Rise of m-POS Hastens Move Away from Cash (June, 2, 2014)
The spread of m-POS platforms has accelerated the decline of cash, according to a new report revealing that the volume of cash used in POS transactions in the U.S. dropped 10 percent between 2012 and 2013. The study by Javelin Strategy & Research found that POS cash payments fell to $788 billion in 2013, down from $874 billion the previous year. Cash volume is projected to steadily decline further over the coming years, reaching $711 billion in 2019.
The shift away from cash in the U.S. can be attributed largely to the rise of mobile card readers like Square, which enable small merchants to accept payment cards, the report said. “For years, many small merchants have been unable to accept electronic payments due to high processing costs or an inability to support a traditional terminal. But the necessity of cash and checks has been eroded by the popularity of mobile card readers . . . which easily and inexpensively enable mobile devices to accept card payments,” said Nick Holland, senior analyst, payments for Javelin and author of the report.
Despite its loss in payment volume, cash is still king as far as frequency, remaining the most commonly used form of in-store payment. Sixty-five percent of U.S. consumers reported using cash over the previous seven days, according to the report, which was based on a survey of more than 10,000 consumers.
A recent U.K. study shows cash usage waning there too. The number of in-store payments using cash in the U.K. has dropped 10 percent over the past five years, to 53 percent in 2013, according to The British Retail Consortium. Even smaller purchases have been moving to plastic; debit cards now are used in more than 50 percent of all U.K. in-store sales, and the average value of debit transaction is declining.
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