NEW DELHI: A survey released on Tuesday predicted that the amount of point-of-sale (POS) transactions made in cash will decrease by about 50%, from $11.6 trillion in 2021 to $6.0 trillion globally by 2026, thanks to digital payments.
Thailand, India, and Brazil are among the governments actively supporting a shift away from cash, while other governments are drafting new legislation to slow down the rapid fall in cash use out of concern for its effects on particular socio-demographic groups including the elderly and the unbanked.
According to the "Global Payments Report 2023" by Worldpay from FIS, as societies transition from using physical currency as the primary medium of exchange to embracing digital payment systems, the landscape of global financial transactions is undergoing a fundamental metamorphosis. Cash's global POS transaction value share is anticipated to decline to less than 10% by 2026.
The report revealed that the expansion of account-to-account (A2A) real-time payments is the main cause of the fall of cash in India and Thailand. The main cause of the dropping rates of cash use in Vietnam (MoMo, ZaloPay, and VNPAY) and Saudi Arabia (Apple Pay and STC Pay) is, however, the explosive expansion of digital wallets. According to the report, three major variables are responsible for the decline in cash.
First, through digital payments, governments in emerging economies continue to encourage financial inclusion. "Second, primarily as a result of the pandemic, the movement in consumer behaviour towards digital payments has consolidated. Third, the research said that businesses may now more easily and affordably take mobile payments through QR codes.
Although there are many benefits to using digital payment methods in terms of convenience, effectiveness, and security, physical money still has a significant place in society. "Cash plays a role in financial inclusion, offers transactional flexibility, provides a sense of trust and stability, caters to personal preferences, and fulfils legal requirements," the report said.
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