We all know 2020 saw cash use plummet across the globe – how often did you withdraw money at the ATM or even open your wallet?! But, as we hope the worst is behind us and the world begins to open up once more, cash use is bouncing back.
The UK was one of the hardest hit when it came to lengthy lockdowns. LINK, the UK's largest cash machine network, reported that ATM visits fell by about 43% during the first 12 months of COVID. Withdrawals fell by £37bn. And, when lockdown commenced March 2020, ATM visits fell by as much as 80% in some areas.
But there’s been a resurgence. LINK alone is seeing £1bn withdrawn from its ATMs each week.
Put simply, cash remains a vital part of the global economy. There’s an undoubtable rise in digital transactions – due to the growth of online shopping, P2P payments, and contactless payments. But, there are large swathes of society that don’t have the ability to make digital payments. This makes cash an important payment necessity that transcends the digital divide and supports financial inclusion. While the digital divide in Europe has been substantially reduced over recent years, the European Union (EU) has set out a policy providing a clear pathway to “a digital decade”. This framework sets up four key actions to achieve a sort-of digital freedom for EU countries by 2030.
So, where do financial institutions fit in to this? Well, while many countries in Europe such as, Estonia, Finland, the Netherlands, Norway and Sweden, and the United Kingdom have a reported online banking penetration of over 80 percent in 2020, according to Statista, there are still many countries with either low uptake in online use or an inability to provide the same infrastructure. Statista reported that many countries such as, but not limited to: Croatia, Greece, Poland, Portugal, and Turkey had an online banking penetration of under 50 percent, with Bulgaria, Montenegro, and Romania all reporting less than 20 percent. This means that while the EU paves the way towards a digital-first society, it’s important to recognize that we cannot sustain a digital-only approach and that some customers still rely on physical channels as means of living.
Related: Connecting the world with cash: Trends in India and Southeast Asia