Share of cashless payments.
Here are interesting results from the study of Master Card on cash vs. digital transactions in 33 countries. The study categorises these 33 countries into four groups based on the cashless payments. The list of cashless countries is also mentioned below.
Inception Countries: Most of the developing nations are falling under this category. 90% of the customer transactions are through cash. The main reason for large cash transaction is due to the absence of a broadly available cashless infrastructure.
In countries like Italy and Greece, the preference for cash is driven more by cultural factors.
Transitioning countries: This category includes a mix of developed and developing countries. 80–90% of consumer payments are through cash transactions.
The reasons for heavy cash use in these countries vary from country to country. In Japan, the preference to cash appears to be cultural, helped by the country’s full ATM network.
Growing middle-class families in Brazil and China have started using the digital payments instead of cash transactions. This change has made these two countries to fall in transitioning class instead of inception category.
In Spain, high cash usage is due to country’s sluggish economy resulting from ongoing effects of 2008 financial crisis.
Tripping Category: Countries in the tipping point category have moved to cashless transactions. However, cashless transactions share is in between 29–45% in tipping point countries. This large percent is due to lack of cashless solutions for either high value or low volume transactions.
Advanced Category: Countries where cashless solutions are widely available and followed up by the vast majority of the population fall under this category. Every citizen in this country use at least a debit card or credit card or merchant
Singapore, Netherlands, Sweden, France and Canada stands among the top 5 countries in cashless transactions.
The growth of cashless payments.
Among the inception countries, the most impressive growth is in Kenya. Innovative payments solutions in the country are bringing every person irrespective of income levels into the digital payments ecosystem.
South Africa and UAE are seeing strong growth, driven mainly by financial inclusion initiatives.
Poland is showing an increase in growth based largely on the rapid expansion of credit and debit cards.
Among transitioning countries, China has shown strongest growth. China’s growth is because of rapid urbanisation and a strong government push to replace cash with digital payments.
Growth of Cashless transactions among 33 countries