It’s no longer about cash vs. digital payments. It’s about providing consumers with choice. Each payment option has an important part to play, but in the 2020s no one single method will prevail or disappear.
The growth of digital payments has certainly accelerated during 2020 and that’s going to continue. Meanwhile, cash withdrawals fell significantly with lockdowns. But just as important, the levels of cash in circulation vastly increased (trends show cash in circulation tends to increase year on year). So, while the number of transactions fell, the value of each transaction grew. This is important, as many industry leaders are using the pandemic to predict the loss of cash. And there will always be a need for cash, for specific situations (like gifts) and in areas of the world that still have a cash-led society or where there are still high levels of unbanked populations.
Ultimately, it’s all about providing consumers with the luxury of choice, the ability to pay or bank wherever, whenever and however they wish. In today’s 24/7 world, with falling branch numbers, FIs can no longer restrict access to services or expect consumers to come to them. They have to be ready to meet consumers where ever they want to be.