For the first time in 2016 payments made by card exceeded cash payments in the UK with a 15% decrease in cash usage and an estimated 3.4million people ‘hardly using cash at all’. The rise in card payments may have been boosted by the widespread adoption of contactless payments with 5.6 billion payments made in the UK in 2016, doubling the number of contactless payments made the year previously. This trend doesn’t seem to be slowing down anytime soon with predictions that cash use will halve in the next decade, but does this mean we are on our way towards a cashless society? And what is the impact on those who still rely heavily on cash?
The Access to Cash study suggests that we run a real risk of ‘sleepwalking’ into a cashless society without properly considering the impact on the society as a whole and could result in seriously disadvantaging around 8 million people dependent on bank notes and coins. Mike Lee, CEO of ATMIA highlights the importance of cash in our economy and explains;
“As the study shows, cash is embedded in cultures and monetary systems around the world. People trust cash as a store of value and it remains a means of payment that can be used by absolutely anyone at any time.”
Furthering this thought, Guillaume Lepecq, the study’s author stated that “A transition away from cash would only serve to isolate the unbanked and the underserved from the rest of the population.”, deepening social divides that already exist. “Efforts to eliminate financial exclusion must take into consideration the ways in which those who make up the unbanked are already marginalised,” warns Lepecq.
This suggests that as society becomes increasingly digital, it is important that areas of the population are not excluded and can continue to participate in the economy. Better educational programmes to teach digital skills and financial organisations reaching the unbanked could help to close this gap and prepare society for an increasingly digital age.
However, whilst there is a rise in card payments, cash still remains a frequently used payment method. Stephen Jones, chief executive of UK Finance, shares his thoughts:
“We’re far from becoming a cash-free society and despite the UK transforming to an economy where cash is less important than it once was, it will remain a payment method that continues to be valued and preferred by many.”
“These trends are likely to shift further over the next decade. Developments such as Open Banking are expected to bring extensive changes to the payments landscape, something that will likely shape how we interact with our money in the coming years.”
At Donate The Change we are always looking to challenge the status quo and we want to work collaboratively with organisations that protect the interests of individuals and most importantly make society a better place. It is our mission to protect charities revenue streams in a changing payment landscape and ensure that charities of all sizes can have access to digital fundraising methods that are cost-effective and sustainable. We do this by innovating on behalf of the organisations we support so that they do not have to invest heavily in research and development but can instead focus on their charities mission and activities.