14 Aug Cash is no longer king. All hail digitisation
Cold, hard cash has been on the decline in mature first world economies since the 1990s when electronic banking started becoming popular. In recent years, countries such as India, South Korea and France have started regulating the use of cash to further reduce its usage, often with transaction thresholds or by eliminating certain note denominations.
Other countries have moved instead to restrict the use of alternatives to cash and, in some cases, have banned digital currencies such as bitcoin which is seen as a growing threat to sovereign currencies, and might disrupt traditional banking. A recent survey by ING Research across 13 European countries, America and Australia found that more than 20% of people living in Europe and America already rarely use cash and have completely adopted electronic payments.
Recently India’s government enforced demonetisation aimed at curbing tax evasion and money laundering. However in many cases it is the banking industry tha’s leading with digital alternatives to cash. FNB reported that cash withdrawals by middle-income earners from ATMs reduced for the first time in February 2017 compared to the same period in 2016. These customers are opting to use point of sale devices, other electronic transactions and cash-at-till advances where the customer just adds “cash” to their grocery list at popular retailers.