Can cash co-exist with digital payment platforms?
Cash is becoming almost non-existent in the North European countries; it is hard even to get rid of cash when you receive banknotes for anniversaries or other commemorations. There are fewer bank branches and the ones left often do not accept cash.
Recently the standard ATMs have been replaced with recycles, making it possible to deposit banknotes. Coins however are still a pain to deposit. The introduction of mobile money transactions has especially shown to be popular among the young generations. Many young people transfer money to each other after sharing a pizza and rarely see any cash. Most young people do not even know the face of the bank notes available. In many European countries, contactless payments have risen so much that around 50% of card transactions now are contactless according to Visa.
So is cash going away?
Besides the North European countries, the other European countries still use cash a lot. In Germany, many places such as restaurants still do not even accept card payments. According to World Cash Report 2018, for 18 countries (75%), cash represents more than 50% of all payment transactions. Cash has unique valued attributes, such as 100% availability and reliability, anonymity, and direct settlement without the need for technical infrastructure, explaining the continued popularity of cash even if provided with an alternative.
Federal reserve says that cash was used in 30% of all US transactions in 2017 meaning that people in North America still prefer cash over other payment methods. Cash is found to be fundamental for financial inclusion, as it allows everyone, including the more than 2 billion global citizens without access to a bank account, to participate in our day-to-day society. As cash still is so popular, it is not going to become obsolete any time soon; people simply like the use of cash too much for that to happen.
The electronic payment schemes allow banks as well as the establishment to monitor how you spend your money. If you pay in cash this is much harder. Cash will have its place in the future and can easily co-exist with contactless and digital payment schemes.