2021 Cash Matters Retrospective Part 1

As 2021 draws to a close, let’s take a look back at some of the biggest stories in the payments landscape this year.

January: Central Bank Debunks Myth of Illicit Cash Hoards

Results from a study conducted by the Bundesbank—Germany’s central bank—showed people hold cash as a store of value, out of concerns around the security of technical systems, and because it’s widely-accepted and easy to use. The study concluded: ‘the hypothesis that the German public keeps cash reserves primarily for legitimate purposes cannot be rejected’.

Also in January, it was reported that annual losses from cybercrime had reached $1 trillion and Malta, Spain and Cyprus were Europe’s most cash-loving countries.

February: Contactless Payments Have Little Impact on Cash Usage

Does a rise in contactless payments equal a decline in cash transactions? The Bank of Canada reported this month that the short answer is no, with geography and proximity of bank branches and ATMs affecting cash use more than contactless options.

Also in February, we reported the People’s Bank of China had fined organisations for refusing to accept cash, and households across America were holding more cash.

March: Cashless Payments Drive Unhealthy Purchases

A U.S. study found cashless payments increase purchases of unhealthy foods, explaining this by exploring the difference in people’s physical responses to paying cash versus cashless. Using cash elicited a stronger sense of financial loss that made people more aware of the risk inherent in their purchasing decisions, how much they can afford and whether what they are buying is healthy.

Also in March, Woolworths Australia abandoned its controversial cashless-only stores and Transport for London dropped its plans for cashless train stations.

April: Why the World is Turning to Cash

With an ever-increasing range of digital payments available, it may come as a surprise that demand for physical money was higher than ever in countries across the world in 2021. We explored how the comfort and security offered by cash are as tangible as ever, and—in a digital world—the privacy of cash transactions is a unique commodity.

Also in April, a payment innovation is allowing French customers to pay cash for online purchases, and cash reigned over other payment options in Mexico.

May: Criminals Favour Cashless

Research showed cashless payments are increasingly driving illegal activities, with the modern criminal preferring socially distanced bank transfers, online fraud and illicit sales via social media. The report concluded that as the world changes, so too does crime, and ‘criminals of all levels are migrating their activities online.’

Also in May, the World Economic Forum examined the role of cash in creating a more equal East Asia, and the Swedish Civil Contingencies Agency warned a totally cashless society would be extremely vulnerable.

June: The World’s Most Cash-Reliant Countries

A global study revealed Romania was the world’s most cash-reliant country, with 78 percent of its transactions using banknotes and coins. It also found Peru has the highest relative number of cash machines per thousand people, and Japan remains a cash-loving nation, with 59 percent of in-person payments using cash compared to 30 percent using credit cards and three percent debit card.

Also in June, the Bank of England celebrated Pride Month with the launch of a new £50 note celebrating Alan Turing: father of modern computing and gay icon, and research found using credit cards makes people crave further spending.