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Cash Is Critical in Times of Crisis

Updated: Apr 18

Before I get into the meat of this post, I want to acknowledge that the events in Ukraine are on all our minds. Our hearts and thoughts are with those caught up in this conflict.


Among the photos coming out of Ukraine are images of the Ukrainian people lined up at ATM machines. These pictures underscore that cash, and access to it, is critical in times of crisis and uncertainty. Here at home in the Southeast, the Atlanta Fed is always on alert during hurricane season in the event that we have to step up our supply of cash to banks.


In addition, understanding the continuing role of cash in an increasingly digital world has been a core focus in the payments research we do through the lens of diversity, equity, and inclusion.


Cash remains an important payment option among our many other options, including cards, checks, apps, and digital currencies. There are many reasons some people prefer to use cash: it helps them manage their budget, they don't have a bank account, they lack access to internet or smartphones and therefore lack access to digital payment apps, they're comfortable with cash from a lifetime of use, they're seeking anonymity, or they just plain choose to use it.


Although some businesses had already stopped accepting cash by the time the pandemic hit, the pandemic opened the door for many other businesses to stop taking it. Some businesses stopped offering in-person services and went to online platforms where customers could not use cash, such as order ahead, curbside pickup, and delivery subscription services. Concerns about money and hygiene, the coin supply disruption, and the ease of using cards and apps also discouraged cash use.


Those who use cash, whatever their reason, have been affected by the decisions of these businesses and by other decisions stemming from the pandemic, according to survey data. They've also been affected by the reduced number of ATMs in the United States due to bank and business closures, often in rural and low-income areas, or due to changing policies affecting independent ATM operators. Access issues to ATMs even in the United States can make it more difficult, and perhaps more expensive, for people to get cash when they need it most.


In times of natural disasters, when electronic systems could fail, people turn to cash. People also turn to cash in times of manmade disasters. The reliance on cash as the go-to payment in times of crisis and as a personal choice underscores the need for cash preservation and ease of access.


While the Ukrainian people have much more important things to deal with, and our thoughts are with them as they navigate this crisis, understanding the role that access to cash plays in people's lives is something we will continue to look at here at the Atlanta Fed.



By Scarlett Heinbuch,

a payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed