If you follow True Merchant’s blog, you’ll remember the post we published in June about the perks of credit card payments versus cash. From convenience for consumers to increased sales for businesses, it’s clear that plastic has made a name for itself. So you can imagine how interesting it was for us to find out just how prominent plastic has become. A recent article and infographic from Small Business Trends gave some staggering stats on the differences between cash and card payments. Just how popular is plastic? Let’s take a look.
Declining Cash Use
There’s no denying the gratification we receive from having a crisp bill in our pockets from time to time. However, it doesn’t happen quite as frequently anymore. Why? Because there is usually a credit or debit card in its place. As recently as 2011, cash payments made up only 27 percent of business transactions, with other methods filling the gaps. Cash is very likely on its way to joining shrinking payment types like checks (which, by the way, only accounted for a mere 7 percent of purchases in the same time period). In fact, cash may just fall as low as 23 percent in the next 4 years, if projections by The Huffington Post are any indication.
Plastic’s Power Surge
Cards, cards and more cards. I.D. cards, membership cards…credit and debit cards. The latter two of these have become staples in the wallets of so many in America. Millennials between ages 18-34 prefer swiping at a credit card payment terminal, so much so that 69 percent of them will only shop at places that accept plastic; meaning that the cash-only deli down the street from the office is out of the question. Small businesses especially have gradually noticed this, not only in total sales but by the simple fact that shoppers at over half of such establishments ask, “Do you accept cards?” on almost a daily basis. And remember those cash statistics from 2011? Well, in that same period, plastic already had a big edge, making up 60 percent (29 credit and 31 debit) of sales. That number is only increasing, expected to hit 33 percent by 2017.
Merchants and consumers all know what sorts of benefits they enjoy from the use of credit and debit cards (convenience, impulse buying, etc., etc.), all of which have contributed to the surge in popularity of plastic payments. But guess what? Card payments have actually been a huge boon to the larger economy as well. Try to wrap your head around this: $127 billion was spent via plastic alone in 4 years’ time, from 2008-2012. That’s a lot of moola, and we’re expected to tack on $42 billion more through online shopping by the end of this year.
Still wondering if card payments are really that big of a deal? They are. Plastic is a tremendous driving force for the success of brick-and-mortar merchants and their e-commerce counterparts. Want to get your business set up for more shoppers with a credit card payment terminal? Contact True Merchant today about our credit and debit card processing solutions. From traditional terminals to payment gateways and portable readers, we’ve got you covered.