/ Money

Are we ready for a cashless society?

Money on chess board

The use of cash to pay for goods and services is falling rapidly in the UK as we dig out the plastic to make purchases. Are you ready to live in a world where cash is no longer king?

The use of cash for retail spending has dropped 14% in the past five years, according to the British Retail Consortium. And a separate report by Halifax found that only £17.99 of every £100 that’s spent by its customers is spent in cash, a £3.03 fall on 2013.

What’s driving this?

Well, you can now find a debit and credit card terminal in almost any shop, and further payment innovations, such as contactless cards and mobile banking apps are making cashless payment increasingly convenient. A cashless society feels closer than ever.

London buses stop cash payments

Supporters argue that cashless transactions increase efficiency. Small businesses, for example, spend an estimated £3,600 a year on cash handling. In fact, more and more services are going cashless – London buses will stop accepting your pennies this summer.

Nevertheless, the security implications of a cashless economy are vast – all transactions could be monitored, for example. But with so much cashless shopping taking place, that horse may have already bolted. And while some crime, such as bank robbery and money laundering, could be more difficult in a cashless society, opportunities for fraud could increase. With card fraud up 16% in 2013, that’s something to keep an eye on.

For me, the convenience and efficiency of cashless payments outweigh the disadvantages, provided adequate safeguards are in place. If we are to let go of our notes and coins, banks and retailers must invest in systems that protect our money – and privacy – so that we feel assured to spend with freedom and confidence.

Comments
Profile photo of malcolm r
Member

We certainly use cash much less than we used to for our purchases. But all you have to do is mislay your cash-substitute card, and you’re stuffed. What would children do? Will they all have to have bank accounts and cards? What about the elderly who are so often maligned as being unable to deal with an electronic society – but some will have difficulty? How will you hide money from the taxman !? But most important – what do you do about transactions between individuals who won’t have electronic terminals? This is all a bit like cheques – other means have taken a lot of their uses away, but a significant residue remains. So it will be with cash.

Profile photo of wavechange
Member

Malcolm’s point about mislaid cards is quite relevant for me. Before I set off on holiday I left my wallet containing a debit card, credit card and cash at a friends business premises. I have managed to cope because I have a second credit card and will be able to transfer funds to a friend’s account in exchange for cash.

I have used my debit card for a few contactless payments without problem, so unless I hear of security issues I will probably use it more. But not this week or next because it is locked in my friend’s safe. 🙁

Profile photo of woodgreener
Member

Both my debit and credit cards are contactless but I have never used that element of either and do not want to because I do not want my statements of accounts cluttered with small amounts. I want full control of what appears on my accounts/statements and seeing small amounts (like a supermarket shopping receipt) will not make my job of checking through my statements any easier.

However, if I had a separate bank account specifically for contactless payments then I would be quite happy to use the debit card contactless payment system. One account for the small contactless payments and another account for my current items (the big important stuff) i.e. the bills/direct debits/standing orders/transfers/cash withdrawals. The contactless method of payment will only be used then.

Member
Phil Brownlow says:
25 June 2014

No, a cashless society is a terrible idea. I prefer cash for most things and will go on using it. I never buy anything in a shop on a card and prefer to know exactly where I am up to with my money. Also if you lose you card its always good to have some case until its sorted.

It also gives too much power to the banks and government who can cut you off with the press of a button.

My bank recently sent me new card with the contactless chip on. I rang them an told them I didn’t want it so they sent me new one without it.

Member
Alan Mowat says:
27 June 2014

Surely the comment “With card fraud up 16% in 2013” requires more than a ‘passing comment, “that’s something to keep an eye on”. Why aren’t the banks and authorities doing more about this.

Similarly your final comment says it all. Why are you not focusing more on what needs to done about safeguards.

“For me, the convenience and efficiency of cashless payments outweigh the disadvantages, provided adequate safeguards are in place”

Until I see more positive action I shall vote NO

Profile photo of redkite
Member

We usually stay at b&b’s when on holiday, and none of them accept credit cards as they say it costs too much for the amount of business they do. The same with window cleaners, milkmen, and other one man businesses etc..
But all of these will accept cheques if they have known you for some time.
We use credit cards for most shopping if it is over £10, or if we are buying an expensive item,.
So NO to a contactless and banking app society.

Member
PC of London says:
27 June 2014

Take a look at the Mondex programme from the mid-1990s. It aimed to deliver a cashless society. Great thinking from 20 years ago.

Member
RogerF says:
27 June 2014

I made a small purchase recently and offered my card for payment. The trader refused to accept it on the grounds that the sale was under £5. Presumably the bank charges would take most (if not all) of his profit, so it was cash or no sale! Can’t see market traders wanting to bother with cards either for the same reason – bank charges and the reliability of mobile internet.

