Despite the influx of mobile banking and payment options, plastic card use, and a focus on financial infrastructure, cash remains heavily cemented in the Middle Eastern and African economies. Reliance on cash is particularly ingrained in the unbanked and rural populations of these regions, with consumers still reaching for cash to pay for daily transactions.
This is not to say that other payment methods are not seeing growth in adoption. These tools are particularly gaining popularity. Saudi Arabia and Turkey are seeing the number of plastic cards in circulation increase, with Turkey now one of the largest card markets in the region.
However, despite new sources of competition, cash continues to be an imperative payment method. Indeed, part of the reason cash is still so popular for consumers is because it’s familiar and reliable against other factors, such as the fluctuation of oil prices in Saudi Arabia, which is a notoriously volatile market.
Key Findings From The Latest Index
- Cash share accounted for 60 percent of South Africa’s gross domestic product (GDP), as well as 37.5 percent of Saudi Arabia’s GDP.
- Overall, the Middle East’s GDP is expected to grow 12 percent between 2016 and 2021.
- In 2016, Middle Eastern consumers made $0.9 trillion in cash payments. This is expected to rise to $1.4 trillion by 2021.
- Seventy-five percent of adults in South Africa now possess bank accounts, compared to just 60 percent of adults in Turkey.
Cash Holds Strong In Turkey As FIs Break Into The ‘Shadow Economy’
Though cash remains one of the top payment methods, in Turkey, it is competing against both the rising influence of card payments and the growing role of smartphones. That said, over 50 percent of all consumer-to-business transactions in the country are still made via cash payment, according to data from the World Bank.
In a recent interview with PYMNTS, CEO Dr. Soner Canko of payment systems firm BKM noted several of the factors that have made it easy for cash to stay strong, including its high unbanked population, accounting for 30 percent of the country’s overall GDP.
“Cash usage is also very popular for the unbanked population,” he said. “For example, people in rural areas [who] work as farmers. They always prefer [to use] cash because they’re living in a shadow economy, in a gray economy.”
For further insight into the use of cash in Turkey, and to find over 380 data points, download the Index.
About The Index
The PYMNTS Global Cash Index™, a Cardtronics collaboration, focuses on the use of cash as a payment method that equally plays a role with cards, checks, direct debit and other methods of settling up between consumers and businesses. Unlike most reported estimates of cash, this proprietary data analysis focuses on the use of cash for making payments, rather than on cash as an economic safety.