One of the unexpected changes brought about by the pandemic is the pronounced way in which downgraded the use of paper money.
“We see the trend is strong,” says Eva Julin, deputy director general for secretariat at Sveriges Riksbank, the Swedish Central Bank, who is leading the country’s assessment of issuing a digital currency. “Paying in cash in Sweden can actually be difficult; our legal system gives companies the right to refuse payments”. As a result, the country’s hotels, restaurants, shops and, ironically, bank offices: they are becoming “cashless.” Usually, 64% of respondents report using digital payments for more than half of their purchases instead of physical notes, coins or credit cards in the last 12 months. Nearly one in five (20%) said they had not used a digital payment in the past year, but plan to do so for the next 12 months, indicating more growth.
The data follows from Digimentality study, sponsored by crypto.com and produced by The Economist. According to the study, the results of the global survey of more than 3,000 users of digital payments show that 10% of respondents believe that their own country is already a cashless country (defined as predominantly using digital payment instead of physical payment methods). “Trends in mobile penetration rates and technological innovation indicate that there is still there is plenty of room for these numbers to increase. In the next 12 months, almost a third (28%) of respondents believe that it is extremely likely to use digital payments for most or all of their daily cash transactions.. Another third says it is highly likely to do so. On average, only 4% say that something like this is not at all likely to happen. Isolating the results from respondents in developing economies reduces that rate to 1%, “they say from the study.
“Our survey indicates increased resistance to cashlessness in developed economies. Respondents in these countries predict that their society will never go cashless and what will happen sooner in developing countries. This latter segment also expressed more optimism that cashless systems will develop faster. Similarly, younger people (ages 18-38) are more inclined than their older peers (ages 39 and older) to think that a cashless society is possible“the study clarifies.
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Even though there are many new forms of digital payments, the survey found that respondents still report that the most widely used method is still the credit or debit card. “The second most preferred option is homebanking, followed by cash. Cryptocurrencies are in last place,” he says.
In general, respondents see businesses and companies rather than governments guiding the digitization process. Among those who say that their country is already cashless, more than half (55%) believe that companies have had the greatest influence, followed by consumers (24%). It is the minority who believe that the governments had a strong incidence (19%). Among those who say their country is still on its way to being cashless, about a third (36%) also predicts that companies will have the greatest influence; an equal number cites consumers (36%). Again, governments are the last (24%).