Javelin Research: Cash Is No Longer King

Jun 6, 2012

Javelin Research: Cash Is No Longer King


Javelin’s 2012-2017 Retail Point of Sale Forecast Reveals Mobile and Prepaid Cards Are the Fastest Growing Payment Options

San Francisco, CA, June 6, 2012 – Javelin Strategy & Research’s latest report - “2012-2017: Retail Point of Sale Forecast: Cash is No Longer King; Cards and Mobile Payments Likely to Rise” - identifies the key drivers influencing consumer top-of-wallet payment choices and reveals that traditional credit and debit cards have knocked cash from its pedestal as consumers’ traditionally favored payment method. Although cash is the most widely used method of payment, debit cards have the largest share of the retail point of sale (POS) market by purchase volume, followed closely by credit cards. Debit and credit cards will continue to dominate market share and will further pull dollar volume from traditional paper-based payment options; specifically, cash and paper checks. Javelin’s Retail Point of Sale Forecast report examines the current state of the retail POS market and predicts the shift in consumer use of credit cards, debit cards, cash, paper checks, prepaid cards, gift cards, and mobile phone payments through 2017 Mobile and prepaid cards are two of the fastest growing payments options.

Mobile phone payments are a new payment option that is slowly gaining traction among users. The mobile POS payments market is forecasted to surge to $1.4 billion in 2017 from $365 million in 2012. Meanwhile, prepaid card use is growing at the expense of gift cards.

“Financial institutions are investing in prepaid cards, which are becoming a more attractive option to consumers,” said Beth Robertson, CCM, Director of Payments Research at Javelin. “Unlike gift cards, prepaid card features and functionality have evolved to be comparable to traditional demand deposit accounts. Prepaid cards often include features like advanced account management, bill-pay capabilities and a linked savings account, providing consumers with more choices and greater flexibility.”

“Mobile proximity payments will remain in infancy for at least five years,” said Jim Van Dyke, President, Javelin. “But, industry-wide investments and the rising adoption of mobile phones and tablets by consumers will propel the growth of mobile POS payments. Mobile payments could be a future game changer for the retail POS market. Our report will prepare merchants, billers, financial institutions, and others to meet the challenges and leverage opportunities of the changing payments landscape.

2012-2017: Retail Point of Sale Forecast: Cash is No Longer King; Cards and Mobile Payments Likely to Rise identifyies key drivers in the retail POS market and outlines the factors that will influence consumer adoption of various payments options for in-store purchasing. This report details Javelin’s forecasts for total retail POS payments volume and analyzes share and transaction growth at the POS for credit cards, debit cards, cash, paper checks, prepaid cards, gift cards, and mobile phone payments. The report is based on an online survey of more than 3,200 consumers.

Selected Key Report Findings – 2012 Retail Point of Sale

  • The $3.8 trillion retail POS market dwarfs the online market, accounting for 94% of total U.S. retail purchase volume.
  • The improving economy will continue to drive a revival in credit card use, and - by 2017 - the retail POS share of credit cards will increase to match the market share of debit cards.
  • Prepaid card use will increase, especially among the underbanked and Gen Y.

To learn more: “2012-2017: Retail Point of Sale Forecast: Cash is No Longer King; Cards and Mobile Payments Likely to Rise."

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About Javelin Strategy & Research
Javelin Strategy & Research provides strategic insights into customer transactions, increasing sustainable profits for financial institutions, government, payments companies, merchants and other technology providers.

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