Why Europe Still Needs Cash
With the digital revolution generating ever-faster and more convenient means for settling transactions, old-fashioned paper money and coins would seem to have no future. But the three main reasons for abolishing them do not withstand scrutiny.
FRANKFURT – Payment systems in Europe are facing upheaval. With the digital revolution offering ever-faster and more convenient means for settling transactions, cash seems to some to have no future. But to write off the role of banknotes and coins in the economy would be a mistake.
Non-cash payment options have been proliferating in recent years. Credit cards, online transfers, and direct-debit payments are already well established. Now, smartphone-enabled digital-payment solutions and mobile wallets are also gaining ground. The emergence of potentially disruptive innovations like distributed ledger technologies indicate that further and possibly fundamental change may be on the horizon.
Independent of these new and incipient options, there are a number of studies making the case to abolish cash. Advocates of a cashless society tend to fall into three distinct camps.