Published on : 06 July 20212 min reading time
Will traditional money disappear? At a time when payments are made by digital money or cell phones, traditional money could disappear. Already, all payments are made by smartphones in some countries.
Will traditional money eventually disappear?
Cash will not disappear in ten to twenty years. All things are mortal and traditional money will eventually disappear. But when? There has been a great deal of debate on this subject within the Euro system and Banque de France.
The latter has made a big investment in the cash sector, in the manufacture, management, recycling and sorting of banknotes. The future of cash is very complex. Banque de France is the main actor in the manufacturing of banknotes. The share of cash in payments differs among consumers.
What is the share of physical money in payments?
Banknotes are still widely used in the Eurozone countries. According to a study done in 2016, 79% of in-store and retail payments are made with cash. In other countries such as Austria, Germany and Italy, cash payments account for 80%.
Banknotes are still a popular means of payment. The French still have confidence in traditional money. The rate of counterfeit money is low. On the other hand, the fraud rate is high for electronic payment methods. Banque de France guarantees the consumer a choice between electronic means of payment and traditional money, which is safe.
Will the bank card replace the currency?
At present, many people have less and less change in their pockets. In France as in Europe, people rarely use cash now. Unlike the years 2016/2017, when spending in France was often done in cash.
By 2025, the total amount of spending done in cash will decrease by 20% and the number of banknotes exchanged will decrease by over 25%. Similarly, ATMs are shrinking: 2,500 ATMs were removed between 2017 and 2019. Indeed, they are not profitable for the bank especially for less populated areas. Money is becoming scarce because the government is limiting the means of payment in cash. Indeed, payments by bank cards and their derivatives leave traces and they are eventually more easily to track.
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