In India, the average adult uses $27 of ATM cash each week

calendar iconMar 23, 2023

Source

Measurement and Use of Cash by Half the World’s Population, prepared by Tanai Khiaonarong and David Humphrey, compares the value of cash withdrawn from ATMs with currency in circulation across 14 countries to measure cash use as a share of overall payments.

While cash usage has declined in some areas, it remains the dominant form of payment in many parts of the world. The paper reports that between 2005 and 2020, an increase in cash share was seen in America, the Euro Area, India, Mexico and Malaysia, with the change being small in the first two and larger in the remaining three. Decreases were observed in the other countries.

The authors remark on the use of cash in emergency situations, which must be considered when setting economic policies. During natural disasters or other crises, cash is a vital means of payment for goods and services when digital payment systems are disrupted or inaccessible. Cash also allows individuals control over their own financial resources—rather than being dependent on banks or other financial institutions—and provides a level of privacy and anonymity that digital payment methods cannot offer.

The paper further highlights the particular importance of cash for small businesses and low-income households, as they often lack good access to banking and payment services. Cash empowers them to participate in the economy, make payments and manage their finances.

Overall, cash is an important payment option, offering unique benefits to people worldwide. While digital payment methods are becoming increasingly prevalent, cash is key to full and equal economic access, offering unmatched privacy and anonymity, supporting local economies in times of emergency, and playing an important role in facilitating transactions in the informal sector.

Last Updated: Mar 28, 2023