New research highlights benefits of the ‘physical ownership of cash’
04 February 2025
New research looking into how different payment methods influence spending behaviour has highlighted a new and interesting angle on the ongoing debate into the benefits of cash – and has found that using cash not only influences how much consumers spend but also offers a profound sense of psychological ownership not typically seen with digital payment methods.
The article, published in Qualitative Market Research in late 2024, not only reinforces the many benefits of cash – in particular its accessibility, resilience and data privacy - but also concludes that “when we handle cash, we are not just spending money, we are parting with a piece of ourselves.”
The Benefits of Cash
The research argues that while digital payments are certainly convenient, cash still has a vital part to play in both monetary systems and our society, offering three benefits that digital payments simply cannot match:
Accessibility and Inclusion – Cash is the only fully inclusive payment method out there. It’s accessible to everyone – including the elderly, those without access to banking services and those in rural areas. In recent years, access to cash has under threat with the increasing number of bank closures. However, new laws from the Financial Conduct Authority (FCA) were introduced in September 2024, meaning access to cash for both businesses and consumers will continue to be protected and improved.
Resilience – During times of natural disasters, power cuts and cyber-attacks, cash acts as an important fail-safe. Digital payments rely on electricity and internet connectivity, and when these are compromised, many businesses find themselves in dire straits if they don’t accept cash. Cash doesn’t break down, doesn’t rely on technology and keeps your business running in times of emergency.
Data Privacy – In a world where it increasingly feels like everything is done online, more and more consumers and businesses are becoming concerned about the privacy of their personal data. In contrast, transactions made in cash remain anonymous, meaning individuals can rest assured that they are not under unwelcome surveillance and at risk of fraud.
Ownership of Cash
So how do these benefits of cash translate into how we all feel about the physical ownership of cash?
Firstly, maintaining cash payments prompts more responsible spending behaviour. Handing over physical cash promotes our awareness of both spending money and how much we are paying. In contrast, card and mobile payments often feel disconnected from the money being spent.
Digital payments also often encourage overspending compared to cash, which is why we’ve seen a rise in cash payments during the ongoing cost-of-living crisis – spending cash helps people budget more effectively and allows them to feel more positive and in control of their finances.
Secondly, in a study conducted in 2016 by the University of Toronto into the behavioural science of cash payments, it was found that when paying in cash, consumers feel a greater emotional attachment to what they are buying.
The study found, amongst other things, that people who paid in cash made healthier choices when shopping for food, and also found an interesting outcome when examining charity donations – for those who donated in cash over 50% of them accepted and wore the charity ribbon given to them to thank them for their donation, whereas only 14% of those who donated by card did the same.
It seems to be true that cash elicits feelings and a real connection with what money is spent on - perhaps this comes from the childhood excitement of receiving cash in a birthday card and excitedly spending it on something you’ve wanted for ages and feeling proud as punch with your new item - whereas digital payments often result in over-consumption and a reduced attachment to both the product being purchased and in some cases, even the brand being purchased from.
Cash handling made easy
So, with the popularity of cash on the increase and cash payments benefitting both our well-being, as well as our bank balances, it’s vital that businesses are tuned into customer behaviour and preference and are offering them the option of how to pay for goods – and are keeping both cash and digital payments in the mix.
A white paper study from leaders in cash handling, Volumatic during the pandemic showed strong evidence that consumers demand payment choice and welcomed a mix of payment methods to keep everyone happy. Ultimately, a combination of cash and digital payments strengthens economic stability allowing banks to ensure fluidity and mitigate risks when it comes to system outages and cybersecurity threats.
And if handling and processing cash within your business causes you concerns, it doesn’t need to – thanks to the latest intelligent solutions from Volumatic. As cash handling experts, Volumatic know a thing or two about the benefits of cash for both businesses and consumers and can offer you solutions to fit the requirements of your business – and save you money at the same time.
Volumatic’s all-in-one cash handling solution, the CounterCache intelligent (CCi) has saved retail businesses up to 75% off their cash processing costs, and acts as a forgery detector, secure storage device and cash counter all-in-one – and when used with our latest cash management software, CashView Enterprise, it becomes an even more powerful tool, giving you live reporting, and visibility across your entire estate from POS to bank.
If an all-in-one solution is too advanced for your needs, you can also benefit from our range of money-counting scales, friction note counters and secure deposit devices, all of which offer time-saving and security benefits.
With the recent rise in National Insurance and the National Living Wage, on top of ever-increasing business costs, we know how challenging it is for businesses right now, but an investment in cash handling equipment can help boost both your businesses’ efficiency and your bottom line and offers yet another compelling reason to put faith in cash.