Ditch the Cash: Why Consumers Are Paying Digitally

Posted by Bethany Frank on 13 May 2016

Over the past five years or so, consumers have seen rollouts for novel P2P services, EMV chip cards, a host of mobile wallet apps, and more. This spark in interest and investment in alternative payment technologies has been driven by a number of prominent business sectors. The continued proliferation of new payment products and services confirms that consumer interest in cash alternatives is on the rise, and for good reason.


Paying with cash involves a certain level of imperfect calculation. Consumers rarely have on-hand the exact amount of money required to complete a transaction—they usually overestimate how much they need to avoid falling short, and the money left over often goes unaccounted for in the end. Change from broken bills tends to end up at the bottoms of purses or shoved into couches, but paying digitally prevents those few cents from ever escaping a customer’s account.

Electronic payments allow consumers to “keep the change” every time. Precise transactions in lieu of rounded cash withdrawals can add up to significant savings much faster than one might think. By reducing grey areas and unnoticed expenditures, these payment alternatives allow for more accurate budgeting. Disciplined use of a digital payment method can help consumers account for every single cent that leaves their accounts. In addition to the pure savings, consumers can take advantage of special perks for paying without paper. A number of big-name retailers, for example, offer rewards and discounts to customers who open a credit account with them and use it to make purchases.


Some consumers are still wary of electronic payment methods and perceive them to be less secure than cash. But while it’s too soon to determine whether or not electronic payments are undoubtedly safer than paper payments, it’s flawed logic to believe cash or checks are more secure. In fact, checks and cash could put consumers at greater risk, as there is no way to account for physical currency if it is lost or stolen.

On the other hand, data-based trails left by electronic payments make it easier to detect fraud or other unauthorized activity. The risk of somehow losing physical cash is eliminated entirely, and around-the-clock online access to statements and account activity give consumers peace of mind. In order to accept payments electronically, businesses must adhere to strict security compliance that ensures consumer information is kept safe and everything is processed securely.

Speed and Convenience

Innovative technology is fueling a faster pace of life, and consumers need products and services that keep up with their hectic routines. Perhaps the largest drawback of traditional payment methods is their incompatibility with the expanding digital universe. The more technology becomes embedded into everyday life, the less useful cash, checks, money orders, and the like will become.

The Internet of Things is poised to have a particularly notable impact on the development of mobile, wearable, and real-time payments. Payment methods that slow consumers down are likely to cause frustration and become obsolete as the world modernizes, especially as millennials become a more significant and financially powerful demographic.

Consumer preferences surrounding payments are starting to change as convenient alternatives emerge and more people embrace new financial technologies. Credit cards, mobile payment apps, wearable tech, and even selfie payments are all replacing cash worldwide. For businesses keen on keeping up with demand, offering a variety of electronic payment options will be crucial to maintaining customer satisfaction over time.

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Bethany Frank Senior Marketing Associate Bethany specializes in content and events as part of Alacriti's marketing team. She's a graduate of Rutgers University and has a background in writing, broadcasting, and digital media. Fascinated by the intersection of technology and human nature, Bethany is out to explore what drives consumers in such a fast-paced, digitally connected world.

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