Home Finance The Future of Cash: Exploring the Vital Role of Physical Currency in Driving Financial Inclusion, Flexibility and Choice

The Future of Cash: Exploring the Vital Role of Physical Currency in Driving Financial Inclusion, Flexibility and Choice

by internationalbanker

By Octavio Marquez, President and Chief Executive Officer, Diebold Nixdorf





For the last 5,000 years, society has employed physical currency in some form, dating back to ancient Mesopotamia. Yet, as we entered a global pandemic in early 2020, serious questions about the possibilities and practicalities of cashless societies began to arise. This is not a new phenomenon, as digital currencies, which have been around in one form or another since the 1980s, are another driver of the narrative around the decline of cash.

Despite all this, cash remains extremely resilient, with estimates of roughly $40 trillion in physical money in circulation in 2023.1 While the pandemic may largely be in the rear-view mirror, its impact on cash continues to be felt. It is more important than ever to recognize the significance of cash in our everyday lives and what the banking industry can do to ensure communities worldwide are actively banked and empowered to shift from cash to digital on their own terms. We also need to acknowledge the role of cash in enabling flexibility, choice and privacy throughout the commerce landscape.

The first question we should ask ourselves is whether the narrative of cash being on the decline is entirely accurate. While the global growth rates of electronic payments (direct debits, credit transfers and payment cards) have increased over the last several years, cash usage has remained relatively steady. In fact, many may be surprised that the amount of cash in circulation has increased in the United States (and many other countries across the globe) over the last few years.2 While more cash in circulation does not directly correlate with the amount of cash used in transactions, we are seeing a renaissance of cash-based transactions in many countries after a significant drop in 2020. We expect these numbers to remain steady and, in some cases, continue to grow in the coming years. Despite innovations in digital payment options, cash supply remains a major factor in financial institutions’ day-to-day operations, particularly as consumers rely on cash for everyday transactions such as small-value purchases, babysitter fees and tips for service workers (especially around the holidays). We also see an influx of cash use during power outages and natural disasters as a reliable backup in increasingly extreme weather conditions. As the Federal Reserve Bank of San Francisco’s “2023 Findings from the Diary of Consumer Payment Choice” recently highlighted, “Consumer payment preferences tend to be sticky, so the stabilization of cash payments since 2020 suggests an underlying and consistent level of demand for cash.”3

Currently, we find ourselves at a major inflection point in the financial-services industry. Fears of a global recession marked the first half of 2023. Bank failures in certain markets, record inflation and rising interest rates have caused many to closely examine how and where they store their money. The impact this has had on the future of cash is perhaps most evident in the changing trends we see amongst younger generations, many of whom are impacted by economic volatility for the first time. You may be surprised that Generation Z (GenZ), or Zoomers, in the United States and the United Kingdom are radically altering their cash usage. According to a recent study by The Harris Poll on behalf of Credit Karma, 69 percent of Zoomers reported using cash more today than 12 months ago, and nearly a quarter (23 percent) use cash for most purchases.4 Trends such as “cash stuffing” have gone viral on social-media platforms such as TikTok in recent months, further influencing how Gen Z consumers view the value of physical currencies.5 The impact we see from this has also affected global markets, as recent studies have found similar preferences for cash in Greece.6 Financial institutions must monitor these trends closely and be prepared for a potential cash renaissance as Gen Z customers take on a larger portion of the global economy.

Cash is also critical to financial inclusion. Across the globe, we see more governments and economies realizing that cash access is at the heart of financial inclusion. In Sweden, after a major push to remove the amount of cash in circulation, the country’s national bank (Sveriges Riksbank) is calling for strengthening cash’s position to support those who need to use it to manage their finances better, as well as for elevated preparedness in times of crisis.7 Similarly, in the UK, the government took action in 2022 to give the UK’s financial regulator, the Financial Conduct Authority (FCA), power over the country’s largest banks to “ensure that cash withdrawal and deposit facilities are available in communities across the country.8 In China, one of the world’s fastest adopters of cashless payments, the People’s Bank of China (PBOC), the country’s central bank, has started to levy fines against public and private institutions that refuse to accept cash.9 While arguments for cashless societies often generate flashy headlines, the growing acceptance among world leaders and central governments that cash is critical to protecting access to business and sustaining financial inclusion across the globe is the reality.

The futures of financial inclusion and cash will be significantly impacted by how financial institutions view the traditional branch in a post-pandemic world. It’s important to acknowledge that many banks are laser-focused on their operating expenses, especially regarding their staff, as employee costs now account for more than half of banks’ total operating costs around the globe. Data trends suggest that the number of bank branches will continue to decline worldwide, reducing key cash access points. While technology has allowed banks to be more agile and innovate in how they offer products, reducing branches or limiting the number of hours a branch is staffed and open still poses major threats to financial inclusion.

We saw this come to a head in Spain last year when a retired 78-year-old doctor sparked a grassroots movement to protest the rapid shift toward online banking services and fewer operating hours.10 The rallying cry of “I’m old, not an idiot” resonated with many aging citizens in the country who relied on cash access and felt as if services in the country were disproportionately harming the community’s most vulnerable members. The movement ultimately resulted in the Spanish government pledging to offer better services to senior citizens, including extending branch hours, prioritizing older customers and simplifying their digital technologies. While protecting aging citizens may be just one piece of the financial-inclusion puzzle, stories like these highlight financial institutions’ responsibilities to ensure that potential changes to the traditional branch model are considered thoughtfully and strategically so that innovation does not subvert inclusion. ATMs (automated teller machines) and kiosks have played—and can continue to play—increasingly important roles here.

