Editing Cash (section)

==Competition of cash==

===Cashless payments===
{{Main|Cashless society}}
[[File:Credit-cards.jpg|thumb|right|200px|[[Credit card]]s are used for cashless payments. With a credit card, the credit card company grants a [[line of credit]] to the card holder. The card holder can make purchases from merchants, and borrow the money for these purchases from the credit card company.]] 
[[Cashless society]] can be defined as one in which all financial transactions are handled through "digital" forms (debit and credit cards) in preference to cash (physical banknotes and coins). Cashless societies have been a part of history from the very beginning of human existence. Barter and other methods of exchange were used to conduct a wide variety of trade transactions during this time period.<ref>{{Cite web|url=https://newsroom.mastercard.com/2013/10/09/cost-of-cash-in-the-united-states/|title=Cost of Cash in the United States|website=MasterCard Social Newsroom|language=en-US|access-date=2019-12-05|archive-date=2021-08-06|archive-url=https://web.archive.org/web/20210806105101/https://newsroom.mastercard.com/2013/10/09/cost-of-cash-in-the-united-states/|url-status=dead}}</ref>

Since the 1980s, the use of banknotes has increasingly been displaced by credit and debit cards, electronic money transfers and [[mobile payment]]s, but much slower than expected. The [[cashless society]] has been predicted for more than forty years,<ref>{{Cite web|url=http://www.cashrepository.com/2017/03/myth-the-cashless-society-is-just-around-the-corner/|title=Myth: The Cashless Society is Just Around the Corner|access-date=2019-07-11|website=Currency Research|archive-date=2019-07-11|archive-url=https://web.archive.org/web/20190711001625/http://www.cashrepository.com/2017/03/myth-the-cashless-society-is-just-around-the-corner/|url-status=dead}}</ref> but cash remains the most widely used payment instrument in the world and on all continents.<ref name=CashReport>{{Cite web|url=https://cashessentials.org/app/uploads/2018/07/2018-world-cash-report.pdf|title=World Cash Report 2018|access-date=2019-07-11|publisher=G4S Cash Solutions, Payments Advisory Group|publication-date=2018-07-01}}</ref>{{rp|14}} In 17 out of 24 studied countries, cash represents more than 50% of all payment transactions, with Austria at 85%, Germany at 80%, France at 68%. The United Kingdom at 42%, Australia at 37%, United States at 32%, Sweden at 20%, and South Korea at 14% are among the countries with lower cash usage.<ref name=CashReport/>{{rp|27}}

By the 2010s, cash was no longer the preferred method of payment in the United States.<ref>{{Cite web|url=https://www.usatoday.com/story/money/nation-now/2016/09/04/cash-cashless-society-credit-cards/89726644/|title=A cashless society? Some retailers turn noses up at currency|last=Tompor|first=Susan|website=USA TODAY|language=en-US|access-date=2019-12-05}}</ref> In 2016, the United States User Consumer Survey Study reported that three out of four of the participants preferred a debit or credit card payment instead of cash.<ref>{{Cite web|url=https://count-money.com/2016-and-2017-surveys-of-consumer-payment-choice-summary-results/|title=2016 U.S. Consumer Payment Study|last=Count-Money|date=2016|website=count-money.com}}</ref> Some nations have contributed to this trend, by regulating what type of transactions can be conducted with cash and setting limits on the amount of cash that can be used in a single transaction.<ref>{{Cite web|url=https://cashappguide.com/|archive-url=https://web.archive.org/web/20201027112755/https://cashappguide.com/|url-status=dead|archive-date=2020-10-27|title=cashappguide|date=2017-12-14|access-date=2019-12-05}}</ref>

Cash is still the primary means of payment (and store of value) for [[unbanked]] people with a low income and helps avoiding debt traps due to uncontrolled spending of money. It supports [[anonymity]] and avoids tracking for economic or political reasons.<ref>{{Cite web|url=https://reason.com/2019/07/02/hong-kong-protests-show-dangers-of-a-cashless-society/|title=Hong Kong Protests Show Dangers of a Cashless Society|date=2019-07-02|access-date=2019-07-11|last=O'Sullivan|first=Andrea|quote=Many digital payments can be tracked, potentially assisting an authoritarian crackdown.}}</ref> In addition, cash is the only means for [[contingency plan]]ning in order to mitigate risks in case of [[natural disasters]] or failures of the technical infrastructure like a large-scale power blackout or shutdown of the communication network.<ref>{{Cite web|url=https://www.cashmatters.org/blog/swish-crashes-during-popular-football-event-in-skovde-sweden/|title=Swish crashes during popular football event in Skövde, Sweden|website=Cash Matters}}</ref> Therefore, central banks and governments are increasingly driving the sufficient availability of cash. The [[Federal Reserve|US Federal Reserve]] has provided guidelines for the continuity of cash services,<ref>{{Cite web|url=https://www.frbservices.org/financial-services/cash/business-continuity/index.html|title=FedCash Services Business Continuity Guide|access-date=2019-07-11|website=The Federal Reserve}}</ref> and the Swedish government is concerned about the consequences in abandoning cash and is considering to pass a law requiring all banks to handle cash.<ref>{{Cite web|url=https://www.cashmatters.org/blog/swedish-government-expected-to-pass-law-requiring-all-banks-to-handle-cash/|title=Swedish government expected to pass law requiring all banks to handle cash|date=2019-04-18|access-date=2019-07-11|website=Cash Matters|quote=If the power supply is cut it is no longer possible to make electronic payments. For reasons based purely in preparedness, we need notes and coins that work without electricity.}}</ref>

