'This trend is here to stay': Analyst on stadiums going cashless

Senior Industry Analyst for Bankrate.com and CreditCards.com Ted Rossman joined Yahoo Finance Live to break down the new move to going cashless and what this means for Americans.

Video transcript

SEANA SMITH: All right, let's talk about some more earnings reports, actually, that we got. We have Visa and Mastercard, both of those earnings reports beating the Street's expectations, as we've seen this resurgence in consumers spending again. But we want to talk about one trend that's really taken off since the start of the pandemic. And that's going cashless. And for that, we want to bring in our next guest. We have Ted Rossman. He's the senior industry analyst for Bankrate.com and CreditCards.com.

And Ted, more specifically, we're especially seeing this trend in sport and sporting venues and sporting stadiums here nationwide. More and more of these venues are no longer accepting cash. They have these new ATMs that are called reverse ATMs that you can put cash in and get these debit cards. But to what extent do you think the pandemic has accelerated the shift that we're seeing?

TED ROSSMAN: I think it's majorly accelerated it. I think we've really skipped maybe five or even 10 years. Look, there's no doubt that cash usage has been declining for a while now. But in 2019, it's still made up 30% of all transactions and about half of those under $10. So to think now that 26 of the 30 Major League Baseball stadiums have banned cash, and it's also something we're seeing at NHL and NBA venues, concert venues, I really think this trend is here to stay. And it's only going to accelerate.

ADAM SHAPIRO: Ted, there's an irony that people might be afraid of germs when they're willing to eat what we call in New York City dirty water dogs. But let me ask you, do the stadiums-- do the teams actually make money by going cashless, a percentage of the transaction fee?

TED ROSSMAN: You know, a lot of this probably goes to other vendors, you know, the concession companies that manage those. You know, I suppose the team might benefit to some extent through some of the merchandise and ticket sales. I don't think that's the primary motivation here, is to take in that interchange of, let's say, 2% or 2 and 1/2% on those credit card transactions. That would be lower for debit, of course.

I think it's really intended as a public health thing. That may be a little bit misguided. The CDC and others have told us that you don't have to be as worried about surfaces like cash. We have our own research done a couple of years back with the University of Texas that found that bills and coins are actually not as germy as you would think. Phones, payment terminals, and cards actually had more germs than the bills and coins that we surveyed. But nonetheless, the perception is out there.

You could also say this is a speed and convenience play, this idea of kind of speeding through the checkout, really not unlike what we've seen at some restaurants. And even things like curbsie pickup [INAUDIBLE].

SEANA SMITH: Hey, Ted, you were also out-- Bankrate was also out with a recent study. And I bring this up because you found that only 16% of US adults that you talked to have bought tickets for an upcoming live event. And I think when we talked about all this pent-up demand, people just can't wait to leave their houses, I, at least, would have thought that that number would have been much higher. Does that mean that maybe this recovery that we've been talking about, maybe it's not as strong as we initially thought it is?

TED ROSSMAN: I think it will pick up. But you're right. I, too, was surprised that only one in six people has a ticket to a big, large scale stadium kind of event. I think there's a few things going on. One is that I think people's first move once they get vaccinated is to gather in small groups. That's what they're more comfortable with. Bar and restaurant traffic has picked up a lot. Even travel is rebounding faster than stadium events. There's also the idea of all these cabs that continue to exist, often 20%, 30%. There's usually some other hoops to jump through, like you need to show a negative test or you need to show proof of vaccination.

I think this will improve rapidly as we head deeper into the spring and especially by the summer and fall. The NFL is hoping for full stadiums in the fall. And I know that's also something that a lot of concert venues are hoping for. It will get better week by week and month by month. But I think by September-- dare I say it-- things could be relatively normal if the health conditions continue to improve.

SEANA SMITH: All right, Ted Rossman, senior industry analyst for Bankrate.com and creditcards.com, thanks so much for joining us today.