Think Cash Is Dead? Millennials, Cardtronics, and Bank of the West Beg to Differ

brought to you by WBR Insights

Talk of the slow but inexorable march towards a cashless society has been permeating financial discussions for years now.

From conspiracy-laden rants about money becoming completely virtual, to more nuanced debates on the costs and benefits of digital convenience versus tangible wealth - the idea that cash may be on the way out is certainly fascinating and comes with no small number of implications for the financial industry and society as a whole.

However, recent research by Cardtronics and a partnership with Bank of the West suggests it may not be time to sound the death knell for cash just yet.

Millennials and Cash

The generation of people born roughly between 1981 and 1996 (although as with all generational parameters the exact dates are disputed) is featured heavily in discussions around business and society these days. As members of this demographic now find themselves in their twenties and thirties, they are the ones making the decisions which shape society.

And, unsurprisingly, it's millennials who are often named as leading the charge into a cashless society. Their preferences for online shopping and the convenience of contactless debit/credit cards and services such as Apple Pay and Google Pay are all leading more people to rely less on having a pocketful of notes and coins - even in situations where this would have previously been expected, such as bars and nightclubs.

However, in the 2018 edition of its annual Health of Cash study, ATM provider Cardtronics has discovered that this logical and widely-held assumption may not be entirely backed up by the numbers.

The study identified four core situations in which consumers were more likely to use cash than relying on electronic payment means:

  • When paying each other: more than 70 percent of respondents said cash was their preferred means of paying back a friend or family member.
  • When being paid by each other: nearly 65 percent of respondents said that, given a choice, they would most prefer to receive money from a friend or family member in the form of cash.
  • When completing small, everyday purchases: 60 percent of consumers say they'd prefer to pay cash when making in-store purchases of under $10, and 56 percent would still use cash if the purchase cost between $20 and $30.
  • Cash was also identified as being the preferred choice for small peer-to-peer payments, such as paying a babysitter, or for discretionary payments, such as tipping a waiter when dining out.

More importantly, these numbers held true regardless of age group, suggesting that millennials are still likely to rely on cash for these kinds of payments.

"Consumers see cash as a payment method they can count on anytime, anywhere," said Executive Vice President and Managing Director for Cardtronics North America, Brian Bailey. "It's accepted everywhere, or so they believe, and they experience frustration when discovering they cannot use it to pay somewhere. So, if you're a small merchant thinking about eliminating cash, think again! The anti-cash mentality is most harmful to small merchant businesses. Some lawmakers are even contemplating regulation requiring merchants to accept cash."

Bank of the West

Armed with these findings, Bank of the West has recently partnered with Cardtronics to add 143 ATMs across the Denver and Sacramento metro areas with the specific intention of promoting more cash use amongst the millennial demographic.

This is being achieved by offering more digital services - like those you expect to find in-branch - alongside cash dispensing and other conveniences likely to be appreciated by millennials, such as the ability to draw out cash in smaller denominations. The ATM locations have also been selected specifically for their relevance to the millennial market. Locations such as convenience stores, bars and nightclubs, shopping malls, and other places millennials are likely to gather.

"This rapid expansion of our ATM locations in Denver and Sacramento reflects our commitment to delivering convenience and exceptional service," said Executive Vice President and Head of Retail Banking at Bank of the West, Ryan Bailey. "For our customers, we want to meet them where they are; whether in a branch, online, in our mobile app, or at an ATM in Walgreens."

Final Thoughts

The modern idea of the branch extends far beyond the walls of the brick-and-mortar banking location. ATMs are now a core part of the branch network and customers expect to be able to access more services through them than would have previously been assumed. With the news that cash is still a preferred payment in many situations, maybe now is the time to revisit your own ATMs and see what improvements can be made.

Future of Cash is set to be a hot topic at Future Branches Boston, taking place in July.

Download the agenda today for more information and insights.

Return to Blog