One obvious feature of cash is that it can be used by all, regardless of age, gender or financial situation. In many cases, people do not have access to alternative instruments or to banking services in general. According to the World Bank1
, only 50% of the world’s population aged 15 years or older have an account at a formal financial institution. The majority of the “unbanked” live in developing countries, but even in the US 7.7% of households, amounting to 9.6 million households, had no account in a formal financial institution in 20132
. Children constitute another group with limited access to non-cash payments; according to the United Nations Population Estimates3
, 27% of the world population was under 15 years old in 2011, representing 1.8 billion children.
has established that in Nigeria, where only 30 % of the population above 15 is banked, the number of official documents required to open an account reduces the likelihood of being banked. According to UNICEF5
, worldwide 230 million people under the age of five – around one in three – have never been formally registered and therefore do not officially exist.
There are numerous other groups which have limited or no access to alternative payment systems. In some countries, women are not entitled to open a bank account. For others, non-cash payment systems are challenging to use; particularly for vulnerable people such as the illiterate, the visually impaired, and persons with mental disabilities.
Cash can also be accepted by all merchants. It does not require a bank account, registration with a payment scheme, a device such as a POS terminal, or access to a network. As a result, the vast majority of merchants worldwide accept cash, whether they are large or small, including those in remote locations without access to phone, internet or electricity.
Politics can interfere with the acceptance of other payment methods. In 2010, Visa, MasterCard and PayPal blocked payments to WikiLeaks, a not-for-profit media organisation that had published US diplomatic cables and classified information. In 2014, following the annexation of Crimea, Visa and MasterCard stopped processing transactions for several Russian banks in line with US sanctions6
Alongside the fact that it can be used by everyone, cash does not discriminate between users. Payment service providers tend to segment their markets according to income levels; the more affluent customers are offered premium solutions with an ever-increasing range of benefits and rewards. These products also become a status symbol. Mashreq Bank in the UAE has launched its exclusive Solitaire7
credit card, with a certified diamond embedded in it. Those who do not have access to premium cards may feel ostracised.
Another illustration of discrimination concerns welfare organisations that attempt to replace cash payments with alternative instruments. In 2009, The British government introduced the Azure payment card for people who have been refused asylum. The card is only accepted at designated retailers and is intended to cover food and essential toiletries only. According to a study published by the Asylum Support Partnership Team8
, “the payment card causes anxiety and distress amongst users and contributes to the stigmatisation of asylum seekers.” In particular, 56% report feelings of anxiety and shame when using the card and 38% report being ill-treated by shop staff.