While increasing branches and ATM channels will certainly expand access to cash, provide additional flexibility in payment choices and support financial-inclusion efforts, the prospect of making that happen in every area with significant unbanked populations will likely require more complex solutions. For instance, in Brazil, where we see an overall trend of declining branch numbers, we also see some institutions taking the opposite approach by launching branches to promote financial inclusion. In 2022, the state-owned Caixa Econômica Federal announced it would increase the country’s number of branches and planned to have one-third of the new branches deployed in Brazil’s second poorest region, with 100 focused on agribusiness.11 In Ohio, where Diebold Nixdorf is headquartered and branch closures outpace the national average, local elected officials are speaking out and raising awareness for financial inclusion’s critical role in the overall health of the state and its citizens.12 Stories like these highlight that federal and local governments across the globe are keenly focused on how branch reductions impact their communities. Increased focus on financial inclusion is a key step in addressing the problems at hand, but we also need financial institutions to implement solutions that will make inclusion a reality.

What is the general path forward for ATMs and cash? Part of the equation is meeting consumers with the type of ATM solutions for which they are looking. According to NielsenIQ’s “Motivations in Modern Banking” survey, consumers are more amenable to self-service branch solutions than ever before, and in the US, 86 percent of consumers use self-service systems to conduct transactions.13 The other part of the equation, however, is how financial institutions can more efficiently and effectively manage cash handling to maintain or even increase access to cash while driving down maintenance costs. Cash automation and recycling (the ability of an ATM to accept, sort and store cash deposits and then dispense them in subsequent transactions) promise to be other vital parts of the equation.14 By leveraging cash recycling, banks can use their customers to complete the job of replenishing ATMs for free, and the closed cash cycle in these types of systems ensures that deposited cash is available again for withdrawal, significantly reducing banks’ expenses. By marrying the latest in self-service innovation with the efficiencies of cash automation, financial institutions can ensure access to cash while adapting to changes in the overall banking landscape.

There is no denying that we are now in a period of evolution and adaptation in the financial industry. However, some 1.4 billion adults remain unbanked globally, and that number will only continue to grow as populations expand if financial institutions are not thoughtful about how they approach their branch strategies and cash.15 While countries with small unbanked populations (such as Denmark16 and Sweden17) experiment with cashless economies, these innovations do not make sense for the rest of the globe. Financial institutions must be responsible for maintaining access to cash if they are truly serious about championing financial inclusion. As cash continues to maintain its relevance and resiliency globally, it will be more critical than ever for financial institutions to approach access to cash with at least the same amount of consideration as do their customers, who rely on that access to survive and live their daily lives. If we, as leaders and innovators in this industry, remain committed to that goal, we can sustainably grow financial inclusion and provide more payment choices, privacy and greater flexibility, all while shrinking our planet’s unbanked population to promote economic growth and access further.



1 Money Transfers: How Much Money Is in Circulation in 2023?”, Rebekah Carter, October 6, 2023.

2 Bank for International Settlements (BIS): T2: Stock of money available for payments,”Total banknotes in circulation in the United States, 2017-2021.

3 Federal Reserve Bank of San Francisco: “2023 Findings from the Diary of Consumer Payment Choice,” Emily Cubides and Shaun O’Brien, May 5, 2023.

4 Credit Karma: “Cash is King for Gen Z as Cash Stuffing Trend Catches On,” May 1, 2023.

5 Wired: A Low-Tech Money-Saving Hack Is Thriving on TikTok,” Nicole Gull McElroy, May 12, 2023.

6 eKathimerini: “Young consumers more likely to use cash than older people,” Despina Konti, May 24, 2023.

7 Sveriges Riksbank: The position of cash as legal tender needs strengthening,Payments Report 2021, 3. The Riksbank’s work and policy, November 3, 2021.

8 Gov.UK/HM Treasury: New powers to protect access to cash,” May 19, 2022.

9 Fortune: China’s society is going cashless. Now its central bank is pushing back,” Grady McGregor, January 26, 2021.

10 The New York Times: “‘I’m Old, Not an Idiot.’ One Man’s Protest Gets Attention of Spanish Banks,” Raphael Minder, March 25, 2022.

11 IstoÉ Dinheiro: Guimarães: Caixa to open 268 more branches and hire 4,000 more employees,” October 19, 2021.

12 Crain’s Cleveland Business: Ohio outpaces national average for bank branch closures,” Jeremy Nobile, January 20, 2023.

13 Diebold Nixdorf/NielsenIQ: “Motivations in Modern Banking Survey: Beyond the ‘Who’: Understanding Why Consumers Respond in Certain Ways,” November 2, 2021.

14 Vending Times: How cash recyclers help meet changing customer needs,” Elliot Maras, September 6, 2023.

15 The World Bank: “COVID-19 Boosted the Adoption of Digital Financial Services,July 21, 2022.

16 PYMNTS: No Cash Equals No Bank Robberies in Denmark,” January 4, 2023.

17 Wired: Sweden’s cashless society dream isn’t all it’s cracked up to be,” Morgan Meaker, June 4, 2020.



Octavio Marquez currently serves as the President and CEO of Diebold Nixdorf, where he is responsible for driving the organisation’s global strategies and performance to deliver secure, consumer-driven solutions and related services for customers across the financial and retail industries. Marquez has more than 25 years of leadership experience in the banking, technology and IT sectors, helping to automate, digitise and transform how people bank.


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