Feb 28, 2023
The State of Cash in 2023
This year, the world of banking and finance is evolving rapidly. The rise of digital payments and the pandemic-induced push towards contactless transactions have accelerated the decline of cash usage in many parts of the world. However, despite this trend, cash and ATMs still have a significant role to play in the global economy.
The use of cash has been declining for many years, and this trend has accelerated during the pandemic as people turned to contactless payments for safety reasons.
According to a report by the World Bank, the share of cash transactions in advanced economies fell from 55% in 2016 to 43% in 2020, while in emerging economies, it dropped from 93% to 87% over the same period. These numbers suggest that while cash is still widely used, its dominance is waning.
However, cash still plays an essential role in many economies. In many countries, a significant portion of the population does not have access to banking services, and cash is the only way they can make transactions.
Additionally, cash is still the preferred method of payment for many people, particularly for small transactions. In some countries, cash is even used as a store of value, with people hoarding it as a hedge against inflation or economic uncertainty.
Now let's turn our attention to the state of ATMs in 2023. The rise of digital payments has led some to predict the demise of ATMs, but they remain an essential part of the banking landscape. According to a report by RBR, the global number of ATMs grew by 1% in 2022 to reach 3.3 million, with most of the growth coming from emerging markets.
One of the main reasons ATMs continue to be important is that they provide access to cash for people who don't have access to traditional banking services. They also offer a convenient way for people to make cash deposits, check their account balances, and withdraw cash outside of banking hours.
Additionally, some banks are investing in new technologies that make ATMs more useful, such as allowing customers to make digital payments or access other banking services via the ATM.
While the use of cash is declining and digital payments are on the rise, cash and ATMs still have an important role to play in the global economy. While we may see a continued decline in the use of cash in the years to come, it's unlikely that it will disappear entirely, at least not in the foreseeable future.
Similarly, while the role of ATMs may evolve, they will continue to be an essential part of the banking landscape, providing access to financial services for many people around the world.