Rösl & Seitz why and how cashMoney in physical form such as banknotes and coins. More must be preserved as an affordable and widely accessible payment instrumentDevice, tool, procedure or system used to make a transaction or settle a debt. More. They show that affordability is decisive for the future use of cash, as consumers choose paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More methods not only based on convenience but also on costs. These costs extend beyond visible fees. They include access (such as ATM fees availability), time costs, indirect charges (such as general bank account fees), and non-monetary aspects such as privacy. While digital payments may appear sometimes inexpensive, they often involve hidden costs, such as cybersecurity investments to protect against fraud and data breachesbut also the loss of privacy through the use of personal data. Cash avoids many of these but depends on a physical infrastructure that itself generates costs.
A central finding is that there is no universally cheapest payment methodSee Payment instrument. More. Costs vary widely across countries and depend on infrastructure, competition, and regulation. The affordability of cash is shaped by the entire cash cycle—from production and transport to ATMs and retail handling—with costs ultimately borne by consumers.
The paperSee Banknote paper. More highlights the risk of a downward spiral: reduced access to cash increases costs and lowers usage, which in turn further weakens the infrastructure. Regulatory measures such as cash payment limits may reinforce this trend by discouraging demand.
To address these challenges, the authors propose a set of policy recommendations. Central banks and governments should actively support cash infrastructure—for example by maintaining ATM networks, especially in underserved areas, and by ensuring efficient cash logisticsThe term originates from military language and refers to the movement and provisioning of troops at war. In today’s business vocabulary, it refers to the management in particular, the transportation, storage and distribution of finished goods. More. Regulatory frameworks should avoid disadvantaging cash, remove unnecessary restrictions, and promote fair competition in payment markets. Greater transparency in payment costs and improved efficiency across the cash cycleRepresents the various stages of the lifecycle of cash, from issuance by the central bank, circulation in the economy, to destruction by the central bank. More can further help contain costs. In addition, complementary solutions such as cash-back services can improve access while preserving the essential role of ATMs.
In conclusion, the future of cash depends on keeping it affordable and accessible. The paper shows that this requires not only a (cost-)efficient cash cycle but also proactive policy support to ensure that cash remains a viable option alongside digital payments.