Cash is fading

Using cash for purchases will soon be a thing of the past as the Internet becomes increasingly pervasive and integral to society in its day-to-day tasks.

Visa's recent 11-country “Connecting with the Millennials” survey, featuring interviews with over 5 500 individuals between the ages of 18 and 28, found most (68%) are convinced a cashless society is imminent. Participants who featured in the study fall into the top half of the income distribution range.

Millennials (“Generation Y”) are the demographic cohorts following Generation X and are typically born between the early 1980s and early 2000. This is a group that grew up with the Internet - making them on the whole tech-savvy. Millennials make up 25% of the world's population.

Close on 80% of the featured demographic said it would soon be possible to conduct all shopping and pay all bills online, while 73% believe this will be possible with a mobile phone.

Paul Jung, head of Visa's e-commerce division for Asia Pacific, Central Europe, Middle East and Africa, says the ubiquity of the Internet and mobile technology are positioning electronic payments as an intrinsic part of Millennials' buying behaviour. “We see a long future for mobile phone and other device-based payments as more people, especially Millennials, adopt electronic payments around the world.”

South Africans, along with Koreans, are the top cards over cash adopters in the world, with 61% of Millennials in these countries favouring cards over cash.

According to Visa, for those with debit cards, 61% of their monthly expenses derive from debit - underpinned by the convenience and security of not carrying physical cash. “All thing being equal, debit is preferred (60%) versus cash (20%).”

Mirroring the stance that mobile is fast creeping into the world of virtual payments, professional services firm Deloitte recently said the country - and world at large - was in the midst of a payment revolution, spurred by wireless technologies like near-field communication and geo payments.

Jonathan Houston, digital marketing lead with Deloitte's consulting technology division, says advances in mobile payments represent a significant change in society. “[These developments] herald the approach of a truly cashless environment.”

SA's youth sees gadgets as a vital part of their lives, with the majority (89%) saying it would be “impossible” to live without a computer. Comparatively, 80% said they could not live without smartphones and only 50% said the same went for television.

Jung says Visa's research also found that, while local Millennials are keen technology users, they are also security-conscious. An overwhelming 90% said card security is a must to consider when venturing online.

Eight out of 10 Millennials are online shoppers, half of which shop online monthly. Millennials from Korea (76%), Taiwan (53%) and mainland China (84%) top the list of online shoppers who shop at least once a month.

Shopping less than once every six months were Filipinos (36%), South Africans (32%) and the United Arab Emirates (UAE) (44%).

Forty percent of young online shoppers say they usually use a credit card, and 37% a debit card, to make a purchase over the Internet.

South African Millennials who make payments or shop online use the virtual utility mainly for groceries, transport and rent/mortgage. The local youth use the Internet at large primarily for e-mail, research and Internet banking.

When it comes to saving cash, the inclination for South African Millennials is lower than average, with only 68% setting aside a portion of their monthly income and an even lower percentage (21%) saving a portion of their total disposable income. Shopping is the main activity they save for, followed by retirement and a home purchase.

While Millennials spend much of their time online, they also say family values are important. Ambition and dreaming big is also on the group's list, with South African, Indian and UAE Millennials regarding these values highest.

Eighty-two percent of Millennials said they enjoy “the simple things in life” and see themselves as independent thinkers.