Is Britain becoming a cashless society?
Coins have been traced as far back as 600BC at the Temple of Artemis at Ephesus (modern Turkey). So after all this time, is society really ready to drop cash and exclusively use electronic payment methods to pay for goods and services?
A recent study by Clydesdale and Yorkshire Banks into the UK’s spending habits suggests that ‘cash is no longer king’. The report suggests that 29 per cent of the UK population now withdraw less than 10% of their income in cash and are becoming increasingly reliant upon Direct Debits, card payments and online transactions. Eight per cent stated they never withdrew cash from their bank account.
The amounts consumers are paying on their cards were also factored into the study. The research concluded that people are willing to use their cards to pay for items with a small price tag, with 18 per cent saying they would use their debit or credit card to pay for an item worth £1.01 – £2. However, the majority of people (37 per cent) stated that they would only use their card to pay for items if the transactional value was over £4. The research also showed that only 5 per cent of the population carry more than £50 and 30 per cent carry less than £10.
Another modern payment method coming to the fore is mobile payments. There has been a lot of hype surrounding various new smartphones and whether they will support Near Field Communication (NFC) payments. This technology, also found on many debit cards, allows the consumer to simply ‘touch’ the contactless terminal with their mobile phone to purchase an item. A report from Juniper Research suggests that over a quarter of mobile phone users will pay for goods and services through their device by 2017, with the industry set to be worth $180bn.
To conclude, cash will most likely cease to exist in the future, but it will not be anytime soon. Take the proposed abolishment of cheques for example. The Payments Council put plans in place to phase out the use of cheques by 2018, only to be met by fierce opposition and forced to withdraw their plans. There is no doubt that cash usage is statistically declining but removing a payment method that people trust and are familiar with, regardless of technological advancements, will be no mean feat.