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Mo money, mo cash

Fintech

Mo money, mo cash

It has become a familiar narrative: we are moving ever closer to a cashless world, as “disruptive technology” comes along that allows us to pay for goods and services with little more than a wave of our preferred card or device (or body part).

But according to a new report published by G4S, the massive 117-year-old global security firm, we're actually still moving in the other direction -- at least in most countries.

The firm surveyed 47 countries with 75 per cent of the world's population and 90 per cent of its GDP. It found that demand for cash is increasing, both in absolute terms and as a percentage of GDP:

The findings show that demand for cash continues to rise globally, despite th​​​​e increase in electronic payment options, including mobile in recent years. Cash in circulation relative to GDP has increased to 9.6 per cent across all continents, up from 8.1 per cent in 2011.

The report also highlights some of the benefits of using cash, which is probably unsurprising coming from a company whose “ Cash Solutions” business makes up more than 15 per cent of its annual turnover.

Here's Jesus Rosano, chief executive of G4S's cash division:

“People trust cash; it’s free to use and readily available for consumers, it’s confidential, it can’t be hacked and it doesn’t run out of battery power – these unique qualities continue to hold significant value to people living on all continents.

The report also ranks various payment methods:

Poor old cheques. And cryptocurrencies don't fare too well either.

Interestingly, the report says companies that do not typically accept cash payments have seen growth when they introduced a cash option:

Uber, whose biggest selling point is their electronic payment system, saw exponential growth when they introduced a cash option in Asia, Africa and South America.

Just two countries are identified that have seen significant falls in cash payments: South Korea, where cash use is just 14 per cent and where the government has a coin reduction policy in place, and Sweden, where cash use is at 20 percent.

For now, for most of us, cash is still king.

Related links:
Cash remains king in the eurozone - FT
South Korea to kill the coin in path towards ‘cashless society’
- FT
Why the death of cash may have been exaggerated - FT Alphaville
The use of cash by households in the euro area - ECB

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