• by Chuck Martin , Staff Writer, August 29, 2014

To hit its stride, maybe mobile payments will have to replace the idea of using cash more than credit or debit cards.

For small purchases, consumers largely turn to cash rather than plastic, based on a new study.

When making a purchase of less than $5, most consumers prefer to use cash, based on a study by Princeton Survey Research Associates International for Creditcards.com. Here’s the preference breakdown:

• 65% -- Cash
• 22% -- Debit card
• 11% -- Credit card

The study is based on a survey of 1,497 adults, 983 of whom had a credit card from American Express, Visa, Mastercard or Discover.

However, there are some differences based on age groupings. The older the consumer, the more the attachment to paying with cash, based on the survey.

Of those 65 years old and older, 82% prefer to use cash.

For those 50 and older, more than three quarters (77%) still prefer to pay with cash, with one in five (21%) pulling out plastic.

Viewed another way, those 49 or younger are almost as likely to pay for up to a $5 purchase with a credit or debit card (46%) as with cash (52%).

About half (51%) of consumers 18-to-29 prefer plastic to cash, the only age group to do so.

This can create a somewhat complex marketplace for mobile payment providers.

The common argument for mobile payments is that it has to be easier than taking out a credit card and swiping, a relatively high bar to start with.

To modify consumer behavior for smaller purchases may be an even higher bar, based on this study.

Reaching into a pocket or purse for cash is about a simple as you can get. There’s no swiping, no data tracking, no required paperwork and total security.

And then there’s the demographic split.

At the least, mobile payments focus could target the card-payment oriented group or the older, cash-oriented group, or both, at least in terms of smaller payments.

On the other hand, they could focus more on payments for bigger-ticket items and less on those below $5.

No matter which direction, it still has to be either easier or provide some additional value beyond cash or plastic.