Are we ready for cash-less high streets?
Posted on in Business News
Following the news that Denmark is moving one step closer to becoming the world's first cashless society, card payment providers suggest it won't be long until other countries such as the UK begin to follow suit.
Denmark is inching closer to becoming the world's first cashless country after the country's government proposed that retailers should be allowed to only accept mobile and plastic payments. If parliament gives the go-ahead, clothing retailers, restaurants and gas stations could go cash-free by January 2016.
Supporters of the program say less cash at the register will help boost in-store security and cut out resources required for counting and storing coins and bills.
Peter Hahn, a senior lecturer in corporate finance and banking at London's Cass Business School, said "It makes economic sense, and it's cheaper for everyone to move to all electronic model. Pushing coins and paper through the system very expensive. Money wears out, you carry it back and forth, redistribute it, count it. It's a big cost on the system."
Research from The UK Cards Association has found that card transactions have hit record levels and could soon be heading in a similar direction to Denmark.
The figures show that spending on cards reached £49.6bn in February, up 7.1% year-on-year, a noticeable difference from the £46.9bn recorded in February 2014. The vast majority of that spending was on debit cards, with growth of debit card spending continuing to outstrip that of credit cards: overall, consumers spent a total of £35.2bn on their debit cards in the month, up 7.7% compared with February 2014, and although credit card spending also grew, it posted a slower annual growth rate of 5.6% (totalling £14.4bn).
Richard Koch, head of policy at The UK Cards Association, commented: "Consumers are using their cards more than ever before, with over 435 transactions taking place every second, resulting in a great number of smaller transactions." Happily, people seem to be using their cards sensibly, too, with the figures also revealing that around four-fifths of credit and charge card spending is made by cardholders who repaid the balance in full each month.
Recent data from the British Retail Consortium suggests cash use is down by 14% over the past five years across the UK.
Cash may not be quite done with yet, but it is clearly losing its appeal, particularly among tech-savvy younger consumers. Worldpay research of 2,000 consumers found the majority of Brits over 45 years old still like to have cash on them, whilst nearly 60% cent of 25-to-34-year-olds would prefer to never carry cash.
Dave Hobday, managing firector, Worldpay UK, said: "Shoppers don't want to worry about having enough cash in their wallets. Whether they're spending a leisurely day out hitting every shop on the high street or popping into a cafe for a quick latte, they just want payments to be fast, simple and convenient. This is where card payments have the edge over cash, time and time again. It might not quite be curtains for cash just yet, but notes and coins are starting look like they belong to a different time."
Looking for a card payment provider?
Over 500 outlets are using ActSmart's exclusive package with Global Payments, generating over 1 million card transactions annually, worth over £200m.
Our market knowledge combined with significant negotiating power and
long-term relationship with Global Payments enables us to ensure we
continue to give our subscribers the best possible rates available.
"I am very happy to say that the ActSmart card processing scheme is still the most competitive having looked at several recent offers by other service providers" Nigel Hill, Sidcup Cycle Centre
If you are currently an ActSmart subscriber contact us or click here to find out more about switching to Global Payments or getting a rate review.
If you aren't currently a subscriber, click here
to see the full range of services you could benefit from by joining,
in addition to benefiting from preferential card processing rates.