The Impact of ATM Transactions and Cashless Payments on Cash Demand in Austria

Abstract

The aims of this study are twofold: to determine the levels of cash inventories held by Austrians and to examine how ATM transactions and cashless payments affect their demand for cash. The key results of this study are based on survey data on the cash withdrawal habits of Austrians aged 14 and over. The results suggest that the cash held by this group of individuals for transaction purposes accounts for only a relatively small share of the total cash in circulation (approximately 10%). Furthermore, it can be seen that individuals who use ATMs withdraw cash more frequently and consequently hold significantly smaller amounts of cash than individuals who do not use ATMs. The study also deals with cashless payments, which were found to have had an impact on the use of cash: the share of cash payments has fallen since 2000 (projections suggest a decline of some 6 to 7 percentage points from 2000 to 2002). This development is attributable primarily to robust growth in debit card transactions. Despite the rise in cashless payments, currently the share of cash payments (in value terms) is likely to be above 70%, so that cash remains by far the most important means of payment in Austria. The results of this study therefore show that ATM transactions and the increased use of cashless payments have had a significant impact on cash demand in Austria and will probably continue to do so in future. Since, however, cash withdrawal and payment habits are unlikely to change overnight, this development should not have much impact on monetary policy.

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