Cash is questioned regularly in regard to its sustainability. How many of us have read reports on the death of cash and that certain country’s will be going cashless? But have we considered how this will affect communities?
European countries such as Norway, Switzerland and the UK who are leading the charge towards a less cash driven economy. Then on the other hand, countries such as Romania, Bulgaria and the Czech Republic are still highly reliant on cash.
In their recent Global Payment Trends report, Worldpay advised that the 2020 global transactions dropped by over 4% and that the pandemic had accelerated the decline of cash by three years. Whilst this number seemed to point to cash being on the decline, is it a global phenomenon?
On a global scale the Worldpay report does advise that cash still makes up over 20% of all point-of-sale transactions. It predicted that if cash continues its current trajectory, by 2024 it will fall to just under 13%. Putting this into perspective, 13% is still billions and therefore needs to still have weight as a payment choice.
YouGov recently published their global banking and finance report and of the 17 markets they surveyed, 6 of the countries showed a clear preference in using cash, most surprisingly Germany (46%) and Spain (39%).
Access to cash will continue to drive conversations. We need to narrow the field and ask about communities and what they need to survive.
From the perspective of communities, cash is still key. It allows them to thrive and there are several reasons why:
1. The elderly demographic is still cash reliant and they don’t want to travel to have access to cash.
In fact, several Euronet EFT case studies taken from the ATM in the Community initiative list this as one of the high priority reasons for having a localised ATM solution.
“We use a lot of cash in small stores like grocery stores, bars, and many neighbors are dedicated to street vending (markets). All the neighbors will be able to withdraw money or perform banking operations without the need to travel to the town of Antas where they have the nearest bank office.” Pedro Ridao, the Mayor of the Antas Town Hall advised.
2. In rural villages and towns, financial exclusion is a concern.
Having access to multiple payment options, allows the local population and visitors to contribute to the local economy, ensuring it thrives. Cash is also a necessity to the unbanked population.
“The phenomenon of the unbanked is on the rise. Euronet EFT can provide rural communities and places far from urban centres access to their cash, while supporting local businesses and helping banks to provide their clients access to their bank accounts” Vagelis Karabasis, Euronet Regional General Manager comments.
3. The elimination of cash deserts due to bank branch removal.
Throughout Europe, banks are removing more rural and remote locations, however independent ATM providers like Euronet EFT can backfill the gaps by working with local government and municipalities and installing their secure ATM solutions as an alternative.
“In our village, we were facing requests from our citizens to arrange for an ATM. Unfortunately, we were unable to find a bank that would be interested in placing an ATM with a reasonable fee. Euronet provided their ATM with reasonable conditions, and they managed to quickly deliver and install their ATM. Having ATM in our village also saves our residents time, cost of fuel or transportation which they would need to spend for travelling to withdraw cash in another village. “Kamilla Cvancarova, Mayor of Bohusovice nad Ohri
So whilst the payments industry has made huge strides in digital payments and multiple new offerings including the introduction of the digital Euro, the question still remains “is cash still needed as a payment choice?” All reports would seem to point to yes! Cash doesn’t have the same standing as it did before the pandemic, but it does have its place and we need to support cash as a means to pay.
There are calls to allow business owners to drive how their customers can pay. Surely the choice on how to pay for goods and services lies with the consumer and businesses need to listen? In a recent report from Payments Europe they suggest ‘4 out of 5 European consumers believe that the choice as to which payment method to use when making a payment should sit with them, and not be guided by the merchant‘. Do you think this is the right approach?
Read our blog for more on how Europe values cash…
