While the world seems to be turning steadily towards digital banking and money apps, we can’t help but wonder if the UK is ready to become a cashless society. For many people living in the UK, a cashless society is already a reality. They use mobile payments, online shopping services, money apps, and even contactless cards. Whereas consumers would use cash for smaller, single purchases in the past, there seems a general trend towards using plastic and apps for all purchases, even those that only come to a few pounds nowadays.
According to an article recently released by Which, the upsurge in digital payment systems and the steady trend towards cashless payments could leave 25 million UK citizens struggling. According to the article, a review called Access to Cash was carried out just last year, which showed that while millions of people are making use of cashless systems, the larger portion of Britain is simply not ready to make the change. The commission that was set in place to carry out this review actually advised that the government put mechanisms in place to protect UK citizens’ access to cash.
UK Spending & Consumer Behaviour Statistics Show a Decline in Cash Use
The statistics show that spending cash is on a steady decline. This is seen in the following facts:
- 10 years ago, every 6 out of 10 transactions was done with cash. Nowadays, only 3 out of 10 transactions are done with cash.
- ATM cash withdrawals have reduced by 8% over the past 10 years.
- By 2026, it is expected that just 10% of sales will involve cash changing hands. And far fewer stores will actually accept cash by this stage.
Who Will be Left Behind by a Cashless Society?
With shopping trends are showing a change towards Brits going cashless (17% of the population), they also show that 47% would find the changeover rather problematic. When you consider that 2.2 million people in the UK rely on cash over cashless transactions, one begins to wonder who these people are and why cash is still king for them. Statistics released by Which.co.uk actually show that 15% of Brits who earn under £10 000 per year only make use of cash for any and all transactions. There are also those living in the UK that don’t even own a bank account – in fact 1.3 million consumers in the UK don’t have a bank account – and these people would also be left behind! Another group of people, 4.1 million people, have been faced with financial difficulties over the years which has made credit and digital payment systems less easy to sign up to. These people would also be left behind by a cashless system.
In summary, those who will suffer if a completely cashless society is introduced in the UK include:
- Those who earn less than £10 000 per year.
- Those who don’t have a bank account.
- Those who have a chequered financial history.
The Risk that a Cashless Society Poses to the Average UK Citizen
While there is no real risk to those who are ready to embrace digital and technological change in the country, there are people who are at risk if a true cashless society comes about. It is obvious that the UK should go cashless, but in the right time and by ensuring that mechanisms are set in place to ensure that the entire population can transform together and that no one is left behind or put at risk. Below are a few important factors:
- Rural communities – while the rest of the country enjoys broadband internet and access to digital services and ATMs, there are some black spots across Britain where rural communities don’t make use of the internet or have access to digital services. These communities would be at risk if the UK went 100% cashless without proper strategic planning.
- Disabled people and the aged – many older people or those with disabilities handle their finances personally in cash. Due to complications, they might not be able to handle digital payment systems and would then need to entrust someone else with their finances.
- Individuals living on a tight budget – for some, it is easier to avoid getting into more debt and sticking to a budget by handling everything in cash. For these individuals, cashless payments can cause a diversion from the budget and poorly impact on their finances.
For many UK consumers, the real fear lies in the potential for limited shopping options for those who don’t change over to digital payment methods. Surely when shops only start accepting digital payments, many consumers will be stuck unable to make purchases and stores will also suffer a loss as a result of fewer sales. That’s food for thought!
Benefits of the UK Becoming a Cashless Society
Of course, it’s not all doom and gloom. We all know just how beneficial digital payment methods can be for the entire community. In fact, one just has to look at how cashless systems have benefited other countries such as Sweden to realise that there is true value in a cashless society. Some of the benefits of UK becoming cashless include:
- Less risk for businesses and consumers. Handling cash and keeping cash on the premises or on a person is dangerous. Cashless systems completely eliminate risk associated with cash.
- The risk of money laundering and tax evasion will be minimised. Without actual cash-in-hand, there’s always a “paper trail” to follow.
- A cash system costs businesses and people a lot of time. In fact, billions of pounds are spent on counting notes and coins and handling deposits and withdrawals. Debit cards, credit cards, mobile apps, and tap and go systems eliminate the time required to tally up accounts and record transactions.
Ready Yourself to go Cashless
If you are a UK citizen, there’s no denying that the next 15 years will show a substantial and unstoppable shift towards cashless systems. Unfortunately, those who aren’t geared up and ready for a cashless society will have to take steps towards becoming more ready. Start looking into the latest apps, ask your bank to convert your debit card to a tap and go card and find out simple and cost-effective methods of moving with the times. You don’t want to be left behind – it could end up costing you a lot more than the few pounds it will cost you to simply keep up with digital and technological financial change. If you run a business, Card-Saver.co.uk provides some great tips on how to prepare for the change that awaits the UK payment systems.
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