Paper or Plastic?

An informal survey of our staff and business associates tells us that many people go longer and longer between trips to the ATM.

Recently one staff member went cashless for the month of January. Another admitted feeling guilt when buying single cups of coffee or treats with a credit card rather than cash. Most of us have our phones handy at all times these days, but wallets seem to be going the way of checkbooks—they are buried at the bottom of purses, briefcases, the car console, or are in some misplaced jacket—and we don’t want to suffer the inconvenience of fishing them out.

If you listen to the proponents of digital wallets, both paper and plastic are going the way of the dodo bird. By far the largest electronic wallet trend is using smartphones for payments, though according to a recent study by ComScore, the use of digital wallets is still at nascent levels. Their study reports that “just 51 percent of U.S. consumers are even aware of digital payment providers other than PayPal, and a teeny-tiny percentage of people — 12 percent spanning all brands — have actually used applications such as Google Wallet, MasterCard PayPass Wallet, or Square Wallet…” (as reported in CNET News).

In our own research on who will be the winner — conducted in February of 2013 among more than 1,000 Americans — we find that half of consumers (48%) don’t know and don’t care. They prefer paper/plastic, don’t have a cell phone or don’t know.

Source: Koski Research, February 2013

While consumers will have fantastic records of purchases, so will the providers of digital wallet technologies. In fact, Google says it is not interested in transaction fees. It will make its money, according to the Credit Union Times, from “data analytics and well-directed offers to consumers.” Will this create new privacy concerns? Who will address them and how? Who will benefit? Soon will come the day when consumers can stride boldly and confidently into the canyons of commerce never, ever having to suffer the inconvenience and indignity of having to fish out their wallets.

The question is: What are you doing about it?