How much do we rely on cash?

A survey by the ECB finds almost four-fifths of POS transactions in the eurozone used cash in 2016.

In some parts of the world, the myth is that cash is going to be displaced as the primary payment method for consumers. As technology such as contactless cards grow, the prediction is that people may find it more convenient to turn to a card for transactions that they would previously have relied on cash for.

Does this mean the days of cash are numbered globally? In truth, it’s highly unlikely to go away completely any time soon and suggestions of a cashless society are set to remain just that, at least for the foreseeable future.

Cash use across Western Europe

A good example of the importance of cash to consumers is in Europe, where the use of cash in Western Europe at least seems to be relatively consistent. According to’s latest Global Cash Index report, the compound annual rate of increase in total cash use across 15 western European nations actually increased by 0.3 per cent between 2010 and 2015.

Some €2.1 trillion was spent in cash last year, and this figure is actually expected to rise to €2.2 trillion by 2020. However, while cash use in absolute terms may be on the rise, when viewed as a percentage of each nation’s GDP, cash’s share of the payments market is set to decline ever so slightly by 2.3 per cent between 2015 and 2020.  The likely reason for this? Choice, as consumers begin to use contactless, ApplePay and other electronic payment methods alongside cash.

Interestingly, there remains a significant amount of variation across the region when it comes to attitudes to cash. Some countries have seen much larger drops than others in cash use over the last 15 years. For example, in Switzerland, just 4.5 per cent of total spending came from cash, but this rose to almost a third of GDP (29 per cent) in Spain. Other countries where cash as a proportion of GDP remains strong include Italy (22.3 per cent), Portugal (21.6 per cent) and Germany (21.4 per cent)

The changing payments environment

In the countries where cash use has declined, greater adoption of technology such as contactless may be a key driving force. The UK Payments Council predicts this is set to become more popular in the coming years, with the average consumer using a debit, credit or charge card 30 times per month. Almost half of these transactions (14 per month) will be contactless.

But this isn’t the case everywhere. observed that even in areas where cash use is declining, it will not be replaced altogether. Instead, it compared the future of cash to that of the bicycle following the invention of the car – while people may rely on the car for longer journeys, the humble bike hasn’t gone away and is still used for both leisure and commuting. In the long-term, a similar situation may be seen for cash.

“While electronic forms of payment are definitely persuading people to use cash less, there is simply no evidence that cash is dying except in very few countries,” the report stated. “After all, there is a difference between becoming less popular and totally disappearing.”

Ultimately, other payment methods such as contactless will begin to grow, giving the consumer more choice as to how they wish to pay.  This may not actually come at the expense of cash though, what could happen is that card and digital payment methods all compete with each other and cash still remains.

The demise of cash has been talked about for many years.  However, with over $420,000 USD withdrawn in cash from ATMs globally every second (Source: Retail Banking Research Global ATM Market Forecasts to 2020) the likelihood is that “paper money” is still is going to relied upon globally as a secure, reliable and trusted payment method by consumers for many years to come.

Written by Colin Gordon

Colin Gordon

Colin Gordon is a Global ATM Marketing Manager based at NCR’s R&D Center in Dundee, Scotland. Colin is responsible for the marketing of NCR’s financial hardware portfolio with a specific focus on activities such as demand generation, sales enablement, market analysis and customer engagements for the ATM business.

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