There’s no denying that COVID-19 played a big role in the shift towards using cards over cash when we were being encouraged to prevent the spread of the virus. If we weren’t exchanging notes and coins from person to person, there was less chance to pass anything on outside our Bubbles right?
Instead, we were encouraged to use our cards or mobile phones to “tap” for payments instead. During COVID, it made sense. However, the rise of cashless stems back much further than in 2020.
According to the House of Commons Library, “Since the mid-1990s, the number of bank branches in the UK has been falling…between 2012 and 2022, the total number of bank and building society branches in the UK fell by 40%.”
However, whilst the post-COVID era did see a rise, “in 2021 there were an increasing number of customers who did not use cash or just used it once a month – around 23.1 million, up sharply from 13.7 million in 2020. Around 1.1 million consumers mainly used cash in 2021.”
Over the past year, as we’ve moved more firmly into normality, I’ve noticed a few businesses seem to be taking very firm steps to either being cash-only or completely cashless. It doesn’t matter which way that business goes, I’ve seen that there always seems to be a big backlash. So, I wanted to do a little investigating of my own, and I conducted a little bit of research across my Made in Grimsby & Cleethorpes social media platforms. I wanted to find out if the world is ready to embrace a cash-free future…
On Instagram, I asked whether people prefer Cash or Cashless. Of all the people who responded, it was incredibly close which 52% choosing Cash and 48% Cashless.
Support for Cash:
Before I start this section, I just want to say that one respondent expressed concern regarding the potential impact of a cashless society on privacy, citing the ease with which transactions could be tracked and monitored. There is an argument here that store cards particularly by shops such as Boots and Tesco already allow this, and I do believe that this is an important factor to look at.
However, I don’t want to focus on this side of the conversation as I want to talk more about the human aspect of supporting the use of physical cash.
I’m sharing this not to cause controversy, but for full transparency relating to ALL the feedback I received on this topic.
Budgeting
This one, I feel, is best explained – initially at least – by the feedback I received:
“I really struggled to not overspend when using card. I use cash now for food shopping and it makes budgeting a lot easier for me as I can physically see the money and what’s left and I have to think about it more.”
Another respondent backed this up with the following comment: “People can take better accountability when paying cash as sometimes it’s too easy to just ping constantly without really adding up what you’ve spent.”
Boosting Profits
Something important to know is that whenever you pay by card, the business will have to pay a transaction fee. Some small businesses will add this charge to their pricing structure; however, it might surprise you to discover that many don’t, usually for guilt-related reasons.
“I prefer cash as it is more beneficial to the high street and to small businesses, I speak to many small businesses on a weekly basis and have several social media clients who all prefer cash as it is better for profits…
Whenever I get paid in cash, I am getting maximum profit that can then be used by myself to pay for products and services from other businesses when I am shopping in the high street…
…card fees eat into potential earnings of small businesses…expansion of a cashless society will only lead to business putting up prices to cover the ever-expanding fees…”
From the feedback, we can draw several conclusions about what is important:
Budgeting and spending control: Some individuals find it easier to manage their spending and stay within their budget when using cash. The tangible nature of cash allows for better visualization of money and encourages more thoughtful consideration of purchases, which can help prevent overspending.
Accountability and awareness: Cash payments require individuals to physically hand over money, which can enhance awareness of their spending habits and make them more conscious of the amount they are parting with. This can foster a greater sense of accountability and help individuals track their expenses more effectively.
Support for local businesses: Cash is perceived as more beneficial to the high street and small businesses. Some individuals prefer using cash because they believe it directly supports local businesses by avoiding card transaction fees that can eat into their profits. Cash payments can enable businesses to maximize their earnings and potentially reinvest in the local economy.
Concerns about card fees: The expansion of a cashless society raises concerns about the impact of card transaction fees on small businesses. Some individuals believe that these fees can erode potential earnings, leading to increased prices and potentially affecting the affordability of products and services.
Overall, the feedback reflects a preference for cash due to the ease it has – even if only mentally – on budgeting, spending control, accountability, and support for local businesses. The concerns regarding card fees and the potential consequences of a cashless society indicate a desire to maintain cash as a payment option for the benefit of both individual finances and small businesses.
Support for Cashless:
All of the feedback that was in support of a Cashless Society, centred around the fact that we just don’t carry cash with us anymore:
“I very rarely carry a bag now and pay for everything with Apple Pay as I’ll always have my phone, so it’s just far more convenient for me.”
