Not yet a cashless society


Plenty of life left in it yet…

Through the evolution of payment options from paper and coins to electronic methods, many have been quick to speculate the rise of a cashless society. The Cooperative supermarket’s recent report on consumer behaviour and spending predicted that by 2025 mobile payments will take over cash and card payments. Stalwart, the Royal Mint responded, defending cash with a statement that declared the global demand for coins is as strong as ever.

In our ever-increasing technical world, it’s inevitable the popularity of digital payment methods will increase. But to say cash will become extinct is a very bold statement indeed.

As the Cooperative’s report alluded, there is a wealth of scepticism regarding the practicality and security of contactless credit cards and mobile transactions such as Apple Pay.

Through our own research, we found when asked which payment method was the most secure between cash, mobile pay, PayPal, contactless cards or debit/credit cards – over half of the 1000 respondents chose cash. Moreover, when choosing what form of payment they would use if they could only to choose one for the next ten years, 36% said they would choose cash over mobile pay, contactless cards, debit or credit cards because it is not dependent on technology.

Only 2% of our respondents claimed to use mobile pay on a daily basis. The majority expressed concern towards the security and reliability of mobile pay for larger retail transactions and consequently admitted they were reluctant to adopt the payment method in the foreseeable future. Given that stories of breaches and hacks make headlines almost daily, the focus on security is understandable.

Aside from some reluctance, it’s clear that digital payment methods are making waves within the transaction sector, with Coop reporting a rise of over a million contactless payment purchases in the last month. However, until such payment methods can refine security concerns, growth may be stunted.

According to Cooperatives’ report on consumer behaviour and shopping trends, cash is still the preferred payment method for over 65% of shoppers. Notes and coins remain, as the Cooperative highlighted, ‘the King of Convenience’ due to its reliability and how easily it can be accessed.

Cash still contributes to around half of all payments in the UK and its volume increases annually. There are notes now equivalent to £1000 for every UK citizen. Furthermore, in March 2016 the LINK ATM network reported cash withdrawals were at £128 billion for 2015 – emphasising the consistent demand for cash in the UK.

A surge in free-to-use cash machines making cash more accessible has similarly been pivotal, and something we’ve experienced first-hand. Free-to-use ATMs now make up 74% of the total machine cash estate and out of our 5000 cash machines across the UK, Netherlands, Belgium and Ireland, 3562 are free-to-use.

According to a survey by ShopperVisa last year, at least 70% of customers expect their local convenience store to have an ATM service, and we have recently calculated that, in a store operating 7 days a week, it increases total expenditure by £6,700 – good news for shop owners who want to increase footfall.

Including the benefits of cash for small businesses and retail stores, there is no denying that for consumers, cash is simple to use, convenient, instantaneous and easily accessed. It bypasses all the hassle of bounced cheques, rejected cards and transaction fees and as a tried-and-tested payment method it has a history that transcends millenniums.

Despite my argument for cash as a staple in our economy, I’m not naïve enough to think that there won’t be a decline in usage of cash over the next 10 years with the onset of alternative payment methods. However, modern life means we are now all hybrid spenders.

We have different payment options for different occasions and enjoy splashing the cash in shops and finding a bargain online. It’s all about consumer choice, and whilst new electronic payment methods may enter the market- the humble cash machine will still sustain, as the backbone of our economy.

Ewan Ogilvie, managing director of European ATM provider YourCash Europe