Millions of consumers felt a twinge of panic when the scope of last year's
The use of cash is dwindling, but greenbacks are still the payment method of choice for a significant portion of purchases. Cash was used for about
While cards have long been positioned as a safer alternative to cash, which can be lost or stolen, the reality is that today's consumers may view identity theft and data breaches as more likely occurrences than a pilfered wallet. The highly anticipated arrival of EMV cards should bring improved levels of security for card transactions. But merchants face an October 2015 deadline for improving technology to accept EMV cards. At least until those new security measures are in place, cash remains the most trusted and secure form of payment.
In light of recent history, financial institutions should reconsider the notion of promoting card use for every transaction, no matter how small. For one thing, if more customers use cash, they will visit branches and ATMs more frequently. This will give banks a greater number of one-on-one customer interactions and cross-sell opportunities.
A greater emphasis on cash would also help banks cut back on the costs associated with card replacements. The
While a new payment app seems to appear every day, it is unlikely that any single innovation will render cash obsolete. Consumers who use cash ultimately avoid the high levels of risk associated with swiping plastic and leave no trail for hackers to follow. Those kinds of advantages never go out of style.
Douglas Ceto is chief executive and president of Atlanta-based CetoLogic, a provider of software and analytics solutions for financial institutions and retailers.