Moving towards a cashless society
Cash is fast becoming a thing of the past. With ever-improving technology, more and more people are using their cards to make payments, and contactless is driving the surge. According to UK Finance, 7.4 billion payments were made by contactless in 2018 – a 31% increase on the previous year. If this seems unrealistic, ask yourself this, when was the last time you used cash to make a purchase? It’s of no surprise that the cashless trend looks set to continue, but what does this mean for how we pay and buy? We’re tackling the issue head on by addressing the question, what is the impact of a contactless society?
How long has cashless payment been around?
Although you might say cashless payment has existed for millenia through ancient bartering systems, the form we’re most familiar with came into existence in the 1950’s. The first multipurpose payment card was invented by American businessman Frank McNamara of the Diners Club, following his embarrassment at not being able to settle a restaurant bill. He wanted to create a payment method that cut out the need to carry cash and avoid uncomfortable mishaps. His idea seems to have caught on!
A change in behaviour
Swapping cash for card is rapidly changing our relationship with money. For a start, it’s enabled better financial management. With the rise of challenger banks such as Monzo and Revolut, who rely on contactless technology, consumers have easy access to accurate data showing their spending habits. In a matter of clicks you can see how much you’ve spent on amenities as well as your entertainment habits. How much money did you end up spending last night at the pub? You no longer have to rummage around in your wallet or pockets for stray banknotes to find out – just log into your app.
Despite allowing greater visibility of our finances, however, going contactless doesn’t seem to have made us more frugal. Quite the opposite, in fact. A study in the International Journal of Economic Sciences states that contactless payments have actually increased spending. According to the report, the ease of tapping your card to pay has facilitated a greater frequency of low value transactions. This is something we’ve witnessed firsthand at GoodBox – our contactless tap to give terminals at The Natural History Museum, for instance, have resulted in a 64% increase in donation income. Rather than dig around for a handful of coppers when we want to donate, we can now just pull out our cards with no trouble.
As the amount of cash we’re carrying around in our pockets gets smaller, so does our risk of falling prey to fraud. Although the total amount of fraud in the UK due to lost or stolen cards has increased by 2% to £95 million in 2019, the average figure per incident has significantly decreased – owing to the speed with which banks are detecting fraudulent activity.
This is helped by the £30 limit on contactless transactions, so no-gooders can’t get away with spending away your lifetime savings in one transaction. Also, thanks to traceable transactions, it’s now more likely that you can recover money lost to fraudulent activity.
We Brits are known for our love of queuing. You could even class it as a national pastime. However, our move towards a cashless society might be putting a stop to this. The growing popularity of contactless payment may spell the end of this very British tradition. The time taken to conduct a transaction has been significantly reduced as we can now remove the time needed to fumble around for cash and coins, and give back any change. Mark Fabes, IT Director of McDonalds, notes that contactless payments reduce transaction times by 5-6 seconds per transaction – a huge time-saving when applied across many customers and locations. This not only increases revenue for retailers, but also customer experience and satisfaction – a YouGov poll from 2012 states that as much as 59% of people are unwilling to wait in a queue.
Doing our bit for the planet
Believe it or not, ditching cash for cards may also be good for the environment. A study conducted by De Nederlandsche Bank, the central bank of the Netherlands, suggests that using cash is 130% more likely to contribute to climate change than using a debit card. The study takes into account the whole lifecycle of both cash and debit card payments, considering raw materials involved, transportation, and energy required for the production of different components. For those green-minded among us, this is music to our ears!
Today, we’re more likely to carry a debit card than cash in our wallets, and it’s not an understatement to say that this trend shows no sign of stopping. Driven by the surge in contactless technology like our cashless donation devices, the disappearance of cash has brought many changes. If anything is clear, though, it’s that the future is penniless.
It’s our mission to help charities, nonprofits and religious organisation join the move towards a cashless society. Our contactless tap-to-give units, such as the GBx Core and GBx Podium, allow your supported to donate without the hassle of foraging for spare change. Check out our case studies to see how organisations such as the Church of England and The Teenage Cancer Trust have used our contactless solutions to increase their donations and move into the modern age of donating.