The cash payments answer: Are we asking the right question?

Abstract

Across the globe, the payments mix is changing. Debit cards are rapidly displacing the once ubiquitous cheque, and the use of cash — the most universally accepted and trusted form of payment ‐ is losing ground to credit cards, mobile payments and other emerging trends. As financial institutions prepare for the inevitability of electronic payments and the continued erosion of traditional payment methods, they may be tempted to overlook their cash processing operations in favour of these more resource-intensive and demanding trends. While some experts have already begun to eulogise cash, however, recent data show that it remains popular among both consumers and merchants. Although usage trends vary by region and country, and even by demographics, an important reality has emerged: Cash is not going away in the near future and may be increasing in use in some segments of the economy. Financial institutions cannot discount the importance of cash any more than they can disregard other payment mechanisms. In fact, cash may represent as significant an opportunity as these emerging payment trends, and it may be the traditional view of cash ‐ rather than the payment mechanism itself ‐ that is the dinosaur. This paper takes the question of cash in a new direction. Rather than simply looking at cash solely as a cost, it explores ideas, both real and conceptual, for leveraging cash as a means to drive revenue growth, expand brand loyalty and leverage the changing payment mix.