Expert news and views on cash, ATMs and the payments industry


Cardtronics Blog

Cash – Essential to Financial Inclusion for Society and the World Economy

03/19/2018 - Tom Pierce
While the concept of a ‘cashless society’ is a sign of progress for some, for many others across the globe, such a reality will block any societal advancement. This is because financial security is beyond the reach of millions – in fact, the Wall Street Journal reports that roughly one fourth of American adults have little or no access to a bank. The introduction of a cashless society could potentially shift these individuals into a new, digitally divided underclass lacking access to high-tech apps or payment cards, and unable to partake in more sectors of the economy.

farmers market_smThe startling volume of unbanked and underbanked adults highlights the need for us to come together as a society to ensure consumers maintain the right to choose and use cash, which is unique among all payment methods in enabling financial inclusion for all. Initiatives such as The Wall Street Journal’s Financial Inclusion Challenge, which this week will announce the finalists for this year’s contest, help raise awareness of the issues of financial inclusion, as well as improve the financial health of low- and moderate-income people.

In reality, access to cash is an essential component for empowering the underbanked and unbanked. Take, for example, a recent study estimating that cash reaches two billion underbanked people and is embedded in many cultures and monetary systems. The study,published by ATMIA, the global ATM trade association, concludes that curtailing cash would create “unbridgeable social and class divides in the future.” 

In the U.S., 27 percent of households – 33 million households – are considered unbanked or underbanked, the Federal Deposit Insurance Corporation estimates. These households represent tens of millions of dollars of purchasing power within the U.S. economy annually. The FDIC calculates that 62.3 percent of unbanked households and 27.7 percent of underbanked households paid a bill using cash. If the cash option were to be removed, so too would those dollars from the economy.

As ATMIA CEO Mike Lee notes, “People trust cash as a store of value, and it remains a means of payment that can be used by absolutely anyone at any time.”

The usefulness of cash for financial inclusion, especially in sustaining rural and other isolated areas globally, is clear. In India, for example, where farmers complain that banking isn’t speedy, cash is preferred for payments, because checks often take days to clear and rural areas lack banks. In Brazil, while the percentage of unbanked declined to 56 percent in 2016 from 68 percent in 2013, cash still is how half of the economically active citizens receive their wages. Eighty-six percent of Brazilian retailers prefer cash payments and 70 percent of all retail payments are made in cash.

Even in developed countries, the lack of access to cash threatens to financially exclude residents, thus the necessity for self-service banking when a bank branch closes or the bank shrinks its ATM footprint. In 2016, when residents and shopkeepers of Glastonbury, England, were left without access to banking services, Cardtronics worked closely with local businesses to find a site for two free-to-use cash machines.

The business sector also suffers from financial exclusion. In its report, ATMIA estimated that “over 200 million micro, small and medium-sized businesses also lack access to basic bank accounts and adequate financing.”

In short, foregoing access to cash would trigger dramatic changes for billions of people and millions of companies around the world who rely on physical currency, and in turn, these changes could have a negative and costly effect on the global economy. To ensure financial inclusion for all, we must come together to guarantee that cash is accessible and accepted as a form of currency throughout all sectors of the economy.

Tom Pierce
Chief Marketing Officer