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Are we ready for a cashless society?

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Money on chess board
Profile photo of Harry Cheesman Harry Cheesman Which? Money
Comments 42

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
42
malcolm r says:
29 June 2014

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.

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wavechange says:
29 June 2014

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.

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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.

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Hilary Porter says:
30 June 2014

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

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wavechange says:
30 June 2014

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.

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malcolm r says:
30 June 2014

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.

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malcolm r says:
30 June 2014

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.

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Roger Pittock says:
29 July 2018

Although I’ve not quantified it, my figures over the last few years have been remarkably similar

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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!

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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?

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John Ward says:
7 January 2015

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].

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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?

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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!

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Lottaswede says:
16 July 2014

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

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John Ward says:
7 January 2015

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.

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Unity Slade Howard says:
28 July 2018

Cashless may work for many including the younger/more savvy person but for those who are vulnerable it’s a nightmare. On occasion a cashless transaction has taken place as the card and travel card are in the same wallet/purse as the person does not understand the consequences of carrying both together.
I cancelled my “cashless card”, if I need to use it I will use my PIN so I know what and where I am spending. Small organisations/traders rely on cheques and cash as they do not have card facilities.Larger organisations may prefer us to be cashless as they can then employ less people – is this really what we want?

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John Ward says:
28 July 2018

Using the PIN with a debit card is still a cashless transaction and is not under threat [although you can’t pay that way on a bus or tram]. As you say, Unity, contactless payment is the one to be wary of because it’s too quick and open to error – but at least the value and number of the transactions are restricted.

When two cards are presented together the transaction usually fails and cancels out.

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