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The Impact of Financial Digitization on the Reduction of Cash Usage in Morocco

In: Proceedings of the International Conference on Multidisciplinary Research in Management and Economics (ICMRME 2025)

Author

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  • Safwane Sadki

    (Mohammed First University, University Laboratory for Research in Instrumentation and Organizational Management, Faculty of Legal, Economic, and Social Sciences of Oujda)

Abstract

At present, nothing seems capable of slowing down the widespread adoption of cash in everyday transactions. According to Bank Al Maghrib, the outstanding amount of currency in circulation, excluding cash held by banks, reached 412.8 billion dirhams. As a result, the share of currency in circulation relative to GDP has reached 30%. This phenomenon is increasingly worrying Bank Al-Maghrib and players in the payment ecosystem, who are struggling to identify the mechanisms behind its persistence. This study examines the impact of digital payments on reducing cash usage in Morocco, using an empirical approach and applying an ARDL model to annual data covering the period 2014–2023. The results reveal a short-term substitution effect, where the increase in card payments leads to a significant decrease in cash withdrawals. This confirms that digital payments contribute to reducing cash usage. However, no significant impact is observed in the long term, leading to the conclusion that the transition to a less cash-dependent economy remains incomplete. This situation is mainly the result of behavioral barriers, such as the social value of cash and low confidence in digital solutions. This study confirms the importance of promoting digital payments and financial inclusion by combining targeted incentives and infrastructure improvements to accelerate the transition to an inclusive digital economy.

Suggested Citation

  • Safwane Sadki, 2025. "The Impact of Financial Digitization on the Reduction of Cash Usage in Morocco," Advances in Economics, Business and Management Research, in: Ait Oufkir Abdellah & Younes Ben Zaied & Mohamed Charif El Harrane & Lalla Touhfa Belgnaoui (ed.), Proceedings of the International Conference on Multidisciplinary Research in Management and Economics (ICMRME 2025), pages 127-141, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-892-9_9
    DOI: 10.2991/978-94-6463-892-9_9
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