People still carry cash
Austrians carry the most cash around with them
Vienna - cash does not have a good reputation. It is expensive, promotes corruption and makes tax evasion easier. Therefore, there have been attempts to limit cash lately. The EU, for example, is abolishing the 500 euro note. India has withdrawn 23 billion bills in the fight against tax evasion and corruption. Debit and credit cards are being touted as a secure means of payment and cryptocurrencies such as Bitcoin are being hyped more and more as a digital alternative.
But a look at people's spending habits paints a completely different picture. Accordingly, cash remains the undisputed number one when it comes to getting money out there. This is the conclusion of a study for which more than 18,000 people in Austria, Germany, France, the Netherlands, Australia, Canada and the USA were interviewed. The data were compiled by representatives of the national banks and published in the "International Journal of Central Banking".
"Many have predicted and believed that cash would increasingly disappear as a means of payment," the study authors note. But that is an exaggeration, as it now shows. On the contrary: According to Bloomberg, the value of the dollars and euros in circulation has doubled since 2005 to 1.48 trillion US dollars and 1.1 trillion euros, respectively. Part of this growth can be explained by the increased demand for these currencies abroad. But it also shows that both Europeans and Americans still carry bundles of cash with them.
But the habits when dealing with cash are different, the study shows. According to the motto "only cash is fancy", Germans and Austrians carry the most cash around with them at 90 and 120 euros respectively, or make most of their payments in cash - even if they are expensive products. In the other countries, people have around 30 euros on them. The Dutch prefer to pay with their ATM card. In France and America, on the other hand, paper checks are still used very frequently (see graphic).
Overall, it can be seen that consumers in all seven countries use cash more often than other means of payment. Even in the United States - the country where the study found coins and bills to be the least popular - 46 percent of all payments are made in cash.
The study authors see the niche for coins and bills primarily in small transactions, which in every country are still most often settled in cash.
The authors of the study cannot really explain why consumers are not really saying goodbye to cash. One factor is that not all retailers still accept cards - a surcharge is often added, especially for paying small amounts by card. Plus, dealing with cash is arguably a habit that people don't break easily. Older people in particular trust cash even more than various cards. It looks different with the younger ones. (bpf, December 20, 2016)
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