Israel Sees Rapid Decline in Cash Use Amid Digital Payment Surge
Translated & summarized from Arab48 by baba
Cash usage in Israel has dropped significantly, with digital payments rising from 5% to 47% weekly usage between 2019 and 2025. Bank of Israel warns this trend could make cash harder to access and more expensive, despite 70% of Israelis wanting to keep it as an option. Cash remains dominant for small transactions and in specific communities, but its overall circulation growth has slowed. The central bank is committed to maintaining cash availability.
The story in 6 lines · by baba
- Digital wallet use in Israel rose to 47% weekly by 2025, while cash use fell to 48%, according to Bank of Israel data.
- Bank of Israel warns declining cash use may reduce infrastructure, making access difficult and expensive.
- Despite reduced usage, 70% of Israelis want to retain cash as a future payment option.
- Cash remains dominant for small transactions, accounting for 63% of deals under 10 shekels.
- Significant cash usage persists in Arab communities (75%) and low socio-economic areas (57%).
- 40% of Israelis find cash helps control spending, and 70% see it as a crucial backup for digital failures.
Cash usage in Israel is rapidly declining as digital payment methods, such as Apple Pay and Google Wallet, become more prevalent. Bank of Israel is warning that this trend could lead to a reduction in cash-related infrastructure, making access to cash more difficult and expensive. Despite the decline, approximately 70% of Israelis still wish to retain cash as a future payment option.
A review by the Currency Department at the Bank of Israel revealed a significant shift: the percentage of individuals using digital wallets at least once a week surged from 5% in 2019 to 47% in 2025. Conversely, weekly cash usage dropped from about 80% to nearly 48% during the same period. The data, gathered from an online survey of Hebrew speakers aged 16-74, indicates that the rise of digital wallets has primarily replaced credit card usage, with 50% of increased users reporting they switched from cards, while 26% cited cash as the alternative.
Despite lower daily usage, the total amount of cash in circulation remains substantial, reaching approximately 134.7 billion shekels in circulation and bank vaults. However, the growth rate of this total has slowed to about 2% annually in 2024-2025, down from around 7% between 2021-2023. Cash remains dominant for small transactions, accounting for 63% of deals under 10 shekels in 2023, compared to 25% for transactions over 500 shekels.
Significant disparities exist across different social groups. Around 75% of transactions in the Arab community and 57% in low socio-economic areas are conducted in cash, contrasting with 14% in high-ranking areas. In the Haredi community, cash use is 29%, versus 15% among non-Haredi Jews.
Many Israelis value cash for its tangible nature, which aids in budgeting, with 40% of survey participants stating it helps control spending due to immediate deduction. Small business owners also benefit from cash's liquidity and finality. Furthermore, 70% of respondents consider cash an important backup for digital payment system failures, and data shows an increase in cash hoarding at homes since the war began.
Bank of Israel's concern is that declining cash use could shrink the services and machines that support it, potentially increasing costs and limiting access. The bank emphasized that the impact extends beyond daily cash users to those who rely on it as an emergency backup, reaffirming its commitment to ensuring cash remains available and usable.
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