What is the role of cash in financial inclusion?


Unfortunately, the antonym of this statement is that financial exclusion also begins with payments, especially when using cash as a means of payment.

The BRI describes access to and use of cash as a “catalytic pillar” for financial inclusion and “the availability and acceptability of cash requires its physical production, distribution by the private sector – banks and ATM providers vending machines – and merchants to accept it.”

Risk of exclusion

People at risk of exclusion without convenient access to cash and its acceptance include “the elderly, people with disabilities, undocumented migrants, people living in or emerging from extreme poverty or homelessness, people in rural and remote areas and those with limited financial capabilities. ”.

Australia has a considerable number of people in these groups at a time when there is a continuing reduction in the availability and acceptability of cash.

The Australian Bureau of Statistics estimates that 2.5 million Australians live in regional or remote areas in Australia and the Australian Payments Network reported in June 2022 that there were 25,168 ATMs in Australia – the highest number low in 16 years. The number of ATMs peaked in the December 2016 quarter at 32,879 machines.

Financial inclusion is a global issue. According to a study by the European Union, the main barriers to older people’s access to basic financial services can be summarized in three categories: age limits, digitalization and poverty or low income.

The research aims to ensure the financial inclusion of the elderly, which benefits the individual, the family unit and society in general.

Study participants highlighted the many impacts of exclusion and they were grouped into three categories: reduction or loss of financial and social autonomy; reduced quality of life in terms of access to goods and services as well as a negative impact on self-image and mental health.

These impacts can be seen through the correlation between older generations and a vulnerability to online fraud and scams. Respondents indicated that older populations are often targets of fraud due to their lack of financial knowledge and digital skills.

Vanishing Cash

The EU report concluded by placing cash as its first necessary product for financial inclusion and recommending that cash be maintained as a viable form of payment.

However, cash is disappearing. Europe’s declining availability of bank branches and ATMs, especially in rural areas, is a major cash access issue for older Europeans who tend to prefer in-person transactions.

Mobility issues faced by older and disabled members of society must also be considered, as must minimum withdrawal amounts that must be low enough for low-income people to use ATMs.

Of course, digital banking services, well implemented and communicated, can also be powerful in solving physical accessibility issues.

In addition to ATMs, there are alternatives to accessing cash, such as cash back at retail outlets, banking at post offices, and neutral “branches” shared by service providers financial.

But underlying that is the premise that cash will continue to be accepted by merchants or utilities – and that’s already not always the case.

In the UK, legislation is in the works which will allow the financial regulator, the Financial Conduct Authority, to intervene to ensure that communities are not cut off from banking services. The goal is to “set” expectations for a reasonable distance to travel to deposit and withdraw money.


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