Don't write cash off just yet

By : Colin Gordon

It seems that a bandwagon among some commentators at the moment is to assume that cash is set for the history books. With some countries now passing a tipping point where more than half of transactions don't use cash, it can seem the march to a cashless society is well underway.


But such predictions fail to take into account that for the vast majority of the world, cash still reigns supreme. Indeed, this is not just limited to the emerging markets where the infrastructure for solutions such as payments cards are less widespread. Cash still has a significant role to play in many developed nations too.


Cash still the number one choice
On a global basis, some 85 percent of transactions still use cash, according to research from McKinsey and Capgemini. This compares with 9.1 percent for card payments, 4.6 percent for debits and money transfers, and just 1.2 percent for checks.


The gap is particularly pronounced in developing regions. Africa, for instance, remains a heavily cash-dependent part of the world, where 99 percent of transactions rely on physical currency. 


There was an especially notable difference between developed and developing parts of the Asia-Pacific region. In developed nations, non-cash use reached 35 percent in 2015, whereas for emerging countries, this figure was just two percent. 


A similar split was seen in Europe. While Western European nations used non-cash payment methods for more than one in three transactions (34 percent), compared with just seven percent for Eastern Europe.


Why cash still matters
Although there is a pronounced split between developed and emerging parts of the globe, even the least cash-dependent countries still have a need for old-fashioned notes and coins. According to MasterCard and McKinsey, the most advanced nations in the world for non-cash payments include Singapore (61 percent cashless transactions), the Netherlands (60 percent), France and Sweden (both 57 percent). Interestingly with Sweden though, the government and central bank have put a hold on plans to accelerate the push on cashless given the need to provide as wide a choice to all consumers as possible.


Even in developed countries, around four in ten payments still use cash, so it's clear there's still a long way to go. There are a range of reasons for this, such as the certainty that cash will be accepted everyone, which is not the case with other options - particularly new solutions such as mobile payments.


With cash, the peace of mind that comes from having physical notes and coins in a purse or wallet should also not be underestimated. The simple fact is that no matter what innovative alternatives are on offer, there will always be some people who just feel more comfortable with cash


As well as allowing them to keep much closer track of how much they spend, cash also feels more secure to people. For instance, just two percent of transactions in Greece are cashless, which may be no surprise given the country's long-running economic and financial crisis, which may mean people have little faith in currency they cannot see and feel.


There is the expectation that in the long run, some developed countries move away from cash. However with still over $450,000 USD being withdrawn from the 3 Million ATMs globally every second (that’s over $27 Million USD per second), it’s clear that there’s still many years left for the ATM and cash well in the future.



Colin Gordon

Financial Services SelfServ, Marketing Manager

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Colin Gordon is a Global ATM Marketing Manager based at NCR’s R&D Center in Dundee, Scotland. Colin is responsible for the marketing of NCR’s financial hardware portfolio with a specific focus on activities such as demand generation, sales enablement, market analysis and customer engagements for the ATM business.