“I very rarely have cash on me and then I hate that I have to go get cash out at a machine that usually charges me for having to pay for something by cash.”
“Personally I don’t carry cash anymore and rarely have the need to.”
“As a customer, I find card easier because it means I’m carrying less and its so much more convenient now with being able to pay on our phones.”
“I used to swear by cash but honestly I just find it convenient now. Having to find an ATM if running short and then being burdened with the change when breaking into notes, it’s so much easier to use card.
“Personally haven’t carried/used cash in years and our business is preferably cashless albeit we do accept cash in rare instances.”
From this feedback, we can draw the following conclusions:
Convenience: Many individuals find digital payment methods, such as Apple Pay and card payments, more convenient than carrying cash. It allows them to make purchases easily using their phones or cards, without the need to carry additional items like a bag or cash.
Limited cash usage: The frequency of carrying cash has significantly reduced for these individuals. They rarely have cash on hand and often dislike the inconvenience of having to find an ATM or dealing with loose change.
Preference for card and digital payments: Card payments are preferred by customers as they offer the benefits of carrying fewer items and the convenience of paying with mobile phones. It suggests a growing acceptance and adoption of digital payment methods.
Shift from cash reliance: Some individuals used to prefer cash in the past but have now transitioned to using cards due to the ease and convenience it offers. The burden of finding an ATM, dealing with change, and breaking larger notes has led them to find card payments more practical.
Increasing cashless trends: There is a trend towards a cashless society, both on an individual and business level. Personal experiences and business preferences indicate a shift towards cashless transactions, although cash is still accepted in rare instances.
Advice for Small Businesses:
While the financial industry and government seem adamant about forcing us into a Cashless Society, as far as the regular person is concerned, cash is here to stay. So, my advice…
Don’t go Cashless. The feedback suggests that we are not yet ready to go 100% cashless, predominantly because people don’t want to be. Even those who don’t carry cash often don’t seem to fully support losing it completely: “I prefer card, but I hate being forced to pay a certain way, regardless of which way it is…I may have a few quid in cash but nothing in the bank until payday, and I’m forced to transfer from an account I can’t afford to dip into.”
Instead, give people the option to choose whether they pay with cash or a card. It includes everyone and makes sure everyone is made to feel welcome in your business. The problem is that due to various reasons from personal preference to cash machine accessibility, more and more people don’t always have cash on them.
“As a business, I offer the choice, I would NEVER say card only as not everyone likes using card, especially the older generation. Taking cash payments also means I have better profits, as I’m not paying a fee for the payment to be processed.”
“I don’t think we’re in a place where we could completely eradicate cash payments.”
“Nothing worse than going somewhere that’s cash only when you’ve only got your card, also just as bad when it’s card only and you’ve got a handful of shrapnel in your pocket.”
“I use both still. I like using my card for big purchases or when I’ve not got enough cash on me. However, I still like to have cash on me and I do like the option to pay cash. I really want my children to use cash as they grow up…”
“I like both, I always have both. You never know who needs a bit of cash or donate to a tip jar.”
“I accept cash and card with my business, but finding a lot more are bringing cash now since it’s been more of a hot topic, plus I’m using cash more to help others.”
This was an area that sparked the most conversation, and from it I think we can draw several conclusions about why cash will continue to hold a solid presence in British culture:
Customer preferences: Offering both cash and card payment options is important for businesses, as not everyone is comfortable or prefers using cards, especially the older generation. Providing the choice allows businesses to cater to a wider range of customers and avoid potential loss of sales.
Profit considerations: Accepting cash payments can result in better profits for businesses, as they do not incur fees associated with card payment processing. This suggests that there may be financial incentives for businesses to continue accepting cash.
Coexistence of cash and card: While there is a growing trend towards digital and card payments, complete eradication of cash payments may not be feasible or practical at present. There are situations where individuals only have cash or only have cards, and businesses that limit payment options may inconvenience customers.
Personal preferences and habits: Individuals have varied preferences when it comes to payment methods. Some still like to carry and use cash, especially for smaller transactions or to have the option of making cash payments. Personal experiences and habits influence their choice of payment method.
Community support and generosity: Some individuals value having cash on hand for various reasons, such as offering tips or helping others in need. Cash provides flexibility and immediate assistance in situations where digital payment options may not be available or practical.
Overall, the feedback highlights the importance of providing payment options that accommodate different customer preferences and needs, while also considering the potential financial implications for businesses. The coexistence of cash and card payments is likely to continue for the foreseeable future, as both methods serve different purposes and cater to different situations.
