France continues to embrace cash as tender. According to a recent article, a survey conducted in France revealed that cash made up 36.6% of total transaction volume in 2022-—despite ongoing efforts to boost banking penetration, enhance the payment card acceptance infrastructure, and place a cap on cash transactions.
Last year, payment card usage in France averaged 199 transactions per card, according to the survey. That’s higher than other leading payment markets, including the U.S., Canada, Italy, and Spain.
The country’s efforts to promote the use of credit cards has helped, and this includes the availability of a multi-functional card, which contains both debit and credit card features—one of the most popular combinations. That, coupled with the country’s advancements into the digital payments space, has spurred credit card usage. Indeed, card usage in the region accounted for 37.4% of total transaction value in 2022.
Consumers Still Rely on Cash
Payment innovations are prompting many countries to go cashless, however, we haven’t reached that point yet. Sweden, one of the world’s strongest supporters of a cashless society, had to backpedal its efforts in order to ensure its citizens still had access to cash when they needed it. Australians also recently led protests against the perceived intrusion of digital payments dominating society.
In the U.S., Detroit’s City Council voted to prevent businesses from not accepting cash for payments, and other major cities have followed suit, including New York and Philadelphia.
The case made for the aforementioned events reveals that there are still large portions of populations worldwide that remain unbanked. Financial inclusivity must still remain top-of-mind for governments and financial institutions alike.
“In many cash economies, there is a persistent issue between governments who want to ensure sellers are on the tax rolls and merchants who often enjoy unreported cash,” said Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research. “Javelin has seen this issue in several markets beyond France, such as China, India, and Mexico.”
“Central banks tend to endorse the use of cards to provide a fuller picture of inclusion, and IRS equivalents in many jurisdictions insist on that the document accompanying payment cards be the solution,” he said. “You can expect friction to continue, but moving away from cash makes sense in the long term, not only for security, but for transparency.”
