Plastic Preferred: Cash To Decline to Just 23% of Purchases

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You know the old saying: “Cash is king.” But with cash transactions in decline, “Plastic is preferred” would be a more accurate adage these days.

[Click for full size version]

In 2011, cash transactions made up 27 percent of point of sale purchases. By 2017, that number is expected to plunge to 23 percent. Credit card purchases, on the other hand, are expected to increase from 29 percent in 2011 to 33 percent of purchases by 2017.

If your business doesn’t already accept credit cards, chances are your customers are asking you to. According to a survey conducted by WePay, 58 percent of small businesses are regularly asked by their customers to accept credit cards.

Customers increasingly expect to be able to pay with plastic, especially among the younger crowd. Sixty-nine percent of consumers between the ages of 18 and 34 will only shop at businesses that accept multiple forms of payment.

It’s not that hard to imagine a time in the not-so-distant future where saying “cash is king” will just show your age.

This infographic, by the Community Merchants USA site, gives the details on the changing payment trends and how they impact merchants.  Check out the full size version of the infographic on the Community Merchants USA site.

8 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

8 Reactions

  1. Ivan Widjaya

    Anita,

    It’s a strong trend, indeed. I even got to a point that I question the credibility of local businesses I visited that are not accepting credit cards as a payment method. To me, accepting credit card payment equals trust.

    • Ivan,

      I agree that accepting credit card payment equals trust and this gives consumers the convenience of making purchases especially for big ticket items instead of carrying thick wads of cash.

      Local businesses without credit card points-of-sales to accept card transactions will lose out more customers in the end.

  2. I prefer using a debit card as I like to know the money I’m spending is mine. Saying that though, I can see why there’s an increase in the preferred use of credit cards and why every small business should have it as a payment option.

  3. Hmm this could mean that more and more people are spending money that they don’t have which can be quite alarming if you’re going to view it with a financial point of view. I’m with ebele here. I’d rather use a debit card or just pay with cash.

    • Aira: Yes, I suspect it would indeed encourage more credit card spending, but I can imagine the argument for that would be freedom of choice on the part of the consumer and more cash flow for small businesses.

  4. Martin Lindeskog

    I understand if some small business owners don’t take credit card payments due to the charges with fees and other related costs with having a card terminal, etc. But with smart mobile payment solutions, e.g., Cube, Square, iZettle, it will be easier for the vendors and not a such high entry investment as in the past.

    As a personal side-note: I look forward to the day when I visit America again and give 1 American silver dollar (1 troy ounce) as a tip for a great service at a restaurant, coffee shop, etc.

    “silver is the money of gentlemen” – Norm Franz.

  5. It really confuses me when I see small businesses that only accept cash. I understand there are fees and issues that come with accepting credit/debit but considering how much more convenient plastic is – it’s definitely something all should consider.

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