Cash or card – what is your currency of convenience?

The payment experience is changing for all of us, irrespective of our demographic or geography. We can now pay by card, cash, phone, e-wallets, apps, barcodes, smart watches and soon even with our sunglasses. Consumers have traditionally worried about the safety of electronic transactions, but today global standards, platform-based technology, sophisticated security and increased consumer confidence are breaking down these barriers.

In the UK we are very card-centric – so much so that this year debit card payments overtook the use of cash for the first time. This phenomenal growth is primarily driven by contactless payments, which are encouraging the use of cards and pushing down the use of cash.

Contactless payments have grown by nearly 20 times in the three years to June 2017 (UK Finance 2018). This is not surprising as contactless has made small payments far easier for both consumers and businesses, cutting queues at tills and making everything from taking the bus to buying a coffee more convenient.

In contrast, cash use is falling and is expected to continue to decline over the coming decade. Experts predict that cash will only account for 16 per cent of all transactions made by 2027 (UK Finance). It is already common to find outlets that no longer take cash and for consumers to no longer carry it as they rely on alternative payment methods. Cash is now seen by some as cumbersome, heavy and clunky to carry around and no longer an efficient payment method.

We regularly hear predictions about when the UK will become cashless, but cash should not be underestimated as it continues to play an important part in the lives of many. People understand cash and can easily manage it, as it has boundaries. Small amounts of cash are still carried by a large percentage of the population, but it is rarely used as the main form of payment these days. Cash is now used as more of a safety option when other payment methods are not accepted.

There is no doubt that the UK is transforming into an economy where the use of cash is reducing, but I believe cash still has and will have a place in society as it moves from a currency of convenience to one of insurance. It is also worth bearing in mind that, while cards and contactless are the current payment methods favoured by consumers, payment trends change very quickly. With new technologies like biometrics, artificial intelligence and blockchain already established the whole payment ecosystem will change again. So long as these new technologies embrace the changing needs of the customer and offer additional flexibility without compromising security, the industry will continue to see innovation.

by Colin Close, Managing Director, UK and international corporate, Elavon


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