Is Cash Dying? Not So Fast

Often when cash is covered, its gradual decline is written off as an obituary.

A recent ING study, for instance, concluded that consumers in Europe, the U.S. and Australia are fast moving away from cash toward alternate forms of payment. The study came to its conclusion on the basis of survey responses collected from 14,692 respondents based in 15 countries.

About 27 percent in Australia, 21 percent in Europe and 34 percent in the U.S. said they rarely carried cash, according to the study.

So is cash really declining? A look at total use of cash tells a different story.

Across Western Europe, total cash spending as a share of GDP has vast disparity, ranging from 29 percent in Spain to 4.5 percent in Switzerland, according to the PYMNTS Global Cash Index. While in Western European countries cash as a share of spending is going down, total cash use is going up as a result of economic growth in most countries.

Eastern European countries, on the other hand, have a higher propensity for cash. As of 2015, cash share was highest in Lithuania at 86.5 percent and lowest in Estonia at 19.2 percent. Among the 14 countries analyzed in the Index’s Eastern Europe Analysis, while certain countries have seen a decline in cash share, others have instead seen an increase in use of cash.

Meanwhile, in the U.S., usage of cash is decreasing, but it continues to be the most used payment method. About 40 percent of consumer transactions in the U.S. are paid using cash, a recent Federal Reserve study found.

A common denominator that is changing cash share in Western economies is the proliferation of digital and card-based payments. However, the gradual decline doesn’t necessarily mean that cash is disappearing as a payment method.

Overall, consumers are spending more money every year, populations are getting bigger and economies are growing — albeit slowly. And so, in turn, more cash is actually being spent.



New forms of alternative credit and point-of-sale (POS) lending options like ‘buy now, pay later’ (BNPL) leverage the growing influence of payments choice on customer loyalty. Nearly 60 percent of consumers say such digital options now influence where and how they shop—especially touchless payments and robust, well-crafted ecommerce checkouts—so, merchants have a clear mandate: understand what has changed and adjust accordingly. Join PYMNTS CEO Karen Webster together with PayPal’s Greg Lisiewski, BigCommerce’s Mark Rosales, and Adore Me’s Camille Kress as they spotlight key findings from the new PYMNTS-PayPal study, “How We Shop” and map out faster, better pathways to a stronger recovery.

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