In a world where cash is taken for granted and new digital payment methods are being heavily marketed, Loomis thought it was time to bring some perspectives to why cash is such an important part of the infrastructure around the globe.
Cash is many things to many people, and we are certainly not alone in preference for cash. According to the European Central Bank (ECB) more than 70 per cent of all payments in Europe are made with cash and in the US cash in circulation has doubled since 1996.
Here are five reasons why cash is here to stay:
The COVID-19 virus has spread around the globe and affected us all. In times of uncertainty rumours also tend to spread and become fake news. One is that cash is spreading the virus and that alternative payment methods should be used. This has been denied by many authorities including, WHO, several national health authorities, the European Central Bank (ECB) and several national banks. In fact, studies show that porous surfaces tend to hold the virus less than hard surfaces such as metal and plastic.
Social exclusion is one of the most highlighted risks of a cashless society. As an example, around 40 million people in Europe and 12 million in the US are outside the banking system. They have no opportunity to use digital payment methods. There are also plenty of other groups in society where cash is an essential payment method. Should we leave these people behind? We certainly do not think so.
Cash is a legitimate and trusted payment method and it does not cost extra to use. Neither, does cash exclude anyone. And on the contrary to what you might think, cash is increasing in society measured as cash in circulation globally.
Are we ready for our identity to be linked to every transaction we make? Who will manage and protect these online identities? Many warn against putting identities entirely in the hands of governments. Cash is private, secure and low-risk.
We are now living in times of crisis and central banks around the globe are eager to make sure that the cash availability is high. Why? Because we need redundancy in our payment system and cash is the perfect way to keep societies functioning in times of crisis.