Report: cash is no longer king

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To protect against fraud, U.S. banks will be issuing credit cards with small computer chips. But some experts say using a PIN to complete a transaction is more secure than a signature.

ALBANY, N.Y. (NEWS10)- Approximately 70% of the American population prefers to use a type of card for purchases. Debit cards are the most popular payment type in the U.S., followed by credit cards, the second most popular, according to a report from Finder.com.

Cash is the third most popular payment method. Electronic payment methods like PayPal, Venmo, and Apple Pay are currently the fourth most popular payment method. However, researchers say the use of cash was already in decline before the coronavirus pandemic drove Americans to make more purchases online. From 2017 to 2018 consumer use of cash fell from 30% to 26%.

Americans, regardless of age, prefer to use a debit card more than any other form of payment. Adults aged 65 and older were more likely to use a credit card but not much more than the average for the other age groups. Young adults between the age of 18-24, said they used a credit card less than 24-64-year-olds.

Credit cards are the most preferred among ages 25-44 and prepaid cards are the most favored by adults age 35-44. Electronic payment types are most popular in the 45-54 age group. The group with the largest number of preferred debit card users was the 55-64-year-olds.

The report went on to say, there are differences in preferred payment methods between genders. The most popular payment type for women is a debit card and for men, it’s a credit card, 40.96% to 30.92% respectively. Slightly more men than women favor using cash and the percentage of women and men who prefer to use an electronic payment type is about the same.

In almost all regions of the U.S. people prefer to use a debit card but the Northeast is an exception. The percentage of credit versus a debit card was 30.51 to 29.04. The greatest percentage of preferred cash users are in the south while the greatest percentage of electronic payment type users is in the west.

Researchers say the reality of a cashless society is looming closer than ever which may present a problem for the approximately 25% of American households that lack sufficient banking, according to the 2017 FDIC National Survey of Unbanked and Underbanked Households. They say it also presents a problem for the elderly, poor, and homeless.

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