It is no secret that the use of money through debit and credit cards, digital wallets, electronic money and other technological means has been gaining ground over cash in recent years, a process accelerated by the coronavirus pandemic. But does this mean that cash's days are numbered? In this article, we will take a look at some striking cases that can give us an idea of what to expect in the future.
The Road to Cashless Economies
Among the countries that have made the greatest transition to a cashless economy are two Scandinavian countries. Sweden, for instance, has reduced the use of cash from 39% to 9% between 2011 and 2020. According to Swedish experts, as of 2020, less than 2% of all transactions in the country are made in cash. It's worth noting that the Swedish Central Bank, Sveriges Riksbank, is one of the first to initiate an investigation to study the issuance of an official cryptocurrency known as e-krona.
On the other hand, neighboring Norway records that between 3 and 4% of transactions are made with cash, according to Norges Bank, the Central Bank of Norway, with older generations using it more frequently. Just like Sveriges Riksbank, Norges Bank is currently working on a project to assess whether an official digital currency should be introduced in Norway.
In these cashless economies, it is common that most businesses or service providers, such as banks or public transportation, do not accept cash.
The Netherlands joins this list of the most cashless societies, although at a considerable distance from the above-mentioned Nordic countries. In 2011, cash payments accounted for 40% of total payments, while today they are less than 24%.
Close to these numbers is China, where 23% of payments are made with cash. Interestingly, cards are not very popular in the country, accounting for about 7% of payments, with QR codes being the most popular payment method. Under these circumstances, it is very difficult to pay using cash, especially in large cities.
In Spain, according to a 2020 survey conducted by the Bank of Spain, 35.9% of citizens indicated cash as their most-used means of payment, a significant decrease in less than a decade, considering that in 2014, that figure was 80%. In this Iberian country, the majority prefer the debit card (54.1%).
The Current Position of Cash
Even in post-pandemic times, cash is still very much alive and well on both the European and wider global stage. According to specialists from Bruegel, an important European think tank specializing in economics, after the pandemic, which undoubtedly accelerated the adoption of digital payments by many, 42% of payments in the Eurozone were made in cash.
According to the aforementioned survey by the Bank of Spain, despite the advance of digital payments, cash continues to circulate strongly. 99.3% of businesses in Spain - practically all - accept and use it on a daily basis, while 93% accept debit cards, 82% accept credit cards, and 50% accept payments with the help of a smartphone.
In Germany, the European Union's largest economy, people continue to consider cash a precious means of payment that they do not seem to want to get rid of in the coming years. The German central bank, Deutsche Bundesbank, in its report on payment behavior, states that 58% of respondents use cash to purchase goods and services, i.e., for the majority, banknotes and coins continue to be the most frequently used means of payment in the country.
Even in Sweden and Norway, state bodies have sought to implement measures to force stores, banks, among others, to accept cash since there is still a percentage of the population, such as the elderly or people in rural areas, who resist the change and continue to use it. Along the same lines, but in a more determined way, the People's Bank of China fines public and private organizations for refusing to accept cash.
How to Manage Your Money Under Any Circumstances with Blackcatcard
Despite the exponential growth of digital payments, cash will undoubtedly be around for many years to come. Although some developed countries in Europe, Asia, and North America are working to reduce the use of banknotes and coins, the total elimination is not yet on the horizon, though it is closer in some countries than in others.
Even developed countries, such as Germany, still have a preference for cash. In other regions such as Latin America, the Middle East, and Africa, this future seems to be much further away.
Taking into account the situation and needs of all our clients, we have developed a flexible service that allows them to access their resources and use their money in the way that suits them best.
Our customers can make online payments with the help of their IBAN account and their Blackcatcard, no matter where they are. Likewise, they can pay with their card in stores, restaurants, hotels, etc., in a fast and secure way. In fact, our customers can get cashback for the active use of their Blackcatcard on all their purchases*.
Of course, a large part of our users is in Europe. They are more inclined to digital payments, so they take full advantage of the possibilities we offer. However, the demand for cash prevails among many others. With very profitable conditions, they can withdraw from virtually any ATM in the EU up to €200 per month without commission; after which a small fee of 1% of the withdrawn amount is charged. This feature comes in handy even more so after recently launched integration with Binance Pay allowing customers to instantly top up their Blackcatcard account (linked to the payment card) using USDT converted into euros.
On the other hand, we have customers outside the EU who can also go to any ATM to make cash withdrawals with the same 1% commission.
The world is undoubtedly increasingly embracing digital payments. Our work has put us at the forefront of the changes experienced in this aspect, to develop a convenient tool for our users. Likewise, as long as even a small percentage of them still needs access to cash, as a financial solution committed to our customers, we will continue to offer them that possibility.
*The rewards are provided by FINTECH ASSETS OÜ. More details here.
FAQ:
Will cash cease to be used?
In the short term, it doesn't look like it will. Although some countries have made the most progress towards the total elimination of cash, even there, it will be a process that will take many more years.
With Blackcatcard, can I access cash or digital payments?
If you open an IBAN account with us and have a Blackcatcard, you can make both cash withdrawals and digital payments with competitive rates and unique rewards.
