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Cash use declines, mobile payments awareness grows, study finds

October 20, 2016

Sixty percent of consumers in North America use cash at least weekly to make purchases at a merchant location, down seven percentage points from 2015. Of all traditional payment methods, cash saw the largest decline in use over the past year, according to the Accenture 2016 North America Consumer Digital Payments Survey.

But even with the decline in cash use, it continues to be one of the most common payment methods, along with plastic.

North American consumers' use of debit cards for payments in merchant locations has remained consistent at 58 percent, while credit card use was up three percentage points to 53 percent.

While consumer awareness of mobile phone payments increased 4 percent year over year to 56 percent, the regular use of mobile payments remains flat at 19 percent.

"Consumers are content to use cash and plastic for their everyday transactions, and while the use of cash is declining overall, it is the most commonly used form of payment — and consumers expect it to remain so in 2020," said Robert Flynn, managing director of Accenture Payments in North America. "To shift consumers' payment behaviors will take more than just providing another 'me too' mobile payments option; leading merchants will identify and provide next-generation, value-added services."

Mobile payments at retail stores might be flat, but other digital payments are on the rise, according to the survey. Since 2014, consumer use of PayPal has increased four percentage points to 18 percent in 2016.

Consumers expressed optimism about mobile wallet adoption, expecting a nearly 60 percent increase in the use of mobile wallets by card networks (from 14 percent in 2016 to 22 percent in 2020) and tech giants (from 13 percent to 21 percent over the same period).

"The existing payments system isn’t broken, which is why consumers are not making a mass move to mobile phone payments adoption — the incentives are not there yet," said Michael Abbott, managing director of Accenture Digital for Financial Services in North America. "Consumers expect more in today’s fast-paced digital environment; just the ability to tap-and-pay is not enough. Payments providers need to bring the traditional card to life and create a real-time interactive experience for consumers."

Of the nearly two-thirds (64 percent) of consumers who have never used their mobile phone as a payment vehicle at a merchant location, more than one-third (37 percent) said they have not done so because they believe cash and plastic are fine for their payments needs.

Nearly 1 in 5 consumers (21 percent) prefer not to register payments credentials into their mobile phone  or are concerned that unauthorized transactions may occur (19 percent).

Nearly three-quarters (73 percent) of North American consumers said they trust traditional card providers the most as their mobile payments provider, followed by alternative payments providers such as PayPal (63 percent), established retail banks (62 percent) and large tech companies (59 percent).

Of consumers who have used mobile payments apps in store, 26 percent used their bank's mobile app most frequently, and 76 percent expressed satisfaction with this experience.

The Accenture 2016 North America Consumer Digital Payments Survey polled more than 4,000 smartphone users in the United States and Canada, and is the most recent report in Accenture’s multiyear research into how consumers want to pay now and in the future.