Cash is a contingency and fall-back solution

The latest Federal Reserve Diary of Consumer Payment Choice shows that in 2020, consumers made less payments and in particular less in-person payments. Consumers of all age groups and income groups have significantly increased their precautionary holdings of cash.

Deutsche Bank Research forecasts that not only will cash be around for a long time but the digitalisation of payments has the potential to rebalance global economic power.

A new ECB report concludes that the exceptional demand for banknotes during the pandemic is driven by an increase in precautionary holdings in times of uncertainty as well as by international demand, a phenomenon known as the cash paradox.

Political exploitation, discrimination, financial exclusion and post-disaster resilience were some of the key concerns explored in a thought leadership webinar held on 18th March to discuss the implications for society of shifting to a cashless economy.

Sweden, once the poster child of a society without cash, is increasing the number of cash centres and ATMs to ensure access to cash for all.

We have succumbed to the inevitability of digitalisation and the associated monetisation of money, the cynical conversion of the public good called cash into its privatised digital equivalent. In the process, we are losing the social utility of cash.

Cash demonstrated its resilience in the aftermath of snowstorm Uri in Texas, amid widespread power outages, electronic payments failure, and the shutdown of financial infrastructure.

Payment preference is a luxury that half the world’s population can’t afford. For those who can, preferences often reflect individual benefits rather than social good.

A new study by De Nederlandsche Bank (DNB) concludes that cash plays an essential role in society. The cash infrastructure is under pressure and this threatens the access to and acceptance of cash as a means of payment. DNB has therefore commissioned an external study on the future sustainability of the cash infrastructure.

The European Payments Council (EPC) Cash Efficiency Working Group (CEWG) has published some observations on trends and drivers for cash usage and related challenges for the cash cycle. The CEWG is responsible for formulating proposals for increasing the efficiency of cash handling and making recommendations for best practices to be shared within the entire SEPA community.

The ECB SPACE study investigates the Payment Attitudes of Consumers in the Euro Area in 2019. It concludes that 73% of Point-of-Sale and Person-to person payments were made using cash. In value terms, cash accounted for 48% of all transactions.

The review analyses the acceleration of the ‘cash paradox’ during the pandemic: declining cash transactions and increasing precautionary demand for banknotes. It also publishes the findings of laboratory testing on the risks of transmission of Covid-19 via banknotes.