The Economist produced some interesting statistics about how the most digitised countries use less cash and the impact of government in moving towards as cashless society. Most transactions are still carried out with cash but the use of it has fallen:
Use of cash – 2013 = 89% and 2019 = 77%
The graph shows the correlation between Internet users and the % of transactions conducted in cash. Nordic countries lead the way and by 2016 it was estimated that 4 out of 5 transactions were done online. In Denmark the extent of the cashless environment has led the payment app called MobilePay to be the top spot as the most “indispensable” app on smartphones – overtaking Facebook, Messenger etc. MobilePay was launched by Danske Bank in 2013 as a peer-to-peer transfer service.
Italy still had 85% of transactions done by cash with 61% internet penetration. Greece with its significant informal economy still has a very high percentage of cash use as it is very hard to trace.
How do countries promote less use of cash?
- Banks can improve systems that make transfers faster and cheaper
- Firms promoting the use of credit cards with loyalty schemes
- Banning the use of cash on public transport – London and Amsterdam
- Filing tax returns – payments or refunds by Internet banking
- Making goods cheaper if paying by card
Source: The Economist – August 3rd 2019