Member
Alan Mowat says:
27 June 2014

Get rid of cheques. Get rid of cash. All ideas from the greedy banks who just want to make more money to increase the pay of overpaid fat cats. Yes I agree it will come eventually, but please all you financial whizz kids you have to offer better value for money options and consider ALL your customers.

Member
DerekP says:
27 June 2014

How would I negotiate cash discounts or tip in restuarants without cash?

Member
Peter Clarke says:
27 June 2014

I support a steady move towards a cashless society. There should be legislation to progressively make it illegal to pay in cash, starting with transactions of, say, £50 and above and working steadily downwards, so that all but the most trivial amounts have to go through the bank. Apart from saving retailers a lot of time and cost in handling cash, it will reduce tax evasion which happens on a massive scale. Ever been offered a lower price for cash??

Member
Kess says:
29 June 2014

So how do you propose small market stall holders cope or other instances?
I think stating it should be made illegal is a bit draconian to be honest. We are all consumers and as far as I am aware do want choices or are you suggesting a 1984 type country?
Sometimes I am down to my last £2 in change as I don’t have enough in the bank to take out or don’t have a round number I can withdraw or pay with.
I must admit 90 per cent of my transactions are with debit card however being on a low income I rely on small change and cash to pay for things I can’t via debit card.
Why should it be made illegal? Computers and systems do mess up and in my experience almost every weekend my bank has maintenance going to so it can maintain online banking and payments. Meaning I cannot access my account to pay for things.
I have also not been able to pay a bill because of a problem with the bank or company and have gone to pay cash so it gets paid on time.
I also live near a market and often the transactions are lots of £1’s or 50ps for fruit and veg.
How to you propose to make it viable for these traders to only accept card payments?
As I live in London TFL are bringing in cashless bus fares. They oyster card will allow you to go *one stop more * however I do not live directly near an oyster top up shop. I cannot walk far at the moment as I have had surgery and those with mobility problems (and I am not talking about older people) will find going cashless very hard. It also puts pressure on those on lower incomes.
Sometimes I only have the cash fare, as otherwise I’d have to go to the bank, put in the £2 or whatever and then use a contact-less card which can only pay for me not my partner.
This also means I cannot use my concessionary oyster card.
Sometimes we have our bus fare in small change and do not have this in the bank.

Implementing a cashless society is all very well however until support and infrastructure is put in place it’s a dangerous thing and misses the point we should have a choice as to how we pay.

Member
steve says:
7 January 2015

You sound like a banker up to screw the poor bravo fool

Member
Andrea Penna says:
27 June 2014

cashless, definitely – I’m already using my debit card for nearly everything.
Keep a £20 note just for those rare cases where cash is required.
I hate those parking machines that are cash or call only – they should all have a “contact-less” reader.

Regarding elderly people, well, looking at the speed of this processes, we will probably be the elderly people before this will happen so… I don’t think that will be the issue 🙂

Member
Kess says:
29 June 2014

Not necessarily. I am 31 and have mobility problems and am on a low income. While I us debit cards for most things, cash is used for smaller items like market trader fruit and veg, small drinks and bus fares.
Debit cards are not always accepted for something that costs 50p or they have a min purchase or a charge. I don’t always have £1 in my bank but have the 50p for my drink in my hand.

When I am 60 unless small business and market traders have been able to implement a way to get around these difficulties I will stay pay cash and I will still want to pay cash.
As a consumer it is my choice and works best for my situation. As an older person of the future and someone who has grown up with technology I am level headed enough to understand choice is best and that technology is not always the best way forward as things can and do go wrong.
When I am 70 and rely on a small pension it may as it does now mean I cannot access debit card money all the time and may have small change to pay for things I wish to pay for.

Profile photo of dac@zen
Member

Personally, I hope to be able to use cash until I die. I also use cheques a fair amount, and do not, and never will use a cash-point. Banks would no doubt like to do away with cash just as they would like to do away with cheques, but so far they have failed to do so. For my modest needs, I see no advantage in doing away with either.

Member
sybilmari says:
27 June 2014

There are things one just can’t do meaningfully without cash: give a grandchild a couple of pounds for his money box; give a friend in need or a daughter some cash towards their petrol on the way home; buy small items without giving address details to a shop on their system (they get it from the electronic transaction). I’m sure there are plenty of others if I took time to list them. Then what happens if out finances are all controlled electronically. Given security issues we have already experienced, who’s to say someone isn’t just going to press a button and delete us? All electronic – NO THANKS.

Member
Bman says:
27 June 2014

I use a credit card for all but the smallest transactions and pay the monthly statement in full and by direct debit. This way I can see all my monthly spend on one statement and using a card is so convenient. I’m always amazed at the number of people who won’t use pay at pump facilities at petrol stations but instead go into the kiosk and pay by card yet are happy to use ATMs. Having said that I think cash will be needed for a long time yet for older people (I am 67) who don’t like/use cards.

