As technology continues to grow and change throughout the world, the way consumers pay for their products is also changing. Consumers are using credit and debit cards at an increasing rate compared to cash, even with small purchases less than $5. According to a survey, one third of American consumers said that they usually pay for purchases under $5 with a card rather than cash. Even more surprising, 51% of those between the ages of 18 and 29 reported that they prefer to use a card when dealing with transactions under $5.
The results of the survey, while surprising, reflect trends that will most likely continue over the coming decades. Debit cards have replaced the use of personal checks, and credit cards are beginning to replace cash for many young consumers. These trends have led most companies, and an increasing number of small businesses, to accept plastic cards for transactions, even with the fees they must pay to the credit card companies. As more and more consumers use credit cards for small purchases, surcharges for these cards could become more common. Currently in Australia, consumers pay an estimated $130 each year in credit card fees.
The convenience of credit and debit cards is now also expanding to mobile devices, where consumers can pay for products in store or online without carrying the plastic card with them. The use of mobile payments has been rapidly increasing in the past few years, as seen in the United Kingdom, where 8% of all online purchases are made using a mobile device. Mobile payments would allow for businesses that once were cash only, such as contractors, to easily offer mobile payment methods as alternatives to cash. The introduction of smartphones allows consumers to always be ready to make a purchase, giving consumers more payment options and helping increase sales for businesses that accept these mobile payments.
With the increasing amount of technology used in business and by consumers, the reduction in cash use is easy to understand. Along with the convenience that comes with cards and mobile devices, security issues are also becoming prominent. Businesses and consumers will have to invest more time and money into security practices to make sure their information and payments stay safe, but with the proper procedures in place, the use of mobile payments could very well change the way we do business.