===Digital and virtual currencies===
{{Main|Digital currency|Virtual currency}}
[[Digital currency]] is a generic term for various approaches to support secure transactions of the public or using a [[distributed ledger]], like [[blockchain]], as a new technology for decentralized asset management. The blockchain 1.0 era has enabled the application of virtual digital currencies in the marketplace, such as money transfer and payment systems.<ref>{{Cite journal |last1=Pan |first1=Xiongfeng |last2=Pan |first2=Xianyou |last3=Song |first3=Malin |last4=Ai |first4=Bowei |last5=Ming |first5=Yang |date=2020-06-01 |title=Blockchain technology and enterprise operational capabilities: An empirical test |url=https://www.sciencedirect.com/science/article/pii/S0268401219301471 |journal=International Journal of Information Management |language=en |volume=52 |pages=101946 |doi=10.1016/j.ijinfomgt.2019.05.002 |s2cid=182010891 |issn=0268-4012}}</ref> It considers establishing an electronic version of the national currency which is backed by the central bank as the issuer. [[Virtual currency]] is a digital representation of value that is neither issued by a central bank or a public authority, such as [[Bitcoin]].<ref>{{Cite web|url=https://eba.europa.eu/documents/10180/657547/EBA-Op-2014-08+Opinion+on+Virtual+Currencies.pdf|title=EBA Opinion on 'virtual currencies'|date=4 July 2014|access-date=11 July 2019|website=[[European Banking Authority]]}}</ref> Facebook's concept for the [[Diem (digital currency)|diem]] is based on a token to be backed by financial assets such as a basket of national currencies. 

In 2012, [[Bank of Canada]] was considering introducing digital currency.<ref>{{cite news| url=https://www.pcmag.com/article2/0,2817,2402982,00.asp | work=PC Magazine | first=Adario | last=Strange | title=Canada Asks Developers to Create Digital Currency | date=13 April 2012}}</ref><ref>{{cite web |author=Randy Boswell |date=6 April 2012 |title=Canada unveils digital currency |url=https://montrealgazette.com/business/Canada+unveils+digital+currency/6419676/story.html |work=The Gazette |archive-url=https://web.archive.org/web/20120410222104/http://www.montrealgazette.com/business/Canada%2Bunveils%2Bdigital%2Bcurrency/6419676/story.html |archive-date=10 April 2012 }}</ref> Meanwhile, it rates digital currency a fairly complicated decision and is analyzing the pros and cons and working to determine under which conditions it may make sense to, one day, issue a digital currency. As a threat, a central bank digital currency could increase the risk of a run on the banking system.<ref>{{Cite web|url=https://www.bankofcanada.ca/2019/04/the-road-to-digital-money/|title=The Road to Digital Money. From beaver pelts to paper money to digital currencies|date=1 April 2019|access-date=11 July 2019|website=Bank of Canada}}</ref>

Also in 2012, [[Sveriges Riksbank]], the central bank of Sweden, was reported to analyze technological advances with regard to electronic money and payment methods for digital currency as an alternative to cash.<ref>{{cite web|author=Malin Rising |url=https://news.yahoo.com/sweden-cash-king-no-more-082544562.html |title=In Sweden, cash is king no more – Yahoo! News |publisher=News.yahoo.com |date=17 March 2012 |access-date=15 August 2012}}</ref> In 2019, it is investigating whether [[Swedish krona]] need to be made available in electronic form, the so-called e-krona, and if so, how it would affect Swedish legislation and the Riksbank's task. It has started procuring a technical supplier to develop and test solutions for a potential future e-krona. No decisions have yet been taken on issuing an e-krona.<ref>{{Cite web|url=https://www.riksbank.se/en-gb/payments--cash/e-krona/|title=E-krona|date=19 June 2019|access-date=11 July 2019|website=Sveriges Riksbank}}</ref>

===Costs of payment===
An analysis by the [[Deutsche Bundesbank]] in 2017 found that a cash payment in retail costs an average of 24 [[euro]] cents, while payments with a [[girocard]] cost 30 cents (or often 0.3 to 0.4% of sales plus a transaction fee) and with a [[credit card]] charge one euro which is included in the sales price.<ref>{{Cite book |title=Der Weg des Geldes: Grundlagen, Entwicklungen und Perspektiven des Bargeldes in Deutschland. |last=Beermann |first=Johannes |publisher=Siedler |year=2022 |isbn=978-3-8275-0165-3 |pages=179–206 |language=de |series=20 Jahre Euro. Zur Zukunft unseres Geldes |publication-place=Munich |trans-title=The path of money: Basics, developments and perspectives of cash in Germany}}</ref> This is why retailers often refuse to accept card payments below a minimum amount. Depending on the account model, there are also booking costs for the account holder with an average of 35 euro cents charged for each(!) account posting. Because of this convenient source of income, commercial banks and credit card companies favor cashless payments.

In the case of cashless payment transactions, in addition to the documentation of the payment itself, the personal details of the payer are usually linked to the data of the payee according to the [[Know Your Customer]] (KYC) principle. This enables the payment process to be precisely traced for the payer and the payee. The constant increase in digitization leads to a more detailed recording of cashless payment transactions and their evaluation for advertising and marketing campaigns. Since this digital documentation is usually more centralized than before, the potential for abuse increases. On the other hand, the cash transactions are anonymous, unless purchasing profiles are recorded with the help of [[loyalty program]]s based on customer cards, and keep the payment landscape competitive.<ref>{{Cite web |date=2022-02-09 |title=Why Cash Matters |url=https://www.cashmatters.org/why-cash-matters-top-20-reasons-for-the-popularity-and-relevance-of-cash |access-date=2022-12-12}}</ref>