The Rise of Cash: Why Consumers Are Embracing Physical Currency Again

2023-10-02 07:54:00

In hard cash. The expression has never seemed so apt as it does today. Because the advantage of this means of payment is that we can see it, feel it, count it. However, at a time of inflation, cash is making a comeback in consumer wallets.

According to the Bank Card Group – which brings together most French establishments – in the first half of 2023, the French withdrew money in cash more often (+ 1%) and for larger sums (+ 5%). , than in the first half of 2022. An increase which, out of a total of 1 billion, still represents 10 million additional cash withdrawals.

Not insignificant given that automatic teller machines (ATMs) tended to be in decline for many years. Did you say dematerialization, contactless payment or with a smartphone? Chase away the notes and coins, they return to the cash register.

“Can’t spend money I don’t have”

For many French people, they have once again become synonymous with budget control. At the Vélizy-II shopping center, in Yvelines, Priscilla, 37, a single mother of two little girls, is one of the many consumers scrutinizing their shopping cart and examining their receipt. “I leave home with two tickets, 50 euros for food, 20 euros for extras,” she confides as she leaves the Auchan store. If I have done my calculations incorrectly on the shelves and the final score at the checkout is higher, I have no other choice but to return one product or several. »

Frustrating but effective, argues Priscilla as she walks away towards the parking lot, which customers reach via the shopping mall. Lipstick and eye shadow, the mother is flirtatious, even on the weekend. Along its path, Rituals, Yves Rocher, Marionnaud and Sephora sparkle with tempting offers. “No longer taking my bank card also prevents me from being tempted at that moment… she adds. Impossible, with cash, to spend money I don’t have. It’s 20 euros extra, not a cent more! » A technique which also makes it possible to avoid overdrafts and their share of agios or bank incident fees…

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At the Starbucks a little further away, Ilan, 24, sips a café latte that he paid for “in coins”. “So 20th century, huh? » he smiled, milk froth clinging to his upper lip. The young man takes a few coins from the pocket of his jeans which he shakes to make them clash. “I had lost the habit of withdrawing cash, but I got back into it,” he explains. There is an ATM from my bank near my house, it’s convenient. In cash, I feel like I can see what I’m spending better, it’s less abstract. Because I have deferred debit on my bank card, and I can tell you that it’s treacherous…”

A ritual before going shopping

The young man (re)discovered cash via social networks, where the envelope method, “cash stuffing” in English, went viral. On TikTok, multiple videos detail how to take advantage of it. Food, clothing, transport, health, leisure… An envelope, often transparent, is dedicated to each budget, all you need to do is slip in a sum of cash. On Amazon, sales announcements for dedicated wallets, with plastic pockets inside, have multiplied.

Vladimir, 73, a retired international civil servant, is not addicted to TikTok or Instagram. But he also pays in cash, for exactly the same reasons. “The prices are abominable,” he sighs, looking at his bill of 157 euros. Before leaving to run errands, he now has his ritual. “I go to the bank, take out some notes and take with me the amount I plan to spend. »

In his cart: bread, several packets of flour to make pancakes, water, milk, crème fraîche, chocolate. The retiree, who receives a pension of 2,000 euros per month, still has two older sons at home, aged 22 and 17. Of Ukrainian origin, he finds something to put into perspective in the conflict which is bloodying the country of his ancestors. “Inflation, comparatively, may seem like a problem for the privileged,” he says, looking sad.

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In any case, in other countries which are lucky enough to be spared by the war, the phenomenon recorded in France also occurs. In the United Kingdom, for example, UK Finance, the financial sector association, indicated that cash payments had increased in 2022 (+ 7%), a first in around ten years.

Bank cards, of course, have not disappeared. Far from there. Customers draw them en masse at the Vélizy checkouts. “But people dial their code less and less often, because they do not cross the 50 euro spending limit for contactless payment,” slips an Auchan cashier between two item scans. One of her colleagues comes by with what looks like discreetly collecting cash drawers. “Like in the old days,” says a grandpa leaning on his cane, “they’re going to put all that away in the trunk. » Another proof, if any were needed, that cash is back.

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