Despite the global surge in digital payment methods, cash remains a dominant force in daily transactions across several countries. Factors such as limited banking infrastructure, distrust in financial institutions, a preference for privacy, and the prevalence of informal economies contribute to this reliance on physical currency. While digital payments offer convenience, speed, and security, cash provides universal acceptance, reliability, and a sense of control for many.
Countries Where Cash Still Reigns
Several nations continue to see cash as the primary mode of transaction. Myanmar leads the world with approximately 98% of daily transactions conducted in cash. This is largely due to limited banking infrastructure, especially outside of urban centers, and a widespread distrust of formal financial systems. Cash is also vital for privacy and essential in Myanmar's large informal economy.
Ethiopia and Gambia follow, with about 95% of daily transactions in cash. Low banking penetration and limited adoption of digital payments drive cash use in Ethiopia. Rural areas dominate the economy, where cash is the preferred transaction method because of accessibility issues and a stronger sense of trust. Gambia reflects a predominantly informal economy with limited financial inclusion and digital infrastructure challenges.
Albania, Cambodia, Laos and Lebanon each see 90% of daily transactions made using cash. In Albania, this reflects a cultural preference and limited adoption of card payments, even with growing economic development. Laos faces limited digital infrastructure and banking services outside major cities, causing rural populations to rely heavily on cash. Economic instability and a banking sector crisis in Lebanon have led to a lack of trust in financial institutions, sustaining high cash dependency. Other countries with high cash usage include Nepal, Pakistan, Iraq, Iran, Cuba, and Mongolia.
India's Unique Position
While India does not feature in the top 10 list of countries with the highest cash usage, cash is still used in approximately 70% of transactions. However, India stands out for its rapid growth in digital payments, particularly through the Unified Payments Interface (UPI). UPI enables millions to easily send and receive money via smartphones, making digital payments fast and accessible.
Despite the increasing popularity of UPI and other digital payment methods, cash remains resilient in India. A recent report estimates that cash usage in private final consumption expenditure remained around 50%. Cash continues to play a crucial role, especially in rural and semi-urban areas where digital adoption is slower. This is due to factors like trust, habit, and the lack of internet access or technical skills among some segments of the population.
The Future of Payments
Globally, the trend indicates a gradual shift towards digital payments. The rise of mobile wallets, internet banking, and contactless cards has contributed to a decrease in cash transactions. However, cash is expected to coexist with digital methods for the foreseeable future, as it offers unique advantages in certain situations.
For businesses, this means that flexibility and inclusivity are key. Accommodating both cash and digital payments ensures that all customers can transact according to their preferences. As technology continues to evolve and digital infrastructure improves, the balance between cash and digital payments may shift further. Still, cash is likely to remain an important part of the payment landscape for years to come.
