Cash ensures competition among payment instruments

In a new paper 'Beyond the cost debate: A multidimensional approach to quantify the value of cash for society' Julia Pitters and Franz Seitz develop e framework to quantify the societal value of cash, measuring resilience, privacy, inclusion, financial self-control, and competition. In Germany, it amounts to approximately 1.2% of German GDP, exceeding its costs.

From 1998 to 2025, global banknote demand grew consistently, surged during crises, with regional variations—Africa’s consistent high growth contrasts with more modest growth in Europe—highlighting the dual role of cash as a payment instrument and a store of value.

Public discourse on cash is fragmented by competing narratives: security vs. liberty, efficiency vs. inclusivity. As digital payments and new money forms emerge, crafting coherent messages about the evolving role of cash requires nuance, shared terminology, interdisciplinary collaboration, and public engagement to ensure its voice is heard in the modern payment ecosystems.

According to a new BIS brief, cash in circulation has stabilised globally in relation to GDP, indicating a steady demand for cash as a store of value. Cash withdrawal volumes have declined significantly, driven by supply-side factors, notably the shrinking cash infrastructure. Despite the decline in withdrawal volumes, the average value of cash withdrawals has increased.

A new study by the Deutsche Bundesbank reveals that cash and girocard remain the most cost-effective payment methods for German retailers. The study highlights how cash incurs lower per-transaction costs compared to card payments, though its cost as a percentage of turnover is higher. This comprehensive analysis underscores the enduring importance of cash in the retail sector, even as mobile and digital payments gain prominence.

Imagine a week without cards or apps—only cash. Would you spend less, think harder, or just get frustrated? A Guardian journalist did just that, revealing valuable insights about how cash shapes our spending, emotions, and financial health.

Visa and Mastercard have agreed to jointly pay $167.5m to settle a class-action lawsuit accusing them of conspiring to keep ATM access fees artificially high. The settlement, highlights antitrust concerns and the urgent need for ATM interchange fee reform to sustain ATM networks.

Gresham’s Law states that “bad money drives out good,” meaning people store more valuable money and spend less valuable money when both circulate at the same face value. It helps explain why cash persists as a store of value even as the use of cash for payments declines.

Cash remains a resilient and essential part of Canada’s monetary and payments landscape. The Bank of Canada’s 2024 Methods-of-Payment (MOP) Survey reveals that while digital alternatives like mobile payments and contactless cards are on the rise, cash usage has remained stable since 2020.

Cash is making a comeback! Recent data shows a shift from decline to plateau in cash payments. Despite digital growth, cash remains essential in our payment systems.

A new Bundesbank paper delves into the true cost of payments and shows that while cash is cost-effective per transaction, debit cards are economical relative to transaction amounts and credit cards are the most expensive. Consumers value cash highly, requiring significant compensation to go cashless. Maintaining cash infrastructure is crucial for consumer choice and economic stability.

In a recent speech, Reserve Bank of Australia (RBA) Governor Michele Bullock highlighted the significant shift in consumer payment preferences, emphasizing the challenges to the cash infrastructure. The RBA is committed to ensure cash remains a viable means of payment for as long as Australians want or need to use cash.