Cash usage in Finland – How much can be explained?

The electronification of retail payments has been rapid in Finland. The use of payment cards and credit transfers is very common. However, cash is still used quite widely, especially for small value purchases. There are no statistics available on values or numbers of cash payments, because cash is in open circulation and so it is impossile to trace all cash transactions. In this study we investigate cash usage during the period 1995—2000 and assess the share of cash usage that cannot be explained. According to our findings, the share of unexplained cash usage amounted to about one-half of currency in circulation in 2000. However, with the recent conversion to euro cash, we have additional information on cash usage. Using this new information, we find that the unexplained share of cash usage was less than one-third in 2000. Cash usage has recently been examined by the central banks of Norway and Sweden. We thus compare the results of three central bank studies. In addition, we discuss the euro cash changeover and the extra information now available on cash usage.