The Global Cost of Cash and the Digital Economy
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As the road to a wider cashless society has started to take shape globally, this research identified the countries that would profit most from a cashless world, including U.S., Netherlands, Japan, Germany, France, Belgium, Spain, Czech Republic, China and Brazil.
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The Global Cost of Cash and the Digital Economy
- 1. February 15, 2016 Global Cost of Cash and the Digital Economy: A Global Benchmarking Study
- 2. SMALLEST COST OF CASH 2 Around the world, cash costs are higher for those who are “less banked” Money deposited electronically Travel to deposit cash/check Travel to cash check Time/Money to Travel to ATM Check cashing + pay day loan fees Check cashing + pay day loan fees Pay digitally or with card Pay digitally or with card Pay digitally or with card Risk theft Risk theft Travel to home or ATM when cash is needed Travel to home or ATM when cash is needed ATM fees ATM fees* MEDIUM COST OF CASH LARGEST COST OF CASH *In some countries, the unbanked can cash paychecks at ATMS or withdraw cash on pre-paid cards.
- 3. 3 Absolute Cost of Cash Low High The cost of cash, including fees and the opportunity cost of time spent, varies widely across countries. High costs of cash affect countries across the income spectrum and of all population sizes. Source: Global Cost of Cash
- 4. China USA India Bangladesh Nigeria 4 Average transit time and cash access costs are high in some of the world’s most populous countries
- 5. 5 The cost of ATM maintenance is higher in parts of sub-Saharan Africa and Latin America, as well as large sparsely populated countries ATM Unit Maintenance Cost $USD* (PPP derived) $ 680 $ 8,876 Low High Source: Global Cost of Cash
- 6. 6 AVERAGE TAX GAP Lower Higher Countries in the developing world tend to have a greater tax gap and a greater degree of uncertainty about the reliability of the estimate of the gap. Source: xxxxxx
- 7. Nigeria Philippines Russia Brazil Japan USA South Korea India Belgium Absolute Cost of Cash DigitalEvolutionIndexScore(2013) Colombia Poland France Germany Spain EgyptIndonesia Netherlands ChinaCzech Republic Mexico Hungary Thailand Finland Sweden Ireland Denmark UK New Zealand Malaysia Turkey Estonia Israel Saudi Arabia Slovenia South Africa Kenya Italy • Colombia • Egypt • Hungary • India • Indonesia • Italy • Mexico • Egypt • Nigeria • Philippines • Poland • Russia • Thailand 7 More digitally evolved countries with high cost of cash have the greatest potential for unlocking value by transitioning to digital money Sources: Global Cost of Cash, Digital Evolution Index Countries with lower costs can still realize additional value by accelerating transition to digital money Low High GREATEST POTENTIAL NEED TO INVEST IN DIGITAL INCLUSION FIRST • Belgium • Brazil • China • Czech Republic • France • Germany • Japan • Netherlands • Spain • USA
- 8. 8 Countries with high cash production costs (as a percentage of GDP) can benefit from savings by migrating to digital money RIPE FOR SAVING NEED TO INVEST IN DIGITAL INCLUSION FIRST TO SAVE • Czech Republic • France • Estonia • Hong Kong • Japan • Turkey • Brazil • Hungary • Nigeria • Philippines • Poland • Russia • South Africa • Thailand • Italy Large % of population without bank account Small% of population without bank account Sources: Global Cost of Cash, Digital Evolution Index, World Bank Findex Low High
- 9. Large % of population without bank account Small% of population without bank account 9 Countries with higher levels of corruption are correlated with lower levels of digital evolution, as well as lower levels of financial inclusion Sources: Global Cost of Cash, Digital Evolution Index, World Bank Findex, Transparency International Bad Good
- 10. 10 The Cost of Cash Series In-depth country level insights MexicoUSA India Learn more: http://fletcher.tufts.edu/CostofCash
- 11. Research conducted by: Institute for Business in the Global Context fletcher.tufts.edu/IBGC @IBGC_Fletcher Principal Investigator Dr. Bhaskar Chakravorti Analysis & Visualizations Christina Filipovic, Caroline Troein, Yan Bai With support from: MasterCard Center for Inclusive Growth www.mastercardcenter.org @CNTR4growth CNTR4growth@mastercardcenter.org