Mobile payment methods like Apple Pay, Google Wallet and Paypal are bringing more options to consumers making purchases at brick-and-mortar stores. To keep up with consumer preferences, lower transaction costs and gather customer data, retailers are even developing their own mobile payment technologies. Walmart launched a new payment function in their mobile app at the end of 2015 called Walmart Pay. According to Neil Ashe, Walmart’s CEO of global e-commerce, the goal is to make it “as simple to pay in the store as it is to pay online.”
Millennials are often early adopters of new technology, so it wouldn’t be surprising if they were quick to ditch cash and adopt mobile payment technology, but that isn’t the case.
Despite the emergence of new technology and a variety of payment options, the future of cash is bright. In a survey of over 1,000 consumers by Cardtronics, cash payments were dominant for purchases made in convenience stores, grocery stores, small businesses and restaurants. Another key finding of this survey was the behavior of millennials, almost half of whom said they were more likely to pay with cash now than they were a few years ago. Retailers should take note. Not only is cash still king, but when factoring in millennial trends, cash is on the rise.
According to Forbes, millennials are the largest generation in history, and they will soon command the largest wallet power. It is estimated that millennials will be spending $200 billion annually by 2017 and $10 trillion over their lifetimes as consumers, in the United States alone. The combination of wallet power of millennials and their increase in cash usage cannot be ignored by retailers.
It is important for retailers to not only invest in new payment technology, but also invest in their currency management strategy. Shoppers expect to be able to pay with their preferred method, and they expect the transaction to be smooth, creating an excellent customer experience. Being prepared for various payment methods is a critical step toward delighting customers.