Over the past decade, technological developments and modern payment methods brought abrupt changes in society. Specifically, millennials are swiftly adopting advanced payment procedures, including mobile payments. However, when it comes to brick-and-mortar stores, they prefer to use cash. Federal Reserve report shows that millennials use the cash more than Gen Xers or Baby Boomers do.
Why Do Millennials Prefer Cash?
Bankrate.com recently conducted a survey that reveals millennials today prefer cash to credit and debit cards. The report discovered that only one-third of young consumers carry credit or debit cards instead of money, whereas the rest of the respondents agreed they are more likely to take cash.
Among the ones who use plastic cards to make transactions, merely half of them used their credit or debit cards usually once a week. The report indicates a significant change in the way millennials spend their money. Not to mention, young consumers have little income, as they are struggling with their student loan debts and employment.
However, millennials are also aware that making purchases on credit only will increase their debt. Using cash allows young consumers to monitor their spending. In addition, it is more convenient than mobile payment methods, such as Venmo or PayPal.
According to a recent report conducted by a financial services company, Aite Group, half of the Millennials have only one rewards card, as compared to 40% of seniors and 27% of Gen-Xers.
A report further reveals that young consumers use their rewards regularly. However, even though they are keen on rewards, they are less likely to pay an annual fee for the credit card. For the following three reasons, millennials prefer using cash.
- At the time of the Great Recession, the economic crisis affected millennials drastically. Burdened with student loan debt and struggling with unemployment, they adopted strategic plans to invest their money in different areas. Rather than opting for additional debt, such as using a credit card, they prefer to use cash.
- Millennials have less income than their older generations; a study by Fed study says that people who earn less than $25,000 are far likely to use cash than people who earn more than $75,000.
- Trends show that they make plenty of smaller value purchases; 27% of millennials reported to spend more on coffee than saving money to use after their retirement period. Since such stores usually contain ATMs, millennials withdraw cash and make a payment right away. They find it a more convenient option to make payments for small purchases rather than using a card.
Wrapping it Up
Considering the recent surveys and change in consumer behavior, it is clear that Millennials today profess a love for cash and prefer using banknotes for transactions rather than plastic cards. Their spending behavior demonstrates risk intolerance about using a credit card, as it can cost them big.
Therefore, if you are thinking to install an ATM, it will be a great idea, since you will have more people using your device to withdraw cash.
In case you are not sure which ATM to choose, you can reach out to MOBILEMONEY. Their expert team will help you in selecting the cash machine that best suits your business requirements.