A new paper by Carin van der Cruijsen and Jelmer Reijerink (De Nederlandsche Bank, DNB) analyses the A transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More behaviour of those segments of the population who struggle to navigate the digital world.
The report concludes that cash plays an essential role for a substantial and diverse part of the population in the Netherlands. 7% of survey respondents rely exclusively on cash, and 28% say they cannot do without cash.
In 2022, 20% of Point-of-Sale (Abbreviation for “point of sale”. See Point-of-Sale terminal. More) transactions were made in cash, 49% with a contactless card, 21% with a mobile or a wearable device, and 10% used a card and PIN. Between 2012 and 2022, the volume of cash payments at the POS declined by 65%, even though there was a slight increase in 2022 due to the end of Covid-19-related restrictions.
The study shows cash is significant for people with low digital literacy, people with a specific type of disability (people who are blind or visually impaired, with limited or no hand function, or a mild intellectual disability) and people who find it challenging to make ends meet on their income. Naturally, the need for cash is extreme for people who fall into more than one of these groups. As previous research has shown, one of the reasons for people to use cash is that they struggle with digital payments.
“Even though many parties involved in the payment industry are continuously developing their payment solutions to enhance accessibility for a broader audience, there will always be people for whom the use of digital payments poses significant challenge. This is why we anticipate that the importance of cash will endure in the foreseeable future.” conclude the authors.
There are several reasons why people prefer cash over digital payments, and some of these reasons are likely to persist.
Graph 1. Netherlands: Respondents’ Reasons for Preferring Cash to Debit Cards, 2023 (shares)
The study underlines that cash still plays a crucial role in society. It is, therefore, essential that cash remains accessible and available. The results thus support policies that contribute to a well-functioning cash payment system.