Member
peterdominic says:
27 June 2014

NO NO NO TO !!!! CARDS CASH IS KING!!!! NO BANK CHARGES!!!

Member
ErikFBerger says:
27 June 2014

The “cashless economy” is just PR-spin by the bankers. Once cash is gone they can increase the card fees and extract 1 to 3 percent of the entire economy as the only gatekeepers. It is also an extremely vulnerable system. We need functioning backup systems for power outages, IT failures or bank strikes.

In addition, the cashless society is an Orwellian nightmare. The mass surveillance bureaucracy will be able to track your every payment and no one knows when and how that information will come back and bite you in the back. It will be impossible to do legal things anonymously, for example, travel to another town to cheat on your partner. That information might end up in a divorce court. We live in a democracy today, but that can change into something much more authoritarian where for example dissidents risk losing their jobs or have their children taken away from them. If that happens, it will be impossible to organise opposition. It will be impossible to financially support activism and opposition groups that the government has decided to ban.

Member
Robert C says:
27 June 2014

A cashless option is fine – a cashless travel card for the occasional user or even to use in shops too saves carrying heavy coins. However to make it mandatory – the only option – is silly. If I go to London for a day out, how am I supposed to know that they do not accept money ? What sort of card do I need and where do I get it? Sudden decision to go tomorrow, can I download one this evening?

I don’t normally check “do they take money” before going somewhere, should I check if they still accept cash in the Lake District.

If cashless cards are so good, they will catch on and we will all have them.

Profile photo of crepuscular
Member

Although I appreciate not having to lug around large pocketfuls of change, there is a lot to be said for retaining the informality of cash. I do use plastic for large purchases, but do a lot of my small and medium purchases via cash.

I am not sure that I am quite ready to allow state or corporate institutions to be able to analyse every purchase I make for the rest of my life – if that makes them feel less secure or less powerful, I could care less…

Member
Doug says:
29 June 2014

What an absurd idea! The Big Brother brigade and geeks are at it again. How long would it be before the banks greed got the upper hand and charges introduced for ALL transactions? How would we stop electronic surveillance by government and local authorities eager to intrude into our private lives? How would I tip? Would street performers and beggars have to carry card machines? If my cards are stolen I normally have some cash in my pocket for immediate use.

Ever been stuck in a queue waiting for someone to transact a card payment for a trivial amount (e.g. bus fare). From your remark about London buses, do they now carry card machines? Or will I need to make special preparations if I ever find myself in London?

How would I give my granddaughters a few bob (if anyone knows what a ‘bob’ is these days) spending money? What about penny arcade slot machines? Will children no longer be taught how to calculate money?

I use cards quite a bit, but not for small amounts, cash is far more convenient. Cash is ‘coin of the realm’ and legal tender; does anyone have the right to refuse it for payment?

With card payment forced on us for everything how long before the criminal fraternity jump on the fraud bandwagon?

I could go on……

A ridiculous idea!

Member
steve says:
7 January 2015

If you ever come to london you will spend half the day looking for a shop to top up your oyster card an you will probably have to catch a bus to find one an no chance of them letting you on enjoy the walk

Profile photo of malcolm r
Member

Doug, before we get too worked up, I think this is not an official proposal (e.g.from retailers or banks), simply a comment from Which? to get some feedback! I believe what they are saying is most of us use much less cash in transactions than we used to, and there are benefits to us, and to business. I don’t think they are really suggesting that a no-cash society is an aim, or on the horizon. I agree with almost all the respondents – it would be a ridiculous and wholly impractical proposition.

Profile photo of wavechange
Member

I agree with Malcolm. I have also been strongly opposed to the abolition of cheques because I cannot see any practical alternative for some transactions.

Member
Libby says:
29 June 2014

I use a card in all the shops that will take them. BUT surely most of us constantly need money for all sorts of small transactions. Here are some of mine:
Sharing a car for outings
a collection for a charity
a present for someone special, like a grandchild
market stalls in a small market town
using public toilets.
buying a ticket for a local event such as for a theatre group, concert or other amateur actities
and even for those small one offs, as buying a newspaper or a single bottle of milk.

Member
Hilary Porter says:
30 June 2014

So the use of cash has fallen by 14%. Big deal – still means it is used 86%.

Profile photo of wavechange
Member

No it doesn’t. Harry has said that the use of cash for retail spending has dropped 14% in the past five years. Even ignoring the newer ways of payment, debit and credit cards have been extensively used for decades.

