Almost half of all consumers now prefer to make small transactions using an app. As Business Insider reports, the shift in preference was reported in a survey by U.S. Bank. It found cash has slipped in popularity to 45 percent of consumers. Digital payments are now at 47 percent.
The number of mobile transactions being made is rapidly increasing. Consumers are visiting bank stores and ATMs less frequently. People are becoming reliant on their phones, opting to keep less cash on their person and instead rely on Apple Pay, Android Pay or a similar solution.
46 percent of survey respondents said they use cash on fewer than eight days in a month. 5 percent claimed to never use cash, having entirely abandoned coins and notes for digital methods. Of those that do use cash, 76 percent keep less than $50 in their wallet. Almost half have less than $20.
READ NEXT: Millennials think automation will create “sterile” workplaces
App-based peer-to-peer (P2P) payments are also exploding. U.S. Bank said it saw a 300 percent increase in P2P payments after the launch of P2P tool Zelle inside its app. People are coming to use digital services as a complete alternative to cash, paying friends online and exchanging gifts. U.S. Bank said the response to digital payments has been “incredible.”
“The incredible consumer response to digital and mobile banking solutions is changing the entire industry and diminishing the historic use of cash,” said Gareth Gaston, executive vice president of Omnichannel at U.S. Bank. “ATM withdrawals and branch visits are slowly declining, while mobile transactions are increasing dramatically year over year.”
“It shows that the broad availability of free, easy-to-use and fast-acting technology is supplanting the need for cash,” Gaston added.
U.S. Bank found there are only small differences in the use of digital payments amongst different generations. At 49 percent of consumers, millennials are the most likely to pay online. They’re followed by Generation X, at 44 percent, and baby boomers, at 32 percent.
READ NEXT: Importance of digitally transforming credit risk management
Cash remains more popular than digital when buying certain kinds of product. People were more likely to use cash while dining, at a party, attending a family event or paying for transport. Digital payments are most popular for paying bills, sending money to close friends and attending concerts.
The findings appear to show that cash is still the most popular method for more personal transactions. Overall, digital now has the upper hand though, potentially a landslide moment for the future of cash in society.
It will remain relevant for some years to come though, particularly in rural regions and amongst older members of society. U.S. Bank’s survey targeted individuals aged between 19 and 71 who already own a smartphone.
