Does Cash Have a Future?
David Hensley, Director, Cash Services UK, discusses the future of cash in the UK and why it’s important to step back from binary thinking.
Does cash have a future?
Technology has had an enormous impact on society. Smartphones, iPads, online shopping, music streaming and on-demand services are for many of us standard companions to our day-to-day lives. Even the most celebrated futurologists would have struggled to predict how entwined we have become with our tech in such a short space of time.
The payments arena is no different. Where once consumers and businesses were limited to cash or cheques, there is now a plethora of options available, more than at any other time in human history. This has inevitably reduced the number of cash transactions as people try new and convenient methods of payment (the adoption of contactless as a replacement of low value cash transactions is a fine example).
Cash is changing
The use of cash (that is, banknotes and coins) is changing. Ten years ago, six out of every ten transactions were cash and in 15 years’ time it could be as low as one in ten. The industry’s best estimates show that cash still accounts for between 30-40% of all consumer transactions (in terms of volume). If look at high street spending alone (bricks and mortar shopping) it’s slightly higher.
You might be reading this and strongly disagree because you haven’t used cash for weeks. But that doesn’t mean it’s the same for everyone. You might also think that the cashless society is imminent because you’ve read it in the news or seen it advertised – it’s a hot topic.
We have a strong dramatic instinct towards binary thinking, a basic urge to divide things into two groups with nothing but an empty gap in the middle. People automatically categorise and generalise all the time – it’s necessary for us to function as it gives structure to our thoughts. But it can also distort our views.
The independent review into Access to Cash found that if, as a society, we go cashless too quickly we could leave millions behind, threaten the viability of rural communities, create social isolation, increase personal debt and produce a stigma towards those who rely on cash (around two million people).
The world works much better when we focus on broader typologies. The perfect consumer does not exist – it’s time to stop dividing them into two groups – cash users and non-cash users. Instead, we need to focus on creating a payments landscape that meets the needs of everyone, no matter what their payment preference.