“Growth of credit, debit and mobile payments continues to outpace that of global cash spending, even though a large percentage of US consumers currently rely on cash or checks,” said Fitch. “According to The Nielson Report, 24% of US payments volume and 31% of transactions in the US were in cash in 2017. These percentages are projected to decline to 16% and 25%, respectively, by 2022 but remain meaningful.”
Fintech allows financial firms to leverage cutting edge technology to reduce costs, improve decision making and risk controls, remove middlemen and enhance customer experiences. A thematic approach includes investments that stand to benefit from structural change driven by demographic and technological changes.
“According to PayPal, 30 million Americans are financially underserved and rely heavily on cash,” notes Fitch. “Certain states, including New Jersey and New York, have either passed or are considering legislation that would ban cashless retailers on the view they discriminate against consumers without credit or bank accounts. We believe cash will remain important in US payments in the next decade but expect electronic payments to continue to diminish cash’s role over time.”
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