Cash Bounces Back in Southeast Asia
Jul 20, 2022
Despite confident predictions the pandemic would accelerate a move away from cash across Southeast Asia, recent data on cash management in the region suggests cash use is bouncing back as restrictions lift.
Professional accounting service CPA Australia conducts annual surveys of small business practices across Asia-Pacific, which include cash usage information. The latest survey indicates the Philippines is the highest cash user in the region, with over 80 percent of firms saying the majority of their 2021 sales were conducted in cash. This is a sharp increase over the figure of 70 percent in 2020, when cash usage saw a dip associated with lockdowns, and equals the 2019 figure.
Indonesia also continues to be a strong cash economy, with the share of firms there receiving more than half of their payments in cash rising from 58 percent in 2020 to 60 percent in 2021. Contrary to this overall trend, Malaysia and Singapore saw a decline in cash usage, though around 40 percent of their small firms still report a majority of cash transactions.
The survey shows small and medium-sized (SME) businesses in Vietnam saw an increase in cash transactions in 2020—despite lockdowns—and a decrease in 2021 as movement became freer. It notes other Asia-Pacific regions are seeing a rise in cash usage in line with the Philippines and Indonesia, with SME businesses in nations including China, India and New Zealand seeing a rise in cash transactions.
Cash sales remain very important to many businesses across the region. Businesses were actually more likely to receive 50 percent or more of their sales in cash in 2021 than in any year since 2017.