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

Analysts: Google Search is losing clicks

Microsoft admits wiretapping users

You Can Wear Your New Air Conditioner With Your Clothes

Research: Anonymous data is not so anonymous anymore

French Optic 2000 unveils smart glasses

Tech giants face stricter government regulation in the US

Nestle's Head: Veggie meat is new megatrend

Huawei may introduce Android replacement in August

Are US high-tech investors causing brain drain in Europe?

'Russia's Google' Yandex Was Hacked By Western Intelligence For Spying: Reuters

World Politics

World & Politics

Hong Kong's richest citizen calls to stop violence and unrest in the city

UK railway operators exit Interrail system

Dozens of British Airways flights canceled or delayed due to computer malfunction

China keeps importing Iranian oil in spite of US sanctions

Marijuana legalization: Did Canada benefit from cannabis boom?

Republicans and Democrats focus on carbon pricing

Iran Hints It May Swap Seized Tankers With The UK

China launches anti-dumping investigation into U.S. propanol