Millennials: Checked Out on Cash

A segment of NerdWallet’s article: “Millennials Checked Out on Using Cash.”

“About one in four millennials carries less than $5 cash on them seven days a week, according to a 2014 study by the Independent Community Bankers of America. Almost three-quarters of millennials also said that mobile banking was “very important” to them.

Because millennials represent about a quarter of the U.S. market, according to U.S. Census data, this migration away from cash could affect how many in the country think about spending and saving.

“We haven’t seen such a seismic shift in payment as we’re seeing right now,” says Jason Dorsey, chief strategy officer for The Center for Generational Kinetics, which co-sponsored the community banking study.

 A different kind of safety net

One reason millennials don’t carry cash is because they see it as a liability rather than a safety net. Unlike credit or debit cards, which can be canceled, there’s little hope for recovering stolen paper currency.

“I’m worried I’ll leave
 my purse in a cab or hanging on the back of a chair and then I’ll never see
 that money again,” says Meagan Rhodes, (@Pay‘s Digital Marketing Lead). All she carries is her iPhone, credit card, debit card, lip gloss and driver’s license, she adds. She takes comfort in knowing that if these items are lost or stolen, they can be easily replaced.

For millennials like Rhodes, security advancements for non-cash payment systems are good news. By October 2015, most retailers will have EMV chip readers, which will eliminate most credit card fraud in the U.S. by authenticating purchases through cryptographic algorithms. Tokenization, (such as @Pay or ApplePay uses), which allows you to make purchases without giving out your credit card number, will also make future digital payments more secure.

But despite these new measures, paying digitally might also encourage consumers to spend more.”

Read the original article on NerdWallet to learn more about millennials’ cash-free, paperless future.

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