We’re using cookies, but you can turn them off in Privacy Settings. Otherwise, you are agreeing to our use of cookies. Learn more in our Privacy Policy.

view of bridge

Although the trend towards cashless payments is global, the pace, format and depth of coverage differ among jurisdictions. Service providers no longer need to rely on credit card vendors or retail banks, but must face issues of privacy and security.

Authors: Alan Lok, CFA; Eunice Chu, ACCA; Guruprasad Jambunathan, CFA, FRM; Publisher: CFA Institute

Download PDF


Although the general trend today is toward making cashless payments increasingly ubiquitous, the pace, format, and depth of coverage vary quite widely across jurisdictions. Consider Sweden, a developed nation on track to becoming an almost entirely cashless society by 2023. Only about 10% to 15% of point-of-sale purchases made by households use cash and many merchants no longer accept it at all. The same can be said of payments made in China: those who use notes and coins are mostly tourists.

That said, a few notable outliers among the industrial nations remain highly cash-centric, such as Germany and Japan. About 80% of German household point-of-sale purchases are still made using cash. In Japan, the largest coin is worth ¥500 (about US$5), meaning residents have little choice but to lug around pieces of metal. The attachment to physical funds in these countries, however, may reflect their recent traumatic past rather than an inability to embrace new technology. 

Despite these variations across jurisdictions, all online payment businesses around the globe face common challenges. One such challenge is disappearing geographic boundaries, which bring opportunity but also more convoluted tax issues. Another is the increasingly real-time nature of society. Satisfying the on-demand needs of consumers creates more intense pressure on hardware infrastructure, which also means much greater opportunity costs for any downtime.

For more articles in the series "Understanding Investment Fundamentals", visit the Sector Analysis page.

This publication has been assigned 1 Continuing Education (CE) credit under the guidelines of the CFA Institute Continuing Education Program. We encourage CFA Institute members to login to the CE tracking tool to self-document these credits. You can find more CE content in the Continuing Education section of ARX.


ARX Editorial Team

Director: Scott Lee
Content manager, Editor: Piotr Zembrowski, CFA
Coordinator: Natalie Yiu