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Cash Is (Still? Again?) King

posted by Katie Porter

Payments innovations aside, Scott Schuh gave a preview of the soon-to-be-released results of the 2009 Survey of Consumer Payment Choice. The 2008 data are already available and provide a detailed portrait of payment practices of consumers (this is an excellent new study for researchers and reporters to use.) He reported as a preliminary finding that cash use had gone up notably from 2008 to 2009. After some discussion about who uses cash (hint: very few people who attend a payments conference!), one of the large banks pointed out that two of the fastest-growing population groups in terms of size and spending in America are Hispanics and Gen-Yers. Both groups have a predilection for cash. This suggests that the pull back toward cash may be a somewhat enduring trend because it could at least partly reflect demographic changes in the population of consumers. Scott Schuh also pointed out that there had been a huge increase in the availability of cash when stores began to offer cash back, essentially putting an ATM in every point-of-sale terminal.

And, of course, the recession looms large as an explanation for people returning to cash. Whether its because their credit cards have been cancelled, or people are afraid to borrow, or people think they can control their spending and save more with cash isn't clear. But Walmart Financial Services offered some insight on just how much hurt  American families are feeling. In the last year, Walmart stores have seen a huge (sometimes triple digit percentage increase) uptick in sales starting right at midnight on the 1st of the month and continuing all that day. Why? Because people are literally waiting at Walmart for their benefits or paycheck to become available, out of food and household basics for their family.


Very true about the first of the month at Walmart. Walmart has become a one stop store for anyone receiving a government benefit. It can be anything from unemployment to a veteran's pension. Many use the store's debit card for direct deposit. Even at lower income levels, many people have iphones, etc. to let them know the minute the money hits their accounts. Then it's off to the store to buy essentials. This usually occurs in the wee hours of the morning.

I'm a night person, who occasionally ventures into the local Walmart at those times. First time I witnessed it, it seemed strange. But on reflection, it makes sense. Some have probably been watching the hours, hoping their peanut butter and jelly holds out. It's like watching a child on Christmas morning as they walk through the aisles.

Sign of the times I suppose.

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