In the UK and across the world, figures show that the use of cash is in steep decline, as consumers make the move to digital payments with apparent ease;

  • In 2006, 62% of all payments in the UK were completed with cash. By 2016, that figure was 40%. Source: UK Finance
  • By 2026, UK Finance predicts that cash will only make 21% of all UK payments.
  • In 2016, UK citizens withdrew £6 billion less from ATMs than they did in 2015. Source: UK Finance

Even for payments on lower-priced items where consumers have traditionally used cash, numbers are shrinking:

  • Pret a Manger reported more than half of their customers pay by card for their sandwiches.
  • Nando’s reported card payments account for 71% of payments at their restaurants. Source: The Guardian

The availability of digital payment options has resulted in the popularity of cash to decline dramatically. Digital payments are seen as a quick, easy and secure alternative to cash.

Contactless debit cards heralded a revolution, no more signatures or PINs needed for smaller purchases. You do not need to be tech-savvy to be able to use contactless: it’s fintech everyone can use.

The Impact of a Cashless Society

There are some who see dangers in the decline of cash. The older generation or the lower income, less tech savvy groups in society is where the biggest impact is predicted. These groups may feel they are being left behind when retailers begin to stop trading in cash completely. In fact, there have already been several shops that have done precisely that with the expected result – the alienation of the aforementioned groups.

For businesses there are understandable cost and efficiency advantages. Paperwork is minimised and both accounts teams and employees will always know their balances and spending patterns with automated reporting. Expenses are logged immediately and can be approved remotely if necessary. There is also security and compliance control with expense technology reducing risks for businesses.

Everything about digital payments in a cashless society is trackable, whilst cash has a certain anonymity. Some worry about the privacy implications of digital payments and the over-reliance on third-party payment processors. There have been multiple stories of certain banks temporarily losing their online money transfer services or even their entire online banking access.

Despite all this, society is not quite yet ready to completely ditch hard cash. Yes, technology has been rapidly advancing and creating more digital payment options but cash is still used to complete more than 80 percent of global transactions. Although the banks, credit card companies and inventors of mobile applications are working tirelessly to find ways to create mediums that consumers can trust and feel safe using, the risks still exist. In addition, many people still depend on cash – people who survive largely on cash tips (i.e. valets, doormen), smaller stores that cannot afford credit card company fees and individuals who cannot afford the latest smart phones or who have credit issues.

The cashless world feels like an inevitability, but we are not quite there yet. However, savvy businesses should start preparing now for what is surely a given. The convenience of paying by mobile applications, credit cards etc…could eventually eliminate the need to carry cash. Become an early adopter of these new payment methods so that the marketplace does not leave your business behind.