Not Even A Global Pandemic Can Shift Preferences For Cash As An Option

As technology evolves, we are moving away from cash. For some, this move has been accelerated by Covid-19. But for others, change is slow: those with an affinity to cash have been less affected by recent events. Not even a global pandemic can shift some preferences for the stability and tangibility of hard-earned cash, even if they use it less than before.

Cash slowly dethroned

Once -- and not so very long ago -- cash was king. Notes and coins travelled constantly from wallet and purse to pay for just about everything. It was, literally, the law of the land.

It is still with us, of course, but cash use has been declining. ING International Surveys on financial behaviour since 2017 have noted a steady decrease in people paying for cash across many day-to-day spending categories. The latest was no exception: all eight spending options given to almost 13,000 people across 13 countries showed a reported decline in the use of cash. This was despite the European Central Bank reporting the value of banknotes and coins in circulation continually increasing in Europe between 2008 and 2017.

Consider, for example, something as basic as giving pocket money to kids. Nearly three-quarters (73%) of those who do this still give cash. But this has reduced from 86% in 2017. The rest may transfer pocket money to app-based systems or allow children to use card payments.

Public transport costs are another example of the decline of cash, with pre-paid travel cards or card- and/or app-swiping now ubiquitous. Shifts will have been driven by both choice and necessity. In the UK, Transport for London stopped accepting cash payments on busses as far back as 2014 leaving passengers with no option but to adopt a cashless approach to getting around. Travelers in Amsterdam experienced a similar shift in March 2018.

Cash remains a common way to pay for smaller amounts in person, but rapidly declines in popularity for medium and large expenses. The preference for cash when paying for smaller amounts is driven by convenience, 40% of Europeans say they choose cash because it is ‘quick to pay’. There are benefits of using cash that mean it remains a popular option for many people.

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Disclaimer: This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information ...

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