Cash may still be king at the moment, but given the rapid take-up of contactless payments and related technologies, there could come a time when that's no longer the case. Not only has it been predicted that cards will overtake cash in the next few years, but new research suggests that technology could soon replace cash completely…
Research from London & Partners suggests that the UK could become a cashless society within 20 years, with 68% of survey respondents believing that cashless technologies will completely replace physical money by 2036. The figure is higher in London, where three-quarters of people predicted that cash would disappear within 20 years.
This coincides with a clear rise in contactless payment technologies and growing use of such payment methods, with figures from MasterCard, for example, showing that contactless spending has risen by 326% year-on-year.
However, London & Partners' survey may not be fully taking into account the feelings of the population, with older spenders in particular being reluctant to turn their backs on cold hard cash.
Research from fraud protection specialist Defender Note has found that nearly half (49%) of over-55s surveyed would be upset if cash was completely phased out as they prefer using it for payments, with security being the primary reason. Indeed, twice as many said they preferred cash to chip & pin, with just 25% opting for this payment method.
A further 29% thought that contactless cards were more risky than their non-contactless alternatives and 34% felt that banks should ask customers before issuing the technology, and as a result, 24% never use such cards.
There's definitely an age gap, however, with just 30% of those aged 18-34 saying they'd be upset if cash disappeared and only 10% having never used contactless – but even so, the fact that almost a third of this age group would still like to hold on to cash is telling.
"Contactless card use is skyrocketing and cash is on the decline thanks to brilliant innovation in the payments industry," commented Morgan Rothwell, director of Defender Note. "It's clear however, that this rapid development is unsettling for older spenders who still see cash as the safest form of payment.
"If cash is to be phased out entirely, then it's important that banks take the appropriate steps to ensure their customers feel secure making the switch to digital, and this means being proactive when it comes to fraud prevention."
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