There is a very significant focus on the challenges faced when people choose to pay digitally rather than with cash. It seems to be a, if not the, core theme of conferences, publications and public policy wherever you go. Why? And should it be? Two papers reported in this edition suggest it should not – the high volume economies report from the Global Currency Forum (GCF) and the Currency Research Cash Resilience paper.
The first reason lies in the implications of what is happening combined with the speed of change. When changes to cash usage arrive, it often accelerates making the status quo of the cash cycle unviable. Inevitably the private sector, motivated by profit, moves faster than state institutions and cash acceptance and access infrastructure disappears steadily and swiftly.
Because cash is both a necessity for many people and has been assumed to be both a monetary anchor and the ultimate fallback option for crisis, the implications for individuals and society are important. What makes the sense of crisis even more acute, is that this is uncharted territory. Nobody knows what the answer is. No wonder this gets so much attention.
The second reason is where the effect of less cash is having the most impact, which is mostly in advanced economies. Inevitably these countries have the resources to track the changes, investigate the causes and reflect on responses. They have also been, one might argue, at the leading edge of digitalisation.
At an International Association of Currency Affairs session before the GCF programme started, the voices of central banks in Africa and elsewhere were heard stating that their biggest problems were not access to cash or cash acceptance, but how to
get effective cash infrastructure in place to support the issue, management and withdrawal of the ever growing volumes of cash in their economies. This led into a conference session where central banks from high volume economies talked about their priorities and challenges.
Currency Research has conducted a survey of 37 central banks in conjunction with the Bank of Ghana, the Central Bank of Kenya, the Bank of Namibia, and the South African Reserve Bank (see page 4). The report starkly reflects the reality that cash remains a growth product.
Across the world digital payments are making rapid progress. The impact in each region is different, but it appears that the experience of most of the world is cash and digital rather than digital without cash.
While we all need to watch and understand what is happening and to be alert to changing trends, and to learn from the less cash world, perhaps we should be rebalancing our conferences, publications and public policy to reflect what is actually happening in most parts of the world, rather than in those countries with low levels of cash to which undue attention is paid.
