Morocco’s Cash Paradox: Why Bills Are Booming While Digital Payments Rise
While the world races towards a cashless future, Morocco is bucking the trend. Cash in circulation has surged nearly 80% over the last five and a half years, reaching 449.8 billion Moroccan Dirhams (MMDH) by June 2025. This isn’t a temporary blip; it’s a deeply rooted economic reality that reveals a fascinating – and potentially problematic – divergence from global norms. Understanding this cash dominance is crucial for businesses, investors, and policymakers navigating the Moroccan market.
The Two Faces of Moroccan Finance
The Moroccan payments landscape presents a stark dichotomy. On one side, digital payments – bank transfers and card transactions – are experiencing robust growth. The volume of scriptural (non-cash) operations more than doubled between 2019 and 2024, hitting 625 million transactions valued at 5,542 MMDH. Bank transfers, particularly instant transfers, are leading the charge, formalizing business-to-business transactions and wage payments. Bank cards, with 22.6 million units in circulation, are becoming increasingly popular for everyday retail spending.
Yet, despite this digital progress, cash remains king. Its consistent growth – 20% in 2020, 6% in 2021, 11% in both 2022 and 2023 – demonstrates a resilience that defies international trends highlighted in reports from McKinsey, the European Central Bank (ECB), and Worldpay. These global analyses consistently point towards dematerialization, with digital wallets and cards gaining ground and cash steadily declining.
The Roots of Cash’s Continued Reign
Several interconnected factors underpin Morocco’s unique situation. A significant portion of the economy operates within the non-structured sector, functioning outside the formal banking system. This informal activity naturally favors cash transactions. Furthermore, financial inclusion remains a challenge, leaving a substantial segment of the population without access to banking services. Finally, deeply ingrained socio-cultural preferences contribute to a widespread habit of holding cash.
Even a recent tax amnesty, which temporarily encouraged banking of cash, only provided a fleeting moderation in the overall trend. This suggests the underlying drivers are far more powerful than short-term incentives.
The Declining Check: A Relic of the Past
While cash thrives, the check is rapidly becoming obsolete. Usage has fallen 13% in the last five years, with only 30.1 million operations recorded in 2024. Interestingly, the overall value of checks remains relatively stable, indicating a shift in their purpose – they are now primarily used for high-value, specific transactions rather than mass payments. However, a high rejection rate (3.23%) is eroding confidence and accelerating its decline.
Instant Transfers: A Key Driver of Digital Adoption
The rise of instant transfers is a particularly noteworthy development. Representing 3% of all scriptural transactions, this technology is streamlining payments and fostering greater transparency, especially within the formal economy. Its convenience and speed are attracting both businesses and individuals, contributing to the overall growth of digital payments. This aligns with broader global trends towards real-time payment systems, as discussed in a recent report by the Bank for International Settlements: https://www.bis.org/publ/work898.htm
Looking Ahead: Bridging the Digital Divide
The persistence of cash in Morocco isn’t necessarily a sign of resistance to modernization, but rather a reflection of the country’s unique economic and social structure. The challenge lies in bridging the gap between the formal and informal economies, expanding financial inclusion, and addressing the cultural factors that favor cash.
Future strategies will likely focus on incentivizing digital payment adoption among the unbanked population, promoting financial literacy, and leveraging mobile technology to reach remote areas. Furthermore, strengthening regulatory frameworks to combat illicit financial flows within the cash-based informal sector will be crucial. The success of these efforts will determine whether Morocco can fully participate in the global shift towards a more digitalized economy.
What steps do you think are most critical to reducing Morocco’s reliance on cash? Share your insights in the comments below!
