Consumers Savvier About Using Alternatives to Cash, Ally Analysis Shows
As Digital Solutions Grow, Ally Bank Data Indicates 9 out of 10 Customer Transactions Cashless
Sep 17, 2018
SANDY, Utah, Sept. 17, 2018 -- The beginning of September signals many things – the end of summer, the start of football season and the return to less frequent ATM use based on transactions by customers at Ally Bank, the online banking subsidiary of Ally Financial Inc. (NYSE: ALLY). While visits to ATMs and overall amounts withdrawn by Ally customers during the summer are higher than the other nine months of the year, cash hasn't been king for everyday purchases for decades and is trending to become even more obsolete.
Recent analysis by CivicScience, the Federal Reserve and Forrester, plus data from Ally Bank, Member FDIC, shows consumers and its own customers are turning to debit cards, credit cards and mobile wallet more frequently than ever before. In fact, three in four Ally customers polled say they primarily use a credit card when purchasing goods and services in stores. Fewer than one in 10 Ally customers indicate their primary form of payment is cash.
According to internal data, the number of Ally customers with a checking account visiting an ATM has decreased by 4-percentage points on average since 2016. In fact, visits are down from an average of almost 2.6 times per month in August 2016 to a little more than 2.4 times a month in August 2018 and the average dollar amount withdrawn per month also declined in the same time frame.
"The age of digital banking is here," said Diane Morais, president of Consumer and Commercial Banking Products at Ally Bank. "Customers want convenience, and a credit or debit card eliminates the guesswork in how much cash might be necessary when running errands, dining out or simply day-to-day expenses like gas, parking or coffee. Consumers are getting savvier also and taking advantage of rewards and protection while using a credit or debit card."
It's all in the Cards
More than half of consumers say they use a debit card most often for purchases, according to information gathered by CivicScience. Ally's own customers indicated they use a debit or credit card for in store purchases almost every time.
A Federal Reserve Payments Study last year showed that total card payments increased 7.4 percent from 103.5 billion transactions in 2015 to 111.1 billion transactions in 2016. In fact, credit card use for in-store purchases increased 10.2 percent in that time while debit card purchases increased 6 percent.
Roughly 6 in 10 credit cards offer cash back rewards, such as the Ally CashBack Credit Card, which offers 2-percent cash back at gas stations and grocery stores plus a 10-percent deposit bonus when rewards are deposited into an eligible Ally account. Consumers who apply for an Ally CashBack Credit Card by October 31 can earn $150 bonus when they spend $500 in the first 90 days of account opening.
"One advantage of using a card for transactions is the ability to track the spending, which helps with budgeting," Morais pointed out. "In addition, there is the benefit now being offered by many card issuers of being able to immediately turn a debit card or credit card on or off. For example, the Ally Card Controls™ app allows customers to set location aware controls, transaction types, merchant types and amounts with a single touch."
Access to Money
Almost half of Ally customers surveyed recently said they rarely or never visit an ATM. A Forrester study also showed ATM use declining to just a little more than once a month in the past year.
Consumers also are growing more comfortable paying individuals directly sans cash or a check with person-to-person payment systems like Zelle®. Since October 2017, transactions through Zelle by Ally customers have increased more than 75 percent.
The Ally CashBack Credit Card is issued by TD Bank N.A. To learn more about the Ally CashBack Credit Card Program, visit www.ally.com/cashback .
About Ally Financial Inc.
Ally Financial Inc. (NYSE: ALLY) is a leading digital financial services company with assets of $171.3 billion as of June 30, 2018. As a client-centric company with passionate customer service and innovative financial solutions, Ally is relentlessly focused on "Doing it Right" and being a trusted financial partner for its consumer, commercial, and corporate customers. Ally's award-winning online bank (Ally Bank, Member FDIC and Equal Housing Lender) offers mortgage-lending services and a variety of deposit and other banking products, including CDs, online savings, money market and checking accounts, and IRA products. Ally also promotes the Ally CashBack Credit Card. Additionally, Ally offers securities brokerage and investment advisory services through Ally Invest. Ally remains one of the largest full-service auto finance operations in the country with a complementary auto-focused insurance business, which together serve more than 18,000 dealer customers and millions of auto consumers. Ally's robust corporate finance business offers capital for equity sponsors and middle-market companies.
For more information and disclosures about Ally, visit https://www.ally.com/#disclosures.
Gene King, Ally