We’re all the same, but everyone is different. While all countries are adopting electronic instruments, there are significant differences in the use of payment instruments. BRIC countries like Brazil and Russia use cash for more than 90% of all transactions; while developed countries like Japan and Italy for more than 85%; and Germany and Switzerland for 70-75%. Most of the other developed countries use cash for only 55-60% of their transactions. Non-cash payment instruments across the G-10 countries show three broad categories: cash-countries like Italy and Japan with low usage of non-cash instruments, the four check countries mentioned in chapter 7 (Canada, France, the UK and the US), and “ACH-countries” that rely on transfer payments and direct debits (including many Central and Northern European countries). Much research has been done into the causes of these differences. For example it has been argued that high cash usage may be related to high taxes and low crime rates. A better explanation could be that payment mechanisms are subject to network effects: the more people are using a certain instrument, the more valuable the instrument becomes to all users. Usage patterns differ by country and these differences are persistent: once an instrument has critical mass in a country, why would it change to a standard from another country, especially since cross-border transactions are such a low fraction of total?
Download chapter 8, Sprechen Sie cash?, here.