Profile photo of malcolm r
Member

Hilary, There are two “statistics” in the intro. The BRC say cash use has dropped 14% in 5 years. Halifax say their customers now spend £17.99 in cash out of every £100 – £3.03 less than in 2013. So Halifax’s drop is also 14% – but, as I read it, in just 1 year apparently. Quite how they can compare now – when we are only half way through the year 2014 – with all of 2013 I don’t know. But either I have misinterpreted the intro, or someone else has misread the Halifax figures.
Assuming Halifax’s £17.99 is correct, we spend 82.01% in ways other than cash. What this does not indicate, however, is how many TRANSACTIONS are made in cash – and I’ll lay a bitcoin to a penny that it is an awful lot. This would be a much better indicator of the role, and convenience of cash.

Profile photo of malcolm r
Member

In an idle moment I calculated that over a year, around 7% of my spend is in cash, but that amounts to between 40 and 50% of the total number of transactions. A long time before I’ll be joining a cashless society.

Member
Hilton D says:
1 July 2014

The Banks also say less people are using cheques, but that’s because Shops decline to accept them – in turn, because the Banks have withdrawn the cheque guarantee clause on Debit Cards applicable to Merchants. I still use cheques to pay for certain bills (Council Tax, Credit card statements etc).

The requirement of paying Utility Bills by Direct Debit is created by those companies and Banks to steer people away from paper bills & using cash/cheques “in order to keep costs down” – Theirs!

If we are approaching a cashless society, perhaps we better advise the BOE to cancel printing the next £5 & £10 notes!

Member
Joel Kos' says:
1 July 2014

More arguments against the cashless society, especially for transport issues:
Overseas visitors to London will not know until they board a bus that they can’t pay cash, but if their credit card doesn’t have a contactless facility, they will have to alight and buy an ‘off-bus’ ticket, and there may not be a nearby location which offers this (or it may not be open), and you can’t buy a single journey ‘off-bus’ ticket in London, only a ‘Travelcard’ or an Oyster card If our foreign visitor does have a contactless facility on their card, it may be one of the myriad cards that TfL doesn’t accept. If the passenger gets past all of this, their fare may be liable to extra charges from their home bank as this is a foreign cash transaction which may typically add 2% to the overall cost of their ticketing. TfL insist that ‘only 1%’ of passengers now pay cash fares (magically down from 3% at the start of 2014) but as London’s bus passengers make six million trips on an average weekday, that’s 60,000 trips per day paying cash. A lot of people in real numbers.
Also, a lot of UK-resident people using London buses aren’t from London or even near it; they too will be caught by not being able to pay cash.
A good estimate is that system failures could leave 2000 people each day stranded, based on TfL published data on card faults – an average 2115 Oyster cards were lost, stolen or stopped working for no accountable reason EACH DAY of last year, a total of 770,000 passengers inconvenienced. Another lot of people in real numbers.
Going cashless says TfL saves £24m annually, a figure neither validated by them nor independently verified.
This is purely for operational convenience, not for passenger benefit – if going cashless generates a saving (not just buses but anywhere), how and when do we, the customers, see them?

Profile photo of John Ward
Member

You don’t have to live in Greater London to get an Oyster card. We’ve had them for years and live ninety miles or more away. It’s a jolly handy thing to have and it costs nothing to keep it in dormant mode until the next visit to London when it activates instantly as soon as you offer it to a card reader at a station or on the bus. Two other useful facilities that many are not aware of : [1] People with a national concessionary bus pass can use that on London buses too after 0930; and [2] People with a Senior Railcard can load that on an Oyster card and use it on National Rail journeys within the Oyster boundary – which is quite extensive – on those lines that have Oyster functionality [especially useful in parts of London where the Underground or Overground services do not run]. I do not know whether a similar ‘loadability’ applies to other railcards [probably Disabled Persons but unlikely for the new Two Together railcard].

Member
Murram says:
3 July 2014

Banks made it more difficult to use cheques by disbanding the cheque guarantee system. Currently coins are being made more difficult to use because the new versions of our coinage is rejected by the car parking meters and toilet entry machines. I have just come back from a holiday in the UK which has been blighted by having to spend much of my time asking people if they would exchange my new coins for old ones. When they changed the design, why did they also change the specification? Is this part of a conspiracy?

Member
John says:
4 July 2014

Are we ready for a cashless society? Not here in Rural Shropshire! Many of the local pubs and take-away food outlets simply don’t accept cards. Must come as a bit of a surprise to visitors when they go out for a meal!

Profile photo of Lottaswede
Member

We are totally a cash less society. Nowadays credit cards became the new status symbol as a the beginning of the smartphones era. There are luxury credit cards made of carbon fiber and even gold.
I’ve found a very interesting article here https://www.lottoland.co.uk/magazine/the-mythical-credit-cards-of-lottery-winners.html

Profile photo of John Ward
Member

Having one credit card might be a status symbol [especially if it’s the right one] but having more than three could be a sign of financial instability. The people to admire are those who don’t even have to produce a payment facility of any kind: everything is either paid for in advance or put on their account. A flunky eases their passage. Rarely seen on the buses, however.