Partial ban for cashless stores & the debit cards popularity: how does the United States payment market work

Alyona Shevtsova
3 min readAug 14, 2020

Recently, I wrote about the government regulation of the fintech in Ukraine. But I wanted to return to the format of materials about uncommon payment markets of different countries across the world. This country’s market differs in its trends and priorities. It’s peculiar. From Boston to San Francisco, the cashless conversation is controversial, especially when it comes to unbanked or underbanked (those who still use financial services outside the banking system) individuals. Some cities — Philadelphia, New York, New Jersey, San Francisco — ban cashless shops and restaurants in order to protect the rights of migrants and the poor people who can’t afford non-cash payment methods. At the same time, according to the Accenture forecast, the United States will be at the top of the Platform Readiness Index by 2020. US leadership is evident in the global digital economy and financial technology, with a large number of American companies among unicorn startups.

Market terms: cash vs. cashless

Fewer Americans use cash in everyday life. According to the Square report — I highly recommend reading it — in 2019, customers paid with cash for only 37% of transactions under $ 20. As a comparison, in 2015, this rate was 46%.

Since the United States is a large country with states, district, and various island territories that differ significantly in culture, governance, pace of development, the payment habits also differ. Some states are most reliant on cash and there are up to 50% cash transactions — Wisconsin, Iowa, Delaware. And in others, on the contrary, almost 2/3 of payments are made with cards — California, Utah, Colorado.

Also the research was carried out at the end of 2018 and its report was published by the Federal Reserve Bank of San Francisco. According to the report, the survey participants were mostly using debit cards for payments (28% of transactions) during three days in October 2018. The second most used payment method was cash (26%) and in third — credit cards (accounted for 23%). Cash was mainly used by individuals under 25 years for small-value payments.

What payment methods do Americans prefer?

Consumers in the United States, as I already mentioned, often pay with cards. Basically, the market is dominated by VISA and MasterCard. American Express, PayPal and Discover cards are slightly less popular.

The following payment methods are gaining popularity in the United States:

● Mobile payments;

● One-click payments;

● E- wallets.

This is brought about by the millennials growing up, as they prefer a wide variety of alternative payment methods and hold their personal finances. Essentially, as elsewhere. However, buyers in the United States have rather diverse preferences and a high level of purchasing power, so the provision of all convenient payment methods is extremely important for merchants.

Market participants and leaders

The major US payment market participants are, of course, the largest American banks: JPMorgan Chase, Bank of America, Citigroup, Wells Fargo & Co. Such actors as JPMorgan Chase and Bank of America invest billions annually in technology development. They jointly create various fintech projects like Zelle. And if earlier banks competed with fintech, now they see prospects for growth in this sphere. Fintech companies, in turn, need banks as a payment basis for platforms.

Talking about fintech, we have worthy representatives to highlight. In addition to PayPal — there is Stripe, which develops solutions for the electronic payments processing. It works with such giants as Amazon, Booking, The Guardian, and its value accounted for $ 36 billion.


Both the United States and Ukraine and also the whole world are striving for the transition to a truly cashless society. The United States is doing well in this trend, despite the already conservative habit of paying with a bank card rather than a smartphone. The country’s payment market contains a great variety of services, and the people are gradually getting used to their daily use. Not surprisingly, Covid — 19 became a significant accelerator of this process. A recent analysis by Square notes that from March 1 to April 23 (54 days) the number of cashless businesses had skyrocketed from 8% to 31%. At the same time, the population is actively taking to new payment options.



Alyona Shevtsova

CEO of the international payment system LEO, the shareholder of IBOX Bank