Cash is dead. Long live cash.
Cash has been king for centuries but its position is being threatened by the rise of digital transactions. How does that make the UK feel?
The importance of cash in the UK has been in decline, ever since the introduction of the first credit card in 19661. This decline has accelerated in the last 10 to 15 years, as advancements in digital technology mean more new ways to pay without cash. Yet, coins and notes still seem like an intrinsic part of our lives.
So, we conducted a quick survey2 to get under the skin of our relationship with cash and to find out how we feel about the dawn of a cashless society.
Around the house
Cash…where do you keep yours? While it’s not as lip-teasingly tasty as a creme egg, cash does have one thing in common with Cadbury’s goo-filled delight: it gets everywhere!
- Just over one in ten people still stash cash under the bed/mattress.
- The average person carries on them £28 in cash.
- Men typically carry more (£37 on average).
- 16% of women have more than five pounds in change at the bottom of their handbag.
- On average, people have £4.10 scattered around the house, with a further £2.45 in change in the glove compartment.
- And then there’s the £20, on average, people have completely forgotten about (in old bags, coats etc).
- 41% of people put loose change in a jar for a rainy day.
- 77% proactively stash cash at home: the average sum is £110, although around two in ten of us have more than £200 tucked away.
- Men are more likely to stash cash at home, with 15% having more than £200 rolled up and ready.
- This number goes up when it comes to 45-54 year-olds (23.4% have more than £200 stashed at home).
By 2015 less than half of all consumer payments in the UK were made using cash, with electronic transactions preferred to an exchange of the Queen’s head3. But how do we feel about these heirs to the monetary throne?
- 36% think that paying for things digitally is a lot easier: in this regards, men are typically more enthusiastic than women.
- A third of respondents admitted they would be less likely to give to the homeless if there was no cash.
- Only 26% of people think that paying digitally is safer.
- 20% believe that going cashless would have a big effect on day-to-day living as they are currently paid in cash.
- Interestingly, 82% of us think that digital transactions make it easier to track what we spend.
- PayPal and contactless cards are the most popular digital payment methods (80% and 53% respectively).
A child’s-eye view
Slipping a last-minute tenner into birthday cards for nieces, nephews and grandchildren could soon be a thing of the past. We asked 518 children aged 13 to 17 when they think we will be a completely cashless society. Their answer? By 2031.
In a previous survey we quizzed younger children on their perceptions of money. The answers are often charming and misplaced…such as their teachers earning £200,000 a year! Click here to watch the video.
The industry lowdown
Nationwide Building Society’s Director of Payments, Paul Horlock said: “At Nationwide we have seen almost exponential growth in the use of contactless and an unparalleled reduction in ATM usage over the past two years which is a strong indicator of the move towards a cashless society.
“The introduction of digital based payment mechanisms like Apple pay and Android pay are further cementing the move away from cash as the payment method of choice. We have also seen an increasing migration to shopping online for goods previously bought on the high street which also helps drive cash usage down.
“Moving to a cashless society requires core behaviour shifts which in some generations would just not be likely unless it was mandated by the government. It is unlikely we will see a true cashless society within the next 20 to 30 years but with some government intervention we could see a real move towards this by 2050.”
Jamie Smith-Thompson, managing director at Portafina, added:
“Digital payment methods have undoubtedly become mainstream in the last decade and we are clearly approaching a tipping point where a cashless society becomes a reality for most people in the not too distant future. However, it must work for everyone.
“The internet, direct payments and online buying are enjoyed by the majority of people, but access is still restricted either through age, internet skills, lifestyle or income. If the government and financial institutions are going to back such a move to a truly cashless society, it will need a well-designed infrastructure which is totally inclusive and accessible to allow people to manage their money.
“From a psychological point of view, people still like physical notes and coins because it is tangible wealth and financial security in the palm of their hand. It will take a few years for people to feel comfortable with just a number on a screen – even if ‘going cashless’ in the long run makes tracking spending and completing financial transactions simpler, easier and safer.”
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A survey of 1,554 children aged 7-12, in February 2017.
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