Paying with Cash: A Multi-Country Analysis of the Past and Future of the Use of Cash for Payments by Consumers

59 Pages Posted: 6 Jun 2013

See all articles by David S. Evans

David S. Evans

Global Economics Group; University College London

Karen Webster

Market Platform Dynamics

Gloria Colgan

Market Platform Dynamics

Scott Murray

Market Platform Dynamics

Date Written: June 2, 2013

Abstract

This paper focuses on the value of consumer payments made with cash, which we refer to as “total cash spending”, and the share of total spending that is made with cash, which we refer to as the “cash-spending share”. We provide estimates of these measures of cash use for 2000-2011 and forecasts of these measures of cash use for 2012-2022 for ten diverse countries: France, Germany, Italy, Poland, Portugal, Spain, Sweden, Turkey, the United Kingdom, and the United States. We summarize the results across these countries using GDP-weighted compound annual growth rates. We estimate that total real cash spending increased by 2.4 percent annually between 2000 and 2011 and forecast that this growth will decline to a 0.9 percent increase annually between 2012 and 2022. We also show that the cash-spending share increased by 1.6 percent annually between 2000 and 2011 but will likely decline by 1.5 percent annually between 2012 and 2022. We find that total cash spending will increase between 2012 and 2022, despite the decline in the cash-spending share, because total spending will increase over this period. There is great diversity in the details across countries in the historical and future evolution of cash use by consumers. However, our key finding is that, contrary to popular reports, cash is not dying. In most countries total cash spending will continue to increase, although at a slower rate than historically, and the share of spending with cash will decline but at a modest rate.

Keywords: cash, money, payment cards, payments innovation, mobile payments, payment systems, electronic payments

JEL Classification: E02, E40, E41, E42, E58, C82, D14

Suggested Citation

Evans, David S. and Webster, Karen and Colgan, Gloria and Murray, Scott, Paying with Cash: A Multi-Country Analysis of the Past and Future of the Use of Cash for Payments by Consumers (June 2, 2013). Available at SSRN: https://ssrn.com/abstract=2273192 or http://dx.doi.org/10.2139/ssrn.2273192

David S. Evans (Contact Author)

Global Economics Group ( email )

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Suite 900
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University College London ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Karen Webster

Market Platform Dynamics ( email )

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Suite 220
Bostom, MA 02108
United States

HOME PAGE: http://www.marketplatforms.com

Gloria Colgan

Market Platform Dynamics ( email )

140 S. Dearborn
Suite 1000
Chicago, IL 60603
United States

HOME PAGE: http://www.marketplatforms.com

Scott Murray

Market Platform Dynamics ( email )

140 S. Dearborn St.
Suite 400
Chicago, IL 60603
United States

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