The Paradoxical Development of the Usage of Cash: a Global Update

The lockdowns and travel restrictions caused by the pandemic have had a great influence on retail shopping and payment habits. Besides the increase in online shopping, the growing use of contactless and mobile payments media have decreased the use of cash in transactions. Several recent payment studies confirm these developments¹.

At the same time and opposite to the transactional demand for cash, the precautionary demand has grown as is typical in times of uncertainty. This paradoxical development of the two motives to use cash has been evident already during a number of years, but the ongoing pandemic has accelerated the trend.

During the pandemic the use of cash as a store of value has reached record growth rates not seen since the financial crisis in 2008. This phenomenon has already been addressed in some articles but referring only to the development of some main currencies².