A recent Statista article analyses A transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. preferences around the globe and presents the results of an international survey. Unsurprisingly, Sweden and South Korea are ranked first amongst the countries where people prefer cards over Money in physical form such as banknotes and coins.. At the bottom end of the chart, the Philippines and Germany are the only two countries where a majority of people prefer to pay in cash. The article is also posted on the World Economic Forum website.
In my opinion, the article contains several inaccuracies and biases.
But besides these inaccuracies, the article raises the interesting question of the relevance of payment preferences and highlights how they differ from country to country. But does this matter and particularly in terms of policy. If people prefer to pay with a card or with a phone, should policy aim to help or should it aim to guarantee a diversity of choice?
Some people simply cannot afford a payment preference. Approximately 31% of the world population or 1.7 billion adults remain unbanked in 2017 —without an account at a financial institution or through a mobile From the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for g... More provider, according to the World Bank. Moreover, only 52% of adults around the world reported making or receiving at least one digital payment in the past year.
Furthermore, cash serves as a contingency when systems break down. Last week in the UK, supermarket chains Morrrison’s and The Co-Op suffered payment glitches that left customers unable to pay by card and others were charged d twice. Gareth Shaw, from head of money at consumer association Which? said: “This was a concerning situation for shoppers and reinforces why cash is such a vital back-up when technology fails – even for those who prefer to use digital payments.”
One emerging trend in payments over the past decade has been gamification. With more and more payment methods to choose from, payment service providers have borrowed from the gaming industry and offer users points and rewards when they complete certain tasks and objectives. Monzo has introduced achievements which unlock badges and rewards; PayTM offers A service whereby the customer pays electronically a higher amount to a retailer than the value of the purchase for goods and/or services and receives the difference in cash. It is also a reward syste... More using a lottery-based system. This certainly makes it fun for users. Cash, on the other hand, generates what behavioural economists have called the pain to pay, i.e. the physical discomfort of parting with one’s money. The pain to pay plays an important role in helping consumers control their spending and avoid impulsive purchases.
Payment preferences matter as they influence individual consumer choices. However, cash also fulfils important social functions – including A process by which individuals and businesses can access appropriate, affordable, and timely financial products and services. These include banking, loan, equity, and insurance products. While it is r... More, resilience and financial literacy – which are often not tailored into individual choices.