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Category: Soap Box

Soap Box: Cash(less) is King

When was the last time you paid for goods or services in cash? When you opened your wallet and counted out real, paper cash in say, the supermarket? M...

12 June 2020

Gary Mead

When was the last time you paid for goods or services in cash? When you opened your wallet and counted out real, paper cash in say, the supermarket? Most of us these days use a card to chip & pin, or simply tap, or even hover… Contactless payments are in the limelight, thanks partly to ‘social distancing’, which, because we’re not sure about touching anything we haven’t disinfected first, has accelerated a trend already in place.

In the UK, 2019 was a watershed more than half of some 40 billion payments in the UK were made by card and contactless payments. The UK became more of a cash-free society.

Many people still depend on cash however – more than 9 billion payments in the UK in 2019 were made in cash. More than two million people in the UK still primarily use cash according to UK Finance, but the boom in spending money remotely has been stimulated by the impact of Covid-19.

The number of people who don’t use cash or use it just once a month in the UK has more than doubled from 3.4 m people in 2017 to 7.4m in 2019, according to UK Finance. We are also visiting ATM machines less, says Link, who runs the UK’s cash machine network – the transaction volume of ATM machines has fallen by more than 60% since the start of the UK’s lockdown.

A decade ago, e-commerce accounted for some 5% of total retail spending; today it is an estimated 16%. A neat graphic from Visa illustrates the rise of contactless payments since 2005. Australia comes top of the tree; surprisingly the USA is bottom of the 15 countries it considers. One study of the global contactless payment market suggests that it had a value of more than $13 billion in 2019.

The Treasury - Soapbox - ONS graph


The Treasury - Soapbox - eMarketer graph

The contactless phenomenon is going hand-in-hand with the growth of the digital world. This revolution, now in its third decade, has utterly transformed the method we use for payments.

Back in 1947 Berlin, packs of Lucky Strikes did very nicely, thank you, in an economy where barter replaced worthless cash.

The future is one where the forms of plastic payment will have fragmented into a thousand digital shards leaving us with “a giant electronic Somalia”, as David Birch, global ambassador of Consult Hyperion puts it. The fragmentation and disruption that the digital world has wrought on all markets it touches – media, transportation, communications, banking – is transforming our understanding of what money is, and shaking up the ways in which we buy and sell. The financial crash of 2008 merely hurried this process along, across the world.

In South Korea, the central bank aims to eliminate physical coins. In Iceland, no-one today uses cash, except the tourists; 96% of point-of-sale retail transactions there are made by card. In Kenya, more than 70% of adult Kenyans now use the mobile-based payments’ system known as M-Pesa to shift money around and pay for goods and services. Launched in 2007, M-Pesa now has 30 million users in 10 countries, including Albania, processing some six billion transactions in 2016. In 2012, six of Sweden’s biggest banks joined forces to establish Swish, an app that allows payments with a mobile phone number or QR (quick response) code. Some 60% of Sweden’s 10 million population now regularly use Swish – and only about 19% of payments are in cash compared to almost 80% (on average) in the rest of Europe. According to Cecilia Skingsley, one of the deputy governors of Sweden’s central bank, the Riksbank, “if you extrapolate current trends the last note will have been handed back to the Riksbank by 2030”.

So, it would seem that we’re spoiled for choice. Hundreds of different pieces of plastic, with a myriad different terms and conditions, vie for attention, but offer a very similar solution. Some are contactless, some allow for different currencies, some connect with your app, but how many allow you to make your payments in gold? Not just tokens or shares, but actual, physical gold, made liquid through your card?

As the world marches towards deflation the choice of which card to use narrows quite quickly. The Glint prepaid debit Mastercard® allows you to save and spend in gold, which has maintained over centuries.

So next time you’re at the checkout, don’t just pay for it, Glint it! with real gold and be part of the payments revolution.

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