The growing trend of electronic payments have seen predictions stating that within the next 15 years, as little as 10% of UK transactions will be in cash. This can seem like a good thing in the UK, with benefits such as violent crime rates reducing and lower transaction costs.
However – over eight million adults in the UK (17 per cent of the population) rely on cash to make payments every day. A completely digital society poses problems for both rural areas without secure connectivity and older generations. There are also concerns that a move to a cashless society could cause privacy issues and problems for people on low-incomes and with bad credit histories.
The UK cash infrastructure costs around £5 billion a year to run, and is paid for mostly by commercial banks who pass costs on to consumers.
Who wants a cashless society?
A cashless society would primarily benefit certain businesses. While some people prefer using debit and credit to cash for convenience, businesses benefit from processing fees when consumers use their apps and services to send and receive payments.
Handling cash is also expensive, so moving to cashless payments will also save businesses money and make transactions easier to track. Of course, paying for goods and serviced electronically is quicker than cash transactions, so a cashless society would almost certainly speed up business operations.
How would a cashless UK affect your business?
A substantial section of the UK’s businesses are made up of self-employed workers and tradespeople who handle cash daily. Tradespeople such as cleaners, window cleaners and gardeners are often paid cash-in-hand. Most UK householders even admit to keeping cash in their homes, saying that it provides them with peace of mind (43%), they need it to pay tradesmen (40%) or it’s more convenient when it comes to settling small debts with friends and family (16%). A small 3% confess to not trusting banks at all.
A cashless future?
There has been a steady decline in cash, but COVID-19 has accelerated this trend. Efficiency, safety and increased spending will all ensure that digital payments are the most popular method of payment.
Innovation in the banking sector is moving at a rapid pace, and new ways to make paying for goods will be even easier. QR codes, payment links and one-click payments are making non-cash digital payment systems effortless.
Although it is unlikely that cash will die out completely one day we may see the end of paper money in the banking system.
Let us know how a cashless society would affect your business operations.