Daily Management Review

BIS: Cash is not going to die


03/12/2018


Although increasingly more people use cards, mobile phones or even face recognition technology for payment, cash is still popular, Reuters reports citing the Bank for International Settlements (BIS).



coyot via flickr
coyot via flickr
Some comments "give the impression that cash in the form of traditional banknotes and coins is rapidly becoming out of fashion," says Hyun Song Shin, economic adviser and head of research at the Bank for International Settlements.

"Despite the improvement of payment technology in recent years, the use of good old cash continues to grow in the majority, although not in all developed and developing countries," the expert notes.

The volume of cash in circulation has actually increased in recent years: from 7% of GDP in 2000 to 9% in 2016, although it declined in Sweden and some other countries.

"The stability of cash as a social institution reminds us of the importance of understanding the economic functions of money, in addition to innovations in technology," Shin emphasizes.

Nevertheless, payments on debit and credit cards also increased: from 13% of GDP in 2000 to 25% in 2016. People hold more cards and use them for smaller transactions, says the BIS expert.

Earlier it was reported that Sweden is the first country where cash is practically out of circulation. The trend of not accepting cash in Sweden is increasing. Almost everyone is paying by card or mobile now, but this process is beginning to worry the local authorities. In early summer, the central bank of the country should issue a report, where the situation with the disappearance of cash and its assessment will be examined in detail.

Most of the bank branches in Sweden have already stopped working with cash, and restaurants and museums now accept only plastic cards and payments through smartphone systems. The problem is that many people still do not have access to digital technologies, and this primarily concerns the elderly population.

Last year, the volume of cash and coins in circulation in Sweden fell to a minimum since 1990. Compared to the 2007 peak, it fell by 40%, while the decline in 2016 and 2017 was the highest in the history.

The popularity of non-cash payments is also growing in Germany, according to the results of the Bundesbank study, released in February. A poll of about 2 thousand people showed that the cards are gradually gaining momentum in the country, even if cash remains the preferred form of payment.

"Cash remains the most popular way of payment, but payments on cards are growing," said Bundesbank member Carl-Ludwig Thiele, presenting the survey results.

The Bundesbank was a staunch supporter of cash against the background of a global transition to electronic forms of payment, such as debit cards, and an international discussion on the idea of digital money issued by central banks.

Last year, 47.6% of transactions in Germany were made with the help of cash in comparison with 53.2% three years earlier, the study showed.

source: reuters.com






Science & Technology

Five loudest data leaks

Airbus announces Moon exploration competition

Former Head Of Google China Thinks Funding In AI Should Be Doubled By US

Germany Introduces The First Ever Train To Run On 100% Hydrogen

Germany Plans On Cyber Security Research To End Reliance On U.S. Tech

Fuchsia will kill Android by 2023: Top 5 facts about the new OS

New Study Finds Goats Interact More With Happy People

More than 32 thousand "smart" houses under threat of hacker attack

Internet addiction and children: Global plague

Apple takes up to develop Apple Watch for health monitoring

World Politics

World & Politics

Transparency International: Europe should stop selling citizenships

Turkey: We are not going to discuss borrowing from IMF anymore

Trump in your mobile phone: US is going to test Presidential Alert system

European automakers warn of consequences of tight emission controls

IATA: EU-UK flights can be cancelled due to Brexit disagreements

Ex-Brexit Minister Said A ‘Reset’ Is Needed For Brexit Talks

10 countries with the best healthcare systems

Foreign Experts To Be Allowed By North Korea For Permanent Destruction Of Missile Sites