Technology is transforming the way we make payments. Just ten years ago, 22 million transactions were made in cash each day, with card payments just a fraction of that. However according to a report out today by UK Finance, cash is no longer the most popular form of payment in the UK. Last year consumers and businesses made 13.2bn debit card transactions, compared with £13.1bn cash payments. There are a now a myriad of different payment methods emerging, with contactless cards, mobile payments and e-commerce increasingly displacing the traditional transactions of the high street. Adoption of these news forms of payments are being driven by consumer demand for speed and convenience. Time-poor consumers want everything instantly including now making payments.
Despite the undeniable shift to contactless payments there will still always be a place fo cash in society. People still use cash for a variety of reasons. Many, particularly those on low incomes, find notes and coins useful for budgeting. Others prefer to manage their money without having to rely on banks; perhaps because of a previous bad experience, or a fear hidden fees and charges, and the risk of getting into debt. Then there is the unbanked, research shows that nearly 1.5 million in the UK do not have access to a bank account and therefore rely solely on cash.
There are those that believe than an over-reliance on digital could be detrimental. Only a few weeks ago we saw a continent-wide system failure at VISA Europe which powers 95 percent of British debit cards. Consumers descended on ATMs around the country to access their cash, with this incident alone showing cash is still very much needed in society.
Noboby can deny the increasing adoption of alternative forms of payments but this doesn’t mean that we should necessarily start reading the obituary for cash just yet. Ultimately it comes down to consumer choice; some relish the speed and convenience that payment methods like contactless payments facilitate, yet others concerned by security will always favour cold hard cash.