Euros, dollars, pounds, yen... Used the world over, notes and coins are a symbol of countries. Throughout history, money has always played a pivotal role in the exchange of goods and services.

In early civilizations, transactions began with bartering, as villages would exchange surplus goods for necessities. However, a lack of parity between the goods being traded meant it soon became obsolete. Thus, cash was born. In fact, the first coins that gave products and services a specific value date back to the 12th century BC in Asia Minor. 

When do we use cash?

While consumers are constantly changing their habits, cash remains part of their day-to-day. We usually pay cash for smaller expenses like a coffee, a loaf of bread or public transport. 

While digital payments are gaining a lot of ground, notes and coins remain indispensable in many situations. Some places don’t have card payment capabilities or require a minimum amount to pay with plastic. That’s when not carrying cash becomes risky. 

While there are several ways to get cash, the most common is from an ATM. It’s very simple and available 24 hours a day, 365 days a year. All you have to do is take your physical or virtual credit or debit card — on a mobile phone or other device, as long as the device and the ATM use near-field communication (NFC) (or “contactless”) technology —, type in your pin number and choose the amount you want to take out. 

You can also withdraw cash without a card or pin if your bank allows you to do so using a code. All you need to do is go to your bank's app, choose the card you want to use and follow the instructions. You’ll then generate a code to type in at the ATM. 

Want to know which payment methods are available? Find out in this article (in Spanish) by Finanzas para Mortales (Finance for Mortals).

Advantages and pitfalls of using cash

Despite the boom in digital payment methods, cash has many advantages. Some of the most prominent are:

• Saving: Many consumers believe paying with cash is better to control their spending. Setting aside a monthly amount for things like recreational activities helps us plan our savings and avoid unnecessary spending.
• Autonomy: Digital payment receivers sometimes suffer technical glitches. By carrying cash, we avoid the chance that credit and debit card payments may not be available.
• Inclusion: Notes and coins are crucial to prevent the exclusion of vulnerable groups like the elderly or low-income households who may have less access to digital payment means.

Cash also has several downsides:

• Privacy: Paying and receiving in cash means transactions without a trace. This can lead to money laundering and tax evasion, which fosters the underground economy. Those illegal activities harm broader society.
• Less efficiency: Digital payments are faster than cash transactions. They can also be done anytime, anywhere, while using cash means having to go out, like to an ATM. 
• Security: Users’ main concerns include the theft or loss of cash.

Cash in the fight against inequality

Access to digital payment methods depends on location, purchasing power, age and other factors. That’s why we must keep cash transactions alive and, therefore, prevent the exclusion of groups like the elderly, low-income households and rural dwellers. 

For the latter, a lack of bank branches and coverage limits access and makes electronic payments difficult. Thus, it’s essential to carry money in your wallet. 

To overcome this and aid financial inclusion, some banks have agreements with outlets and couriers so people can deposit and withdraw money easily.

While there is no questioning the benefits of digital payments, keeping cash readily on hand is a must for the financial inclusion of millions of people. Its disappearance would only widen the gap in access to financial services.