Riding on digital payments, the point-of-sale (POS) transaction value share conducted in cash is expected to fall from $11.6 trillion in 2021 to $6.0 trillion globally by 2026, a decline of nearly 50 per cent, a report showed on Tuesday.
Some governments are actively promoting a move away from cash (Thailand, India, Brazil), while others are introducing new legislation to slow down the rapid decline in cash use, concerned about its impact on certain socio-demographics like older people and the unbanked.
According to the 'Global Payments Report 2023' by Worldpay from FIS, the landscape of global financial transactions is undergoing a profound transformation as societies shift from relying on physical cash as the primary medium of exchange to embracing digital payment systems.
By 2026, cash's global POS transaction value share is likely to fall to less than 10 per cent.
"In India and Thailand, the growth of account-to-account (A2A) real-time payments is the primary driver for the cash's decline,a the findings showed.
However, the rapid growth of digital wallets is the main factor for the declining rates of money used in Saudi Arabia (Apple Pay and STC Pay) and Vietnam (MoMo, ZaloPay, and VNPAY).
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The report suggested that three key trends are driving cash's slide downwards.
First, governments in emerging economies continue to promote financial inclusion through digital payments.
"Second, the shift in consumer habits towards digital payments has solidified, primarily due to the pandemic. Third, merchants can increasingly accept mobile payments via QR codes, making it easier and cheaper," the report mentioned.
While digital payment systems offer numerous advantages in terms of convenience, efficiency, and security, physical cash continues to hold importance in society.
"Cash plays a role in financial inclusion, offers transactional flexibility, provides a sense of trust and stability, caters to personal preferences, and fulfils legal requirements," the report noted.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)