Are consumers pushing back against the cashless trend?
If you've kept pace with the commentary I've written on this site over the last four years, you'll know that I've become somewhat pessimistic about a couple of key topics in the payments industry.
It's no surprise that proximity mobile payments and the proliferation of a cashless society are joined at the hip like Kim Kardashian and Kanye West. You can't talk about one without at least mentioning the other.
However, one thing that gets lost in this particular conversation is the fact cash is still a major force not only in the U.S., but in other countries worldwide. That shouldn't be ignored because as executives from different industries such as banking and retail tout the ways they're pushing us towards the future, consumers continue to show they're not going to completely give up on cash.
This seems like a clash in the making, especially as more restaurants continue to become cash-free zones. And if you read some of the comments on a recent LinkedIn post from Union Square Hospitality Group CEO Danny Meyer, consumers at the very least want the option to pay with cash.
Meyer's group owns 18 restaurants. He's also the founder of my go-to chain for a burger, Shake Shack.
Meyer wrote in the post how four of the group's restaurants are cashless, with more on the way. The reasons he gave for this are ones we've all heard before.
From the post:
- Safety: We've mitigated the very real security risks associated with having large quantities of cash on-site, so we can become a safer place for our team and our guests.
- Efficiency: We've streamlined our operations, eliminating cash-counting, and facilitating easier shift transitions (team members can jump on the register without the time-consuming security steps involved in cash-tray change-outs.)
- Speed: Without handling cash and making change, we can serve more guests in far less time, meaning you spend less time waiting in line to place your order and pay.
The pushback in the comments section shared a common theme: consumers want choice.
Meyer has faced this at Shake Shack.
In October, Shack Shake launched its first-ever cashless kiosk at a new restaurant in Astor Place in New York City. But in May, the Eater published a story about how Shake Shack walked back a plan to go cashless after customers complained of the decision at the Astor Place location that featured only the self-ordering kiosks.
"In the first rollout at Astor Place (in Manhattan), we did not accept cash at all, and there are people who have told us very clearly 'we want to pay with cash'," Shake Shack CEO Randy Garutti said about the decision during an earnings call. "So in this next phase, we're going to go ahead and have cashiers as well as kiosks."
Shake Shack patrons went so far as to complain about the decision at this particular location on Yelp. But that kind of pushback clearly doesn't scare Meyer with the restaurants in his group.
He did note in his LinkedIn post that “policies can be broken in the name of hospitality, and if someone wants to enjoy our food and drink, yet is only able to pay with cash, it is unlikely that we would turn them away.”
I would certainly hope not. But Meyer's view of cash is yet another case of how perception does not match reality of how everyday consumers transact. Consumers want choices. And if cash is still a viable option, we will use it.
I'll leave you with one piece of data that came from the U.K. this past week that illustrates cash's staying power.
While U.K. debit card use surpassed cash in 2017 as the most used payment method in region, paper money is in a healthy second place.
Around 2.2 million customers mainly used cash for their day-to-day shopping in 2017, although nine out of ten of them had a debit card they could use if they chose, and the majority used other payment methods to pay their regular bills.
The thing to pay attention to here is what U.K. Finance said about cash's standing.
"We're far from becoming a cash-free society and despite the U.K. transforming to an economy where cash is less important than it once was, it will remain a payment method that continues to be valued and preferred by many," Stephen Jones, U.K. Finance CEO, said in the press release about the study.
It's safe to say that sentiment exists in the U.S. as well.
Will Hernandez Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.