Opinion | Show us the money – why less attention should be paid to rumours of cash’s demise
Endless references to the rise of electronic payment systems ignore the fact that hard currency is widely used around the world for many different reasons
It would be easy to assume that the headlong rush towards electronic payment systems might signal the death of cash. However, the case for cash has an equally compelling narrative.
From its introduction in 700BC, cash has proven itself the great survivor, and remains the most popular payment system across the globe. More cash is in circulation now than ever before. Rumours of its demise, therefore, should be treated with some caution.
There is a view that societies that have not yet climbed on the digital bandwagon are somehow lagging behind, when they may simply be responding to the needs, values and choices of consumers at a comfortable pace. The references to electronic payment systems inexorably replacing cash are inconsistent with reality.
Sweden, the Netherlands and China, where e-payment systems are dominant, are outliers. Although migration to electronic payments may be gathering pace, there is data that suggests it is not at the expense of cash. Rather, payment systems are finding their own levels, meeting different needs, and there is room for all.
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The degree to which electronic systems gain traction depends on the different social and cultural imperatives in different communities. For many, cash is used as a convenience for small purchases, as a budgeting tool, and as a way to control the individual’s financial information.