Cash is becoming more important worldwide
Bitcoin, e-payment, plastic money are all the rage. But they won’t replace cash anytime soon. On the contrary, the amount of cash in circulation is increasing worldwide.
ADespite the talk about digital payments, cash is still important. In fact, it might even become more important. According to a global cash study by the world’s largest security company G4S, cash payments and the currency in circulation are increasing.
The World Cash Report, which will be presented in Dublin today, covers 47 countries, covering 75 percent of the world’s population and over 90 percent of the world’s gross domestic product. According to this, the currency in circulation in relation to the gross domestic product on all continents rose to 9.6 percent from 8.1 percent in 2011. Most important is cash in South America, where the circulation amounts to 16 percent of the economic output.
In Asia, online purchases are mostly paid for in cash
How cash is paid varies widely. In Europe, for example, 79 percent of all on-site purchases are still made in cash, and 60 percent of all transactions are in cash.
In North America, on the other hand, payments are made in cash less than every third time. However, cash is still predominantly used for amounts under $ 25. The volume of withdrawals at ATMs has not decreased any further recently. Worldwide it rose by 4.6 percent in 2015, new figures are not available in sufficient quantities.
And even if online purchases are increasing rapidly in Asia, cash is not excluded: in a number of countries, more than three quarters of online purchases are paid for by cash on delivery.
“People trust in cash; it’s free to use and readily available to consumers, it’s confidential, it can’t be hacked, and neither will its batteries. These properties continue to be of great value to people on all continents, ”says Jesus Rosano, head of the Global Cash Division at G4S.
The battery of cash is never exhausted
Cash is the most cost-effective payment method for consumers and still for many companies. Companies that stopped using cash shut out a significant part of society and risked losing customers. A third of the world’s population has no access to a bank account.
The introduction of a cash payment option has even helped companies to grow, according to G4S. Uber is given as an example. The company is actually the largest port of call for electronic payments. After it became possible to pay in cash in Asia, Africa and South America, sales grew exponentially.
Another advantage of cash payments is that no third parties are involved. It is also not dependent on electronic infrastructure and cannot fail, and personal information does not have to be passed on.
Only in two countries were cash payments significantly less. In South Korea, the government has started a project to reduce the circulation of coins, and electronic payments have also increased enormously in Sweden. In both countries, the currency in circulation has fallen to 16 and 20 percent of gross domestic product, respectively.
The first secured coins were made from around 650 BC. Published by the Lydians, among others by the legendary King Croesus. Its reputation for immeasurable wealth is said to go back to the coinage. Paper money was first issued in China in the 11th century and was also used to finance the war. Since even Chinese emperors could not resist the temptation to print more notes than was good and fueled inflation, paper money was abolished around 1402.
The first European banknotes were unsuccessfully issued in 1661 by the Stockholm Banco, a predecessor of the Bank of Sweden. Previously, in 1483, it had issued so-called siege certificates during the siege by the Moors of the Spanish fortress of Alhama. It was only in the course of the 18th and especially the 19th century that banknotes became established as a means of payment.