Why is cash still king?
Cash can be defined as currency as banknotes or coins and is used to exchange goods and services or to pay off debt.
Although it has become less common for people to carry cash because of the growth of payment systems and digital payments, this does not mean that cash isn’t important. Cash is the most accessible, reliable, and accepted form of payment and is used day to day for basic transactions such as purchasing bread or paying for public transport.
Here are five reasons we think cash is still important:
Cash is inclusive
Financial inclusion remains a serious issue in South Africa, and as a country, South Africa has worked to improve the lives of poorer citizens by encouraging citizens to register with banks. However, cash payments remain the most used form of transaction in South Africa, according to The Global Payments Report, by FIS 44% of POS transactions were made with cash in 2020 with Debit card transactions coming in second with 31%.
Keeping cash in circulation allows everyone, regardless of status, age, financial standing, background, and race, to make purchases and contribute to the economy. The complete displacement of cash will only increase financial exclusion.
Cash is universal
Cash can be accepted almost anywhere, anytime, and by all economic players young and old, rich and poor.. Other alternative forms of payments, e.g., card, tap to pay, scan to pay, all rely on some form of technology. Cash is also the preferred method of payment for daily transactions in both developing and under-developed countries. Physical cash is the most widely accepted form of payment. That’s why all businesses accept cash and many businesses only accept cash.
Cash is reliable
Cash does not “crash”. Technology can fail, power outages can happen and loss of internet connectivity can affect a digital payment system. Citizens in rural and underdeveloped areas rely highly on the use of cash, where internet connectivity is often unstable and unreliable.
Cash is secure
Although there is a risk of theft and loss of cash, making purchases with cash still gives merchants the peace of mind that no fraud, tracing, or cybercrime can take place. With the constant improvement and innovation in security, it is almost impossible to counterfeit cash these days. It is more likely to have your card stolen or be involved in cyber crime/online fraud than it is to receive a counterfeit banknote.
Cash is handy
Physical cash can help you out in any situation. As mentioned before, all businesses accept cash and many only accept cash. So, whether your card declines or your smartphone doesn’t have an internet connection, you always have the option to pay with cash. Cash is also convenient for budgeting and not overspending. People often spend more money and purchase items they can’t afford when they’re not using cash.
Cash has its advantages, but with advantages also come disadvantages like theft and loss of cash. For many people, cash is the only way for them to live day-to-day. That’s why we can’t write off the importance of carrying and accepting cash.
