The use habits of cash and other means of payment are influenced more now than in the past by changes in technology and regulation.  The world of payments is changing rapidly, and new digital payment technologies are being developed. Some of the new payment services that have been expanded or added in recent years include payment applications for cellular devices, digital checks, and debit cards. The Bank of Israel encourages the use of advanced nonpaper-based means of payment, and as such was part of the legislative process for the Reducing the Use of Cash Law, 5778–2018[1], which came into force in January 2019. In view of these changes, the Currency Department is prepared for various future scenarios and their possible impact on the demand for cash and on cash usage habits.


The changing reality requires the Currency Department to prepare in an environment of uncertainty for various future scenarios with the aim of managing the cash system in the long term in the most efficient and effective way possible.  For this purpose, the Department is using a variety of tools that provide the information necessary to understand cash use habits, formulate a forecast of demand for cash, and identify early signs of changes in trend.


These tools include periodic surveys.  The surveys play an important role in understanding cash use habits, since cash, as opposed to any other means of payment, is not documented in the settlement system, so there are not data on its use habits.  Central banks around the world conduct surveys to examine cash use habits and trends.


In December 2018, the Bank of Israel Currency Department conducted a survey—the Expenditure Diary—to estimate the Israeli public's daily cash expenditures compared with expenditures using other means of payment, divided by type of expenditure.  Each respondent was asked to state the precise amount he spent in cash and other means of payment in the 24 hours preceding the survey.

The survey's findings show that cash is a significant means of conducting transactions in Israel.  Cash expenditures constituted about 26 percent of total daily expenditures, while credit cards or debit cards accounted for about 38 percent.  The median value of daily cash expenditures is NIS 46, and only 10 percent of respondents reported daily cash expenditures in excess of NIS 460. 


The three types of expenditure for which the public prefers cash payments are: tips (79 percent), travel by taxi (73 percent), and transferring money to a relative (69 percent).

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