The use of cash throughout the world will continue to be on the increase in the foreseeable future, despite the rapid growth of digital payments, the Founder and Chairman, Integrated Cash Management Services Limited(ICMS), Mr. Charles Nwodo Jr., has said. He made the prediction during a chat with journalists in Lagos recently. He said: “We belong to an international association which sponsors research into various segments of the payments space, including cash in circulation in various countries and across the world.
In the last few years, the statistics show that in the European Common Market Area and Asia particularly, the cash in circulation has been growing steadily and in places like Africa the growth is even more on a year to year basis. And this is in spite of the rise in digital and card payments. So, people were surprised because simultaneously, e-Payment was rising, cheque payment was declining and internet payment was also rising.” According to him, an explanation for the continuous popularity of cash as a medium of exchange is that there is a correlation between crisis/tension and an increase in cash volumes.
“People tend to seek to hold cash in times of uncertainty and crisis and as the world continues to witness one crisis after another in different continents, it is no wonder that the volume of cash in circulation has continued to rise. Most Central Banks across the world know this and understand the trend very well. So till tomorrow, cash is still the greatest store of value. If gold was available to carry safely in small pieces, may-be it would be competing with cash. Now with the Covid-19 pandemic, one expects this trend to endure into the long term,” he said.
He noted that although the Central Bank of Nigeria (CBN) had taken “laudable steps” to reduce the use of cash, the apex bank’s reports on cash in circulation, show that it remains high. He explained: “That is because at the end of every transaction chain, whether it is e-payment or Point of Sale (PoS), there is always cash at the end of it. So, the frequency of cash payment may reduce, but the ultimate value of cash remains a constant and this is one of the issues that engage the expert attention of Central Banks around the world. Even in the United States of America with all the advances in e-payment and card transactions, significant cash transaction volumes exist.”