Every day, billions of banknotes and coins change hands, enabling all kinds of transactions to be carried out. The role of cash as a payment instrument is well known and volumes of economic literature deal with the resilience of cash, its efficiency compared to non-cash payments and the role of cash amid alternative payment instruments. Undeniably, cash continues to play an important, often dominant role in retail payments.
However, cash has numerous other attributes beyond payments. Children solve their first algorithm problems by counting coins. In times of economic hardship, many consumers rely on cash to manage their budgets more carefully. For many countries, banknotes reflect their national heritage and values. When natural or man-made disasters strike, cash is often the fall-back solution.
The objective of this white paper is to identify the unique attributes of cash and understand how they contribute to the demand for cash. Cash faces ever-increasing competition from alternative payment instruments, ranging from debit and credit cards to credit transfers and direct debits, as well as emerging payment instruments such as electronic and mobile payments and even virtual currencies. All these instruments challenge the payment function of cash. Despite this disruptive evolution, the demand for banknotes and coins has continued to grow at a significant pace around the world.
This white paper could not have been done without the insight, expertise and guidance of: