ZURICH, Nov 29 (Reuters) - The use of cash is set to
decline in an increasingly digital age, posing risks that the
crucial infrastructure to provide "crisis-proof" banknotes and
coins could erode, Swiss National Bank Vice Chairman Martin
Schlegel said on Tuesday.
A 2020 SNB survey of payment methods in Switzerland found
just under half of everyday payments were in cash, making it the
most frequently used way to pay. But this had dropped from 70%
in 2017, and the downward trend will likely continue, Schlegel
said in remarks prepared for a conference in Liechtenstein.
Declining cash usage puts pressure on cash infrastructure
because supplying and processing cash is a volume business, he
noted. Cash registers, ATMs, secure transport vehicles and
facilities are necessary regardless of how much cash is
The number of ATMs in Switzerland is already shrinking,
raising the risk that people will take out less cash and use it
less to make purchases.
"A reduction in access and declining acceptance could
therefore start a downward spiral, with more restricted access,
less use and more limited acceptance mutually reinforcing each
other," Schlegel said.
Cash offers important advantages, including making managing
money clear and simple, allowing everyone to participate in the
economy and in social life, and preserving privacy.
It requires little in the way of technical facilities at the
point of sale, so is particularly crisis-proof.
"You can still pay with banknotes even when a card terminal
has stopped working, when your mobile phone has no reception or
when there is no electricity. Cash therefore serves as an
important back-up in the event of local or even widespread
interruptions to card or app payments," he said.
(Reporting by Michael Shields; Editing by Susan Fenton)