Beyond the cost debate: A multidimensional approach to quantify the value of cash for society

The decline of cash used for transaction purposes as well as the increase in total currency in circulation is usually discussed with respect to cost, efficiency and technological progress, i.e. digitalization. A large literature estimates the costs of cash production, distribution and handling. By contrast, the societal value of cash remains far less investigated and rarely quantified. This asymmetry matters because policy debates that monetize costs but leave benefits unconsidered may undervalue a payment instrument. The paper establishes a composite indicator capturing cash's value to society across five key dimensions: resilience, privacy, inclusion, cost control, and competition-supplemented by consumer surplus from seigniorage. We apply the methodology to Germany but the framework is designed to be replicable across countries and to support more balanced government and central-bank policy analysis. It combines a representative consumer survey, expert interviews, macro data and interdisciplinary workshops. In the base calibration, the aggregate value equals around 1.2 % of GDP. These results suggest that policy evaluations should incorporate cash's multifaceted benefits alongside costs. Recognizing cash's broader societal role can guide central banks and policymakers in fostering balanced payment ecosystems that preserve both innovation and public redundancy.