The dash from cash
Rich countries are racing to dematerialise payments. They need to do more to prepare for the side-effects
For the past 3,000 years, when people thought of money they thought of cash. From buying food to settling bar tabs, day-today dealings involved creased paper or clinking bits of metal. Over the past decade, however, digital payments have taken off— tapping your plastic on a terminal or swiping a smartphone has become normal. Now this revolution is about to turn cash into an endangered species in some rich economies. That will make the economy more efficient—but it also poses new problems that could hold the transition hostage.
Countries are eliminating cash at varying speeds. But the direction of travel is clear, and in some cases the journey is nearly complete. In Sweden the number of retail cash transactions per person has fallen by 80% in the past ten years. Cash accounts for just 6% of purchases by value in Norway. Britain is probably four or six years behind the Nordic countries. America is perhaps a decade behind. Outside the rich world, cash is still king. But even there its dominance is being eroded. In China digital payments rose from 4% of all payments in 2012 to 34% in 2017.