2023-09-21 16:53:00
While the French have been turning away from cash for several years, withdrawals from ATMs have increased in 2023. With the constraints on purchasing power, cash would be a practical solution to better manage your budget.
Cash is back! After years of decline, cash withdrawn from automatic teller machines (ATMs) started to rise once more in 2023. According to data from GIE Carte Bancaire cited by The echoes, the amounts withdrawn in the first half of 2023 were up 5% compared to a year earlier. The number of ATM visits saw a more modest increase (+1%).
If the French withdraw cash a little more often and have a little more money in their pockets, it is because of inflation. We withdraw more because prices have increased but that is not the only explanation.
According to the GIE, the French have been relying more on cash in recent months to manage their budget. Payment by card, contactless, smartphones are very practical, but they distance consumers from the reality of money. Conversely, cash accentuates a phenomenon that psychologists call “the pain of paying.” “Breaking a ticket”, shedding 20 euros is more “painful” or at least more tangible than spending the same amount by simply swiping your card on a terminal.
This inclination to favor cash in recent months has also been fueled by a growing number of content on social networks. On TikTok, there are no less than 1.3 billion occurrences for the hashtag “Cash Stuffing”, literally “cash stuffing” in French.
Plus de 1,3 milliard d’occurrences sur TikTok pour le hashtag “Cash Stuffing” – TikTok
The idea is to fill envelopes with bank notes at the beginning of each month: one for food, one for leisure, one for restaurants, etc. And not to spend more money than the envelopes contain. A sort of self-payment cap for different types of expenses.
A method which particularly appeals to young people and not only French people since in the United Kingdom cash payments have increased even more strongly, by around 7% in one year.
However, will this cyclical attraction for cash continue once inflation returns to “normal” levels? Nothing is less sure. This attraction to cash is a symptom of a loss of confidence that we find during periods of crisis. During the 2008 depression, demand for cash increased before declining over the following decade.
The trend over a long period is indeed the gradual abandonment of cash in favor of simpler payment methods. Between 2016 and 2022, the share of cash transactions fell from 68% to 50%.
Cash payments have almost disappeared in Scandinavian countries. – BFMTV
A development that we are seeing throughout Europe. In some countries like Denmark or Finland, the species have even almost disappeared. The species will perhaps never disappear in France, the French are attached to them. But in the future they will increasingly have to pay for their baguette by card.
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