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The Cash King is dying

I still use cash for small purchases, as I like to keep track of my spending. More and more coffee shops and small retailers are taking electronic payment only. In the UK, cash use has been falling, leading to 2017 seeing debit card payments overtake cash payments. A recent report stated that at current rate of decline, it would mean cash use would cease in 2026. Are you ready for cashless spending?

Piggy bank

Hold that coin

Over the coming year many retail businesses will stop using cash, as it saves time and money.

Advantage of no cash:

  • Lower physical crime as no paper notes to steal.
  • Less money laundering, as there's an electronic trail.
  • Save business time and costs by not depositing cash.
  • Easier currency exchange while traveling abroad.
  • Business insurance premiums are lower as no cash on the premises.

Disadvantages of no cash:

  • More chances to exposes your banking information to cyber criminals.
  • Technology problems can leave you with no access to your money.
  • Those without bank accounts are seriously at a disadvantage.
  • Harder to control small impulse spending.
  • Banks charges rise to pay for cybercrime (compensating customers).

The real problem, maybe those living in rural areas with poor broadband or mobile connectivity. Poverty is the biggest indicator of cash dependency and not age. Cash structural change requires innovation such as:

  1. Local shops offering cash-back to customers, rather than ATMs.
  2. Small businesses depositing cash in secure lockers, avoiding a trip to the bank.
  3. If customer banking fees rise, the government needs to lower the cost for consumers.

Don’t panic

It costs the UK around £5bn a year to run a cash environment, paid for by the retail banks and operated by commercial operators. The Consumer group Which? has called for a single regulator to protect access to cash in the UK. Don't expect a cash draught, as notes and coins would still be used in 15 years' time, however experts reckon that cash will account for less than 15% of transactions. 

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Visit at www.insurewithmax.com or call the UK call centre 0333 323 0098 for more information.

Sources:

https://www.bbc.co.uk/news/business-47456698

https://www.thebalance.com/pros-and-cons-of-moving-to-a-cashless-society-4160702

 

 

Date: 01 April 2019 by Max Robinson