Wednesday, October 09, 2019View Showroom
The pace and nature of the transition differs across the world:
While cashless transactions are increasing each year, cash is still king in all markets. Even in Europe, where online financial services are well-established, cost-effective and easy to use, household cash payments totalled €1.7t in 2016, compared with €1.1t for cards.
Some consumers are attached to cash for cultural reasons. For example, the US is a nation of great technological innovation, yet Americans still pay with cash about one-third of the time and use checks about as often as they do digital payments.
For others, the prospect of going cashless would not just be undesirable, but have harmful consequences. When India withdrew certain bank notes from the financial system overnight, the population found that 86% of its cash was no longer legal tender. Several years later, and despite a strong government push to end cash and a plethora of new digital payment providers, 72% of consumer transactions in India are still settled with cash. Many merchants, particularly in rural areas, just aren’t willing or able to pay charges for what are often low-value transactions. Network connectivity is also a problem.
Even in Sweden, famed as the most cashless country, the rapid phasing out of notes and coins from circulation has led to political debate about how some members of society, particularly rural, older or disabled populations, may be left behind.