In many developed countries, cash is used extensively for financial transactions even in the era of bitcoin, digital payments or digital money. Many countries have taken steps towards cashless economy but have not been very successful. There is a hype that cash is dying but reality is completely different. Around 50% cash is in use Worldwide for transactions. According to the World Cash Report, demand for cash continues to rise globally inspite of increase in electronic or mobile payment options.
In fact, people do have trust on cash rather than digital money. It is an important component of day to day life. People think in any political or economical turmoil, cash in hand will help to fulfill necessary needs. Moreover, cash is not dying it is still in use. Many researchers have studied various perspectives of cash utilization by people. At first instance, people feel secure when they have cash in hand. As per a research study; people who made payments by cash have had fewer debts as compare to credit card users. It seems cash users pay more attention on cost and monitor their spending carefully. According to a World Cash Report, it was mentioned that cash management for a cash user is easier due to the following reasons:
For common people and still for many businesses cash is the most cost efficient payment method.
Inclusion- All over the World people prefer to use cash, and for many people it is the only viable payment method. Some businesses lost customers as they adopted cashless transactions.
All over the World people prefer to use cash, and for many people it is the only viable payment method. Some businesses lost customers as they adopted cashless transactions.
There is no third parties involved in cash payment other than the buyer and seller.
Reliability- Cash is not reliant on electronic infrastructure, and therefore it is not subject to any outages causing non-availability of the service.
Cash is not reliant on electronic infrastructure, and therefore it is not subject to any outages causing non-availability of the service.
Physical cash is readily available and does not incur any additional charges for customers. It also allows for better budgeting as users can only spend what they have.
Cash is direct. One need not have to hand over personal information.
Hence, holding cash gives psychological peace of mind. In one of the post, San Francisco Fed president mentioned that in many countries demand for notes and coins is strong and shows no signs of slowing down. It has been noticed that people even make cash payments for online buying. In Europe 80 per cent of transactions are conducted in cash, while in North America, where card payments are most regularly used, cash usage still accounts for 31 per cent. In Asia the rise of online purchases does not mean that cash is taken out of the equation, with more than 3 out of every 4 online purchases in a number of countries paid for by cash on delivery. In Germany, many restaurants and shops don’t accept card payments. On an average, Germans carry around more than 100 Euros in cash. German people are still reluctant about using credit or debit cards. They do not want to share their personal data and believe it is insecure.
Cash still has a very prominent place in our society. Industries are continuously looking for ways to optimize the cash process, in both efficiency and reliability. Cash has unique value attributes, such as: 100% availability and reliability, anonymity, and direct settlement without the need for a technical infrastructure, explaining the continued popularity of cash even if provided with an alternative. World global report presented a key attributes of payments in the table given below (Source G4S and Payments Advisory Group analysis, 2018):
Further, cash users select the payment based on their need. Uber’ is one of the examples, when company introduced cash payment system; they received exponential growth in business. Hence cash is always was in demand, currently in demand and expected to be in demand in near future. According to one of the report, only two countries- South Korea and Sweden have shown a decline in cash payments. (Source: World Cash Report2018) . However, this phrase is truly applicable even today-
“REVENUE IS VANITY, PROFIT IS SANITY BUT CASH IS KING”.