Cash to Remain an Option in the Digital Era

Cash will still have a role to play even as Barbados moves increasingly toward alternative payment methods, says Central Bank of Barbados Governor, Cleviston Haynes.

Speaking at the launch of the Central Bank's “Window to the World” banknote exhibition, Haynes acknowledged that the Central Bank believes the 

efficiency of electronic and digital payments could lead to greater productivity and competitiveness, and is therefore aiming to reduce the use of cash. He noted, however, that it was still important to have some level of cash in circulation to ensure the poor and the elderly were not excluded from the economy:

“A wholesale shift to digital payments or even debit and credit cards has implications for financial inclusion. For the traditionally unbanked, access to cash allows participation in the economy. The same is true of many older persons and other vulnerable members of society.”

He also said that cash can function as a back-up in situations where e-payments systems are impossible, such as in the aftermath of natural disasters or technological failures.

According to Haynes, the view that cash is still relevant in the digital era is not held by the Central Bank of Barbados alone. Saying that there was “a degree of consensus internationally on this issue”, the Governor cited both Swedish Central Bank Deputy Governor Henry Ohlsson and a 2019 UK government study.

In his presentation at the Central Bank of Barbados and Financial Services Commission’s Domestic Financial Institutions Conference earlier this year, Ohlsson, whose country leads the world in the move toward cashlessness, highlighted several benefits to cash, including financial inclusion and protection of consumers’ privacy.

The UK study stated “the [UK] government’s commitment to support digital payments whilst safeguarding access to cash for those who need it.”

Governor Haynes concluded his remarks at the event by asserting that there would be a role for cash even as the Bank promoted greater use of electronic payments:

“We acknowledge and encourage the changes to the payments landscape. But at the same time, it would be premature to write cash’s obituary. In the future, as we seek to increase efficiency through the use of electronic payments, cash may no longer be king, but it will remain a part of the mix.”