeit bruised, recent survey data suggest. However, many consumers are switching back to using cash, putting pressure on merchants – especially supermarkets – to improve their cash-handling policies.
In a survey last month of 1,488 consumers, Balance Innovations found that 39 percent of respondents were “very confident” that using a credit or debit card was safe, while nearly half, 49 percent, said they were only “somewhat confident.” Looking more closely at shopping at local grocery stores and whether respondents had changed their payment methods in response to the breaches, 32 percent had made a move toward cash.
“Retailers have seen the cash tender increasing the last couple of years, and even more after the recent credit card breaches,” Lee Jurgens, board chair for the Merchant Advisory Group, said in the survey release announcement.
In a recent PYMNTS.com podcast interview, Steve Rathgaber, CEO of Cardtronics Inc., a leading owner and manager of ATMs globally, indicated that he foresees no impact on cash in the near future from the continued efforts to electronify paper-based transactions.
210 Analytics LLC conducted the online, Balance Innovations-sponsored survey in February. According to the findings, only 30 percent of shoppers ages 50 to 64 said they were very confident about using a credit card at their primary grocery store, while younger shoppers ages 18 to 24, at 48 percent, were more trusting, though 46 percent said they do now use cash more often.
At 53 percent, supermarket shoppers placed the highest confidence in payment security compared with 33 percent of supercenter shoppers. Consumers’ food-safety confidence, with 49 percent being “very confident,” exceeded their trust in payment security (39 percent), according to Balance Innovations.
With an increase in cash usage, retailers could see more time spent managing cash and other tenders at the store level. “Many consumers like to use cash because it’s anonymous and carries little risk, but for retailers it can be very time consuming to manage and reconcile,” Shelley Bosler, Balance Innovations senior vice president for strategic initiatives, said in the survey findings announcement. “Increased usage of cash among consumers makes it all the more important for retailers to optimize cash processing policies at both the corporate and store levels.”
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