When Oliver Hicks finished helping his family with yard work last summer, his dad handed him $50 in cash. Oliver didn’t want it. He asked his dad to send him the money through an app on his phone.
“He was like, ‘What do you mean? There’s $50 in cash right in front of you. Why don’t you want it right now?’” recalls Oliver, a 20-year-old sophomore at Swarthmore College in Pennsylvania.
Oliver is like many young adults and teens in that he prefers the convenience of a digital wallet to physical cash—even if it means waiting a while to receive payment. People often use mobile payment services like Venmo and Cash App to reimburse friends for office gifts or dinner. But with young people snubbing cash altogether, parents and grandparents now are being forced to join in if they want to compensate them for chores or babysitting.
“It blew me away because I’ve always felt that cash is king, but he had no interest at all,” said Oliver’s dad, Jono, a 47-year-old sales manager for a sportswear brand. “I don’t feel that old and I identify with younger people on a lot of things, but there is definitely a disconnect on this.”
Jono may have to get used to it, as more Americans move away from cash. Through March of this year, consumers used cash in just 37% of transactions under $20, compared with 46% in 2015, according to a recent study conducted by Cash App parent company Square Inc. (SQ) And many businesses now don’t accept cash.
Neither Square nor Venmo parent PayPal Holdings Inc. (PYPL) discloses demographic data on their users, but a Square spokesman said people of all ages use the app for a broad range of purposes, from parents paying babysitters to churches collecting donations. Money can be held in the apps and the apps can be linked to debit or bank accounts so that money can be moved in and out. People can make purchases through Venmo on many retailers’ websites and mobile apps. Both Venmo and Cash App offer physical cards that can be used in stores to debit purchases from users’ balances.
As of December 2018, the most recent data disclosed, Cash App had 15 million monthly active customers in the U.S. and the U.K. Venmo has 40 million active users in the U.S. Some people, like Oliver, use both.
The shift away from cash has generated debate in the Hicks household—and some older members of the family even worry about the safety and privacy ramifications of transferring money via apps.
During a recent family dinner in San Luis Obispo, Calif., Becky Hicks asked her nephew August —Oliver’s younger brother—if she could pay him cash for taking care of her dog. August, 16, asked her to Venmo him instead. Jono shook his head once again, though he wasn’t surprised.
“August has a drawer in his room filled with loose cash. If it’s not in his phone, it’s like it’s not there,” he said. August declined to comment.
Becky, 32, employs a lot of college students at the deli she owns and is used to paying out tips through Venmo. But she only began using it in her personal life about a year and a half ago out of necessity. “I tried writing a check to a babysitter and she was like, ‘Um, is it OK if you Venmo it to me?’” Becky recalls.
Oliver and August’s mom, Stephanie, has been quicker to adapt. She sends Oliver money through Cash App to pay him for tutoring his younger sister in math twice weekly over FaceTime and to reimburse him for the cost of necessities while he’s at college, such as books and sports equipment. Oliver uses Venmo with his friends.
But Susan Levin, Oliver and August’s 74-year-old grandmother, still gives her grandchildren cash for birthdays and Christmas. It’s too hard to shop for them anymore, she said, and she never knows what stores they like, so gift cards are out. She wraps cash in unique ways to make getting to it a challenge. One year she stuffed cash into wooden puzzle boxes that her grandchildren had to solve in order to open. Last Christmas she wrapped bills in balls of yarn. This Christmas she plans to stash cash in nesting dolls.
She said there’s no way she would use an app to send them money, nor would she use a money app for herself.
“I use credit cards and I feel comfortable without cash but I wouldn’t leave the house without my wallet and only take my phone along. I would feel like I’m losing control,” she said. “Every day we’re inundated with stories about phones and accounts being compromised. It’s another way for your information to be given away.” Ms. Levin also worries that as people move away from cash, they will become more heavily marketed to than they are already, with so much spending history on file.
Has she discussed these concerns with her grandchildren? “I kind of roll my eyes and stay out of it because I’m the grandma, so what do I know?” she joked.
Cash App and Venmo say they provide numerous safety features, including encryption, account monitoring and two-factor authentication.
Oliver said he’s no more worried about the risks associated with transferring money in and out of an app than he is about anything else.
“We see how dangerous social media can be with data being leaked and yet we’re all still on social media. If you want to participate in what the rest of society is participating in because it’s more convenient, those are the risks you assume,” he said. “I could also get hit in the face with a line drive when I play baseball next week, but I still play baseball.”
That argument isn’t enough to convince Oliver’s dad to join the cashless party. “I’ll be that old guy in the rocking chair going, ‘Remember that old paper money?’” Jono said.
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