Consequently, this provides me with an understanding as to why, even though it may be a slow burner, the death of cash payments is undeniable in the societal future. In this instance, I guess plastic is fantastic.
Card payments surpassed cash last year for the first time in history, and The British Retail Consortium's (BRC's) latest figures showing cards were used to purchase £277.1bn worth of goods in 2017.
Payments by card now account for more than three quarters of all retail sales.
I can’t say I'm surprised, as with the recent advancements in contactless payment and cashless technology, I have found carrying cash is somewhat a burden, often finding when a store uses their best marker to inform customers of ‘cash only payments’ I become somewhat offended and troubled.
In recent months leaving my wallet at home has become an increasingly frequent occurrence. The growth in our cashless society means my mobile phone is all I need to take out in order to pay, keep in contact with people and even post a selfie to my social followers.
Selfies aside, safety is key and with increasing crime rates there is an inexorable risk with storing and carrying cash, not to mention the minimal protection if something is wrong.
Using credit cards ensures a layer of extra protection as consumers are covered by its ‘section 75’ policy holding the card company jointly liable with the retailer for larger transactions between £100 and £30,000.
Furthermore, debit cards provide ‘chargeback’ protection enabling consumers to request money back from the supplier’s payment processor if you haven’t received what you paid for, and the retailer won’t give your money back.
The obvious disadvantage of credit cards is the charge to use them and the interest on repayments, which can increase indebtedness.
Then there's buying goods online. Cashless payments facilitate e-commerce, allowing consumers to purchase goods globally without time constraints, providing a wider access and ease of shopping at convenience helping businesses and the economy.
Lastly, after recently returning from China, arguably one of the world's prominent forces in technological advancements, and seeing their further-developed cashless society work with ease, I’ve inherited a clearer insight as to what it entails.
Citizens use Wechat and QR systems to purchase goods and hail taxis, proving much more efficient than using cash. Even some street vendors in China only accept cashless payments.
London is making incremental changes proving the urge to at some point transition to being cashless. Examples include some buskers and charity vendors being equipped with card readers to introduce a ‘tap to tip’ movement as more and more people go cashless.
All in all, despite the government trying to highlight the importance of cash with its new note investment, it is inevitably decreasing and, despite cash still having its uses within society, technological advancements infiltrating the mainstream creating a ‘smarter’ system, means cash payments will have little, if any relevance in the future.
Arun Mohammed is an intern at Financial Adviser
