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The future of cash

Notes and coins: Past their sell by date?

Although the UK leads the world in financial services, when it comes to moving beyond cash, we are far less advanced than many other countries such as Sweden, where 4 out of 5 purchases are made electronically.

The writing is on the wall around the globe: cash will continue to decline in importance driven by customer preferences and technological advances.

Consumers and business predict the demise of cash

For consumers cash can be difficult to access easily and with 3% of ATMS still charging a fee for dispensing cash, it can be expensive. It offers less control over finances, cash is unhygienic (various surveys have found some less than pleasant bacteria on banknotes!). SAGE Pay’s 2014 The Payment Landscape cites 16% of UK consumers think bank notes will have died out by 2025. For businesses cash is a burden – it’s expensive to insure, count, store and manage. It’s also risky, attracting crime (often of the violent nature) and is open to fraud. Cash is prone to error, again according to SAGE Pay, 52% of UK businesses said that cash involves more accounting inaccuracies than any other payment method they use. Indeed cash is one of the most expensive means of payment available costing UK business a whopping 17.8bn per year.

Cash is slow

On top of all that cash is slow – at busy times in retail environments slow processes lose sales and cause consumer irritation with the resulting brand damage. Think about what’s involved in as single cash transaction. Getting money out from your purse/wallet or pocket, counting it, handing over, waiting whilst the cashier checks what you’ve given them, ringing up the amount in the till, counting out your change, checking your change is right and the putting it back in your purse/wallet or pocket. Now compare that to a contactless payment, getting your card out of your purse/wallet or pocket, tap on the terminal and get your receipt – over in approx. 1.5 seconds!

Technology is replacing cash

As the Huff Post Money reported in 2012 ‘ Hard cash is increasingly becoming currency non grata, airlines won’t take it for inflight snacks.

The technology already exists to transform the way we receive and spend money, enabling both consumers and businesses to reduce their dependence on cash whilst making life easier, more secure and less expensive for both customers and businesses.

Yet despite the availability of new technology businesses are nervous about dispensing with cash and haven’t embraced cashless operations as fast as you might think. Adoption may be hindered by concerns about investment, vendor selection and system implementation/management. Or there’s a sense that cash is cheaper to transact in comparison to debit/credit card payments But businesses often forget the significant add on costs already mention in this article.

On balance the future for cash is not as rosy as it was and now is the time to start considering the way forward to a more cashless society. If you want to know how technology can help you reduce your reliance on cash then please contact us on 01494 565066 or email us at solutions@monitorit.co.uk

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