More Digital Payments, Yet Cash Still Matters: Why?

Reading time 2 minutes

Published on 30/04/2026

Although we are increasingly paying with cards, apps and other digital payment methods, cash continues to play a central role in everyday life.

This is the key message of the latest episode in the European Central Bank's (ECB) video series Espresso Economics, entitled "The More We Digitalise, the More Cash We Keep: Here's Why".

The video begins with a finding that may come as a surprise: the growing use of digital payments has not led to the disappearance of cash. On the contrary, over recent decades the amount of euro banknotes in circulation has increased, even though cash is used less frequently for day-to-day purchases.

Why is cash still so important?

According to research published in the ECB's Economic Bulletin, cash serves purposes beyond making payments.

Many people regard it as a store of value - something to keep on hand "just in case", particularly during periods of uncertainty or crisis. This helps explain why demand for banknotes can remain high even when cash is used less often for everyday transactions. Economists refer to this phenomenon as the "banknote paradox".

Research also shows that:

• payment habits change slowly: once people become accustomed to a particular method of payment, they tend to keep using it;
• cash cannot easily be replaced in every situation, for example when there is no internet connection or for small-value payments;
• younger people, despite making frequent use of digital payment tools, still place value on having cash available.

All of this helps explain why digital payments and cash continue to coexist today. The future is likely to be a "hybrid" one, in which new technologies and traditional payment methods complement one another.

Watch the latest episode of Espresso Economics and discover why, even in an increasingly digital world, cash continues to matter.

You can watch all the other episodes on the YouTube channel. Enjoy!