The Future of Cash in Spain
Speaking in Madrid at last month’s Future of Cash conference, the Bank of Spain’s Helena Tejero gave a positive outlook on the value of and demand for cash in coming years.
Tejero, Associate Director General of Financial Conduct and Banknotes, noted the world is changing fast—with especially high instability since 2020—and cash serves as a reassuring and steadying influence.
Uncertain times tend to bring an increase in demand for physical money as people use it to store value and want to have it available for emergency use. Also, when digital payment methods fail—for example due to power or internet outages—banknotes and coins can reliably be used to buy essentials such as food and medicine. Tejero observes that, for these reasons, it is necessary for banks to guarantee cash infrastructure and supply, and maintain a real-time picture of usage and demand to inform policies.
Forecasting the likelihood of inflation rates remaining high in the coming years, Tejero suggests demand for cash as a store of value may decrease, while transactional use of cash could increase. In Spain, physical money remains the most common payment method—with 69.8 percent of people reporting recent cash use and 64% using it on a daily basis—and the recent, strong increase in international tourists is expected to raise it further.
Access to cash in Spain is above average for the Euro area, with the nation boasting 1.4 points of access to cash per thousand inhabitants—the average being 1.1—behind only Portugal (1.7) and Austria (1.8). Measures to keep cash access secure include agreements with Correos—the Spanish national postal service—mobile branches, and cash-back availability in shops. Tejero also outlines measures being taken to improve services, such as an extension of face-to-face service at bank branches, keeping ATM repairs within a maximum of 48 hours, and offering customers financial and fraud prevention education.
In conclusion, Tejero notes cash supports an inclusive society and reinforces business continuity, and is expected to continue playing a key role in the economy, both as a means of payment and a store of value in volatile times.