The Future of Cash in a Digital Economy
Description
The Future of Cash in a Digital Economy
Summary
This report explores the use of cash in regions across the world, particularly as a tool for financial inclusion and during times of crisis. In an increasingly digital landscape, the report also discusses the future of cash, with several markets-having previously considered the prospect of going cashless-now looking to maintain its accessibility in order to protect consumer welfare and ensure economic resilience.
Cash usage continues to drop around the world, both as a share of total volume and total value of transactions, due to consumers switching to digital payment methods. While many governments and regulators predicted the imminent arrival of the cash-free era in the early 2020s, global events since that time have prompted these bodies to scale back the push for a fully digital payments ecosystem. Thus, cash remains a vital and valuable payment tool for large numbers of consumers across the globe, and easy access to the payment tool-as well as its acceptance-must be enforced to protect consumer welfare and ensure the resilience of the economy during times of crisis.
Scope
Summary
This report explores the use of cash in regions across the world, particularly as a tool for financial inclusion and during times of crisis. In an increasingly digital landscape, the report also discusses the future of cash, with several markets-having previously considered the prospect of going cashless-now looking to maintain its accessibility in order to protect consumer welfare and ensure economic resilience.
Cash usage continues to drop around the world, both as a share of total volume and total value of transactions, due to consumers switching to digital payment methods. While many governments and regulators predicted the imminent arrival of the cash-free era in the early 2020s, global events since that time have prompted these bodies to scale back the push for a fully digital payments ecosystem. Thus, cash remains a vital and valuable payment tool for large numbers of consumers across the globe, and easy access to the payment tool-as well as its acceptance-must be enforced to protect consumer welfare and ensure the resilience of the economy during times of crisis.
Scope
- Cash plays an important role in the economic lives of several consumer demographics, including those of lower affluence, those with low financial education, those unable to use technology, rural populations, and more. The lack of banking and payment infrastructure in developing markets means consumers continue to rely on cash in local economies, while those of lower affluence may be excluded from the system and have no alternative but to use cash as their main payment tool.
- Cash remains a highly valuable asset in times of crisis and uncertainty. Global events such as war, natural disasters, climate change, and technological outages have all affected financial infrastructure in the past and will continue to do so in the future at an increasing rate. When these digital systems fail, consumers are left in the dark, unable to pay using digital systems. As a manual, physical store of value, cash presents a compelling alternative to electronic payments in emergencies.
- Governments and regulators around the world are reining in plans to eliminate cash from the payments ecosystem, realizing the importance of the tool to many consumers.
- Develop an in-depth understanding of historical and current trends of cash usage.
- Understand the key drivers of cash usage and its strategic value for consumers.
- Gain insight into the future of cash and how stakeholders should manage its continued usage.
Table of Contents
31 Pages
- 1 Executive Summary
- 1.1 Market overview
- 1.2 Key findings
- 1.3 Actionable insights
- 2 Global Trends in Cash Usage
- 2.1 Value of transactions down but not out
- The decline of cash is predicted to slow but is far from over
- Cash trends in MEA mirror historical trends in APAC
- 2.2 Volume of transactions are beginning to plateau
- Cash remains popular for small, regular retail payments
- European markets have seen widespread uptake of digital payments technology
- Asia-Pacific governments have pushed adoption of digital wallets and super-apps for payments
- The decline continues but slows substantially due to residual consumer stickiness
- 2.3 Consumer drivers of cash usage
- Familiarity with the payment process is a main driver of cash usage
- On convenience and security
- 2.4 Cash spending by retail vertical
- Day-to-day purchases have the highest share of spending occupied by cash
- 2.5 Access to cash
- Bank branch and ATM closures limit consumers’ ability to use cash conveniently
- 2.6 High cash-use markets
- Cash remains high across select developed and developing markets
- Germany’s historical landscape keeps cash usage afloat
- Spain has suffered digital payment failures, driving cash usage
- Indonesia lacks infrastructure for widespread digital payment adoption
- Nigerian consumers show preference for a blend of digital and cash payments
- 3 Cash as a Tool for Financial Inclusion
- 3.1 Consumer segment without payment cards remains sizeable
- Payment card uptake remains uneven
- Scarce infrastructure remains a major barrier to payment access
- Regulation excludes marginalized consumers from digital payment systems
- 3.2 Cash as a budgeting tool
- 3.3 Cash as an ecommerce enabler
- Cash on delivery remains a major factor in low trust markets
- Ecommerce participation increases consumer wellness through access to wider product ranges, easier price comparison, and verified online sellers
- 4 Cash as a Tool During Times of Crisis
- 4.1 Technological troubles plague banks and cloud providers
- 4.2 Natural disasters are on the rise in number and severity
- 4.3 Geopolitical risks increase the draw of cash economies
- 5 The Future of Cash
- 5.1 Access to cash and cash acceptance regulation
- UK
- China
- Sweden
- European Union
- Australia
- 5.2 Digital systems supporting cash
- Banks and PSPs are forming strategic partnerships around cash access
- Lloyds Group and PayPoint Partnership (UK)
- Deutsche Bank and Paysafe Partnership (Germany)
- Revolut (Spain)
- 6 Conclusion and Strategic Recommendations
- 7 Appendix
- 7.1 Abbreviations, acronyms, and initialisms
- 7.2 Methodology
- Forecasting methodology
- GlobalData’s 2025 Financial Services Consumer Survey
- 7.3 Secondary sources
- 8 About GlobalData
- 9 Contact Us
- List of Figures
- Figure 1: Proportion of value of transactions occupied by cash is stabilizing outside of MEA
- Figure 2: Proportion of volume of transactions occupied by cash is still steadily declining
- Figure 3: Reasons why frequent cash users are drawn to using it to pay in store
- Figure 4: Consumers who most frequently use cash by retail vertical
- Figure 5: Number of ATMs and bank branches have dropped globally
- Figure 6: Trends of cash usage in Germany (2019–29)
- Figure 7: Most used payment tools of Nigerian consumers
- Figure 8: Proportion of consumers who use cash most frequently for in-store payments not holding a payment card
- Figure 9: Proportion of consumers who are lower mass-market consumers
- Figure 10: Consumers who have used cash on delivery when